Illinois Property Taxes By County 2025

Many of the tax changes in the federal reconciliation act flow through to state tax codes—automatically in some states, and subject to an update in states’ Internal Revenue Code conformity date in others. The State Tax Competitiveness Index enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare. While there are many ways to show how much state governments collect in taxes, the Index evaluates how well states structure their tax systems and provides a road map for improvement. In 2020, Illinois voters rejected a proposed constitutional amendment that would have allowed for a graduated income tax what is the tax rate in illinois system.

• These reduce a taxpayer’s total tax bill by some amount, which is in contrast to tax deductions, which only reduce a taxpayer’s taxable income.
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• With the compounding of different special business district taxes, purchases in certain areas like Cook County may be subject to a sales tax of up to 11.50%.
• Income tax deductions are expenses that can be deducted from your gross pre-tax income.
• Nonresidents who work in Illinois also must pay income tax to the state, unless they live in Wisconsin, Iowa, Kentucky or Michigan.
• The percentage that’s withheld will depend on things such as your income, your filing status (single, married filing jointly, etc.) and any tax credits you indicate on your W-4 form.

FY 2025-12, Sales Tax Rate Change Summary, Effective January 1, 2025

In Illinois, wine vendors are responsible for paying a state excise tax of $1.39 per gallon, plus Federal excise taxes, for all wine sold. Cannabis Cultivation Privilege Tax is due on the first sale of adult use cannabis by a cultivator or craft grower. unearned revenue The cultivator or craft grower that made the first sale of the adult use cannabis that you bought is responsible to remit the Cannabis Cultivation Privilege Tax. The sale of this cannabis by you to the dispensary should be taken as a deduction on your Form CC-1 to avoid calculating the Cannabis Cultivation Privilege Tax again. You may, however, be charged a fee from the cultivator as reimbursement for the tax that they are required to remit.

Payment Arrangements

Low-income workers with dependents benefit the most, as the credit increases with earnings up to a certain threshold before phasing out. Tax liability is based on federal adjusted gross income (AGI), which is adjusted for Illinois-specific additions and subtractions. Common additions include federally tax-exempt interest from municipal bonds issued outside Illinois. Subtractions often include retirement income, which Illinois does not tax. The final taxable income is then multiplied by 4.95% to determine the tax owed.

• California levies the highest tax on gasoline at 70.9 cents per gallon (cpg), followed by Illinois at 66.4 cpg and Washington at 59.0 cpg.
• Full-year residents must report all income, regardless of where it was earned.
• To lookup the sales tax due on any purchase, use our Illinois sales tax calculator.
• An extension of time to file your Form IL-1120 does not extend the amount of time you have to pay your Illinois tax liability.
• Property taxes are collected on a county level, and each county in Illinois has its own method of assessing and collecting taxes.
• Other items including gasoline, alcohol, and cigarettes are subject to various Illinois excise taxes in addition to the sales tax.

Exemption Allowance

The Earned Income Tax Credit (EITC) is set at 18% of the federal EITC, benefiting low to moderate-income individuals and families. The property tax credit allows taxpayers to claim 5% of Illinois property tax paid on their principal residence. Additionally, contributions to Illinois’ 529 college savings plans, like Bright Start, are deductible, encouraging educational QuickBooks ProAdvisor savings.

Income Sources

From there, certain items may be added back in, and others may be subtracted. Among the most important items that are taxable federally but not in Illinois are retirement and Social Security income, as well as distributions from a 529 college savings plan. Qualifications include being 65 and older and having a household income of no more than $65,000.Contact your county assessor for information about exemptions and your county treasurer for information about deferrals.

• You can also ask about other exemptions that may exist for veterans, seniors, low-income families, or property used for certain purposes such as farmland or open space.
• Adjustments include additions like interest from other states’ municipal bonds and subtractions such as federally taxed Social Security benefits and retirement income.
• The 4-percent portion of the use tax on this type of transaction is included in the county government’s sales tax distribution each month.
• This is a notable reduction compared to the general merchandise rate of 6.25%.
• The three categories are qualifying food and drugs, vehicles and general merchandise.
• Third-party tax preparation software, such as TurboTax and H&R Block, also supports Illinois e-filing.