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Tax Year 2026Updated July 20, 2026

Illinois Tax Calculator & Rates 2026

Illinois uses a flat income tax rate of 4.95% on all taxable income. For 2026, the personal exemption is $2,925 per filer (up from $2,850 in 2025). The state sales tax rate is 6.25%. A major change for 2026: the state grocery tax has been eliminated. Use the calculators below to estimate your Illinois tax liability.

Income Tax
Flat 4.95%
Sales Tax
State rate 6.25%
Capital Gains
Flat 4.95%
Supplemental Rate
4.95%

Illinois Income Tax 2026

Illinois levies a flat 4.95% income tax on all taxable income. There are no graduated brackets; all filers pay the same rate regardless of income level. Illinois provides a personal exemption of $2,925 per filer ($5,850 for joint filers), which reduces taxable income before the flat rate is applied.

Illinois Grocery Tax Change for 2026

Effective January 1, 2026, Illinois eliminated its 1% state grocery tax. Qualifying grocery food and beverages are now exempt from the state sales tax. This is a significant change from prior years when groceries were taxed at a reduced 1% state rate.

However, home-rule municipalities may still impose up to 1% local tax on groceries. Whether you pay any grocery tax depends on your city or county. Check your local jurisdiction for the current local grocery tax rate.

Illinois Sales Tax

Illinois's state sales tax rate is 6.25%. Local jurisdictions add their own rates, with the Chicago area having some of the highest combined rates in the nation (exceeding 10% in some areas). Most grocery food is now exempt from the state portion as of 2026.

OBBBA Conformity - Does Illinois Follow Federal Deductions?

Illinois has decoupled from the federal OBBBA deductions for tips and overtime. The federal deductions are added back on Illinois Schedule M, meaning Illinois will still tax tips and overtime at the full 4.95% flat rate.

  • Tips Deduction: Does not conform. Illinois does not conform to the federal OBBBA tips deduction. The federal deduction is added back on Illinois Schedule M. Illinois will still tax tip income at the full 4.95% flat rate.
  • Overtime Deduction: Does not conform. Illinois does not conform to the federal OBBBA overtime deduction. The federal deduction is added back on Illinois Schedule M. Illinois will still tax overtime pay at the full 4.95% flat rate.
  • Senior Bonus Deduction: Pending guidance. Illinois has not issued specific guidance on the federal OBBBA senior bonus deduction. Pending IDOR clarification. Illinois already fully exempts retirement income, which may reduce the practical impact.

The federal deductions still reduce your federal taxable income. Use our paycheck calculator to see the combined effect on both your federal and Illinois returns.

Illinois Retirement Tax

Illinois fully exempts retirement income from state income tax. Social Security benefits, pensions, 401(k) distributions, and IRA withdrawals are all exempt. This makes Illinois one of the most retirement-friendly states in the nation.

Illinois Tax Calculators

Illinois Paycheck CalculatorIllinois Tips TaxIllinois Overtime Tax

Frequently Asked Questions

What is Illinois's income tax rate?
Illinois has a flat income tax rate of 4.95% on all taxable income. All filers pay the same rate regardless of income level. Illinois provides a personal exemption of $2,925 per filer for 2026.
Does Illinois tax groceries in 2026?
No (at the state level). Illinois eliminated its 1% state grocery tax effective January 1, 2026. Qualifying grocery food is now exempt from state sales tax. However, municipalities may still impose up to 1% local tax on groceries.
Does Illinois conform to the OBBBA tips and overtime deductions?
No. Illinois has decoupled from the federal OBBBA deductions for tips and overtime. The federal deduction is added back on Illinois Schedule M. Illinois will still tax tips and overtime at the full 4.95% flat rate.
Does Illinois tax retirement income?
No. Illinois fully exempts retirement income from state income tax, including Social Security benefits, pension income, 401(k) distributions, and IRA withdrawals. This makes Illinois one of the most retirement-friendly states.
What is the sales tax rate in Illinois?
The state sales tax rate is 6.25%. Local jurisdictions add their own rates, and combined rates in the Chicago area can exceed 10%. Most grocery food is now exempt from the state portion.