The credit is refundable, which means that if this credit exceeds the tax you owe, it may result in a refund. You can only claim the Illinois EITC/EIC if you qualify for it on your https://www.bookstime.com/ federal income tax return and it’s worth 30% of your federal EITC/EIC. Tax credits, such as the earned income tax credit or child tax credit, can lower your effective tax rate.
In the absence of allowances, filers are required to enter annual dollar amounts for things like income tax credits, non-wage income, itemized and other deductions and total annual taxable wages. While your marginal tax rate refers illinois income tax rate to your highest tax bracket, your effective tax rate is the average amount of taxes you’ll pay overall. To find your effective tax rate, you’ll need to divide the total dollar amount of tax you pay by your taxable income.
Illinois State Income Tax Credits
To determine your effective tax rate, divide your total tax owed (line 16) on Form 1040 by your total taxable income (line 15). The marginal tax rate is the tax rate paid on the last dollar of taxable income. When calculating your Illinois income tax, keep in mind that the Illinois state income tax brackets are only applied to your adjusted gross income (AGI) after you have made any qualifying deductions. In Illinois, property tax is a fee that homeowners have to pay to the county where they have their property.
There are seven income tax rates for the 2024 tax year, ranging from 10% to 37%. The 2024 tax brackets apply to income earned this year, which is reported on tax returns filed in 2025. Each of those states has its own complex set of rules of tax credits, deductions and income floors to pay any state taxes at all.
What is Illinois’s marginal tax rate?
But in some of those states, higher sales tax rates or property tax rates are in place to make up for the lower income tax revenue. Tennessee and Washington have some of the highest sales tax rates in the country, the Tax Foundation says. Illinois has a flat income tax rate which applies to both single and joint filers. The Federal Income Tax, in contrast to the Illinois income tax, has multiple tax brackets with varied bracket width for single or joint filers. When filing an income tax return in Illinois, taxpayers begin with their federal adjusted gross income (AGI, or taxable income, is income minus certain deductions). From there, certain items may be added back in, and others may be subtracted.
- They are always federally taxed, no matter which tax bracket you’re in.
- However, before we explain how to calculate Illinois state tax, we will explain your adjusted gross income (AGI).
- Please add any additional deductions for items like health insurance, 401(k), HSAs/FSAs, or any other benefits.
- Cook, Kane and Warren counties are home to the state’s highest combined sales tax rates of 11.50%, 11% and 11%, respectively.
Other forms of supplemental wages you can seek include bonuses, commission, stock options and prizes. Supplemental wages are taxed at the same rate as regular income in Illinois. The national average adjusted gross income (AGI) reported by the IRS each year is about $70,000. A single Illinois taxpayer with $70,000 in wages would pay approximately $3,345 to the Illinois Department of Revenue. The actual amount of income tax you will pay in the state of Illinois will vary.
Illinois Tax Tables 2023 – Tax Rates and Thresholds in Illinois
On top of that state sales tax, local governments can impose their own sales taxes, which can add to the costs of purchases made in different jurisdictions. SurePayroll supports over 6,000 active U.S. tax codes, including complex ones like Washington and Pennsylvania. We monitor SUI rate changes, wage base limits, and compliance mandates at the federal, state, local, city, and county levels to ensure you stay compliant. MoneyGeek’s system of grading states on tax burden only holds true for that hypothetical family.
