Illinois 2026 State Income Tax: Flat 4.95% Rate, No Brackets

(ILLINOIS) If you live or work in Illinois, the single most important number to know for 2026 state income tax planning is this: Illinois uses a flat individual income tax rate of 4.95% for tax year 2026, with no multiple brackets for individual taxpayers. That means Illinois does not apply a rising set of rates as income grows; instead, the same percentage applies across Illinois taxable income.

The Illinois Department of Revenue lists the individual income tax rate—effective July 1, 2017—as 4.95% for individuals, and it also lists trusts and estates at 4.95%. Readers can confirm the official rate directly with the state at the Illinois Department of Revenue income tax rates page. Multiple independent tax resources also state that Illinois continues to apply a flat 4.95% rate for 2026 individual income tax withholding and calculations, including SmartAsset, OnPay payroll guidance, and Paycor’s state rate listing.

According to analysis by VisaVerge.com, tax clarity matters for immigrants because state withholding touches day-to-day life first—your paycheck—long before any annual tax filing questions get sorted out.

The core requirement for 2026 calculations: one rate, no brackets

Illinois’s rule is simple in concept: every taxpayer’s Illinois taxable income is taxed at a single flat rate of 4.95%. Because there are no state income tax brackets to apply progressively, you do not need to figure out which “slice” of income falls into which bracket for Illinois purposes.

What you still need to do is confirm you are applying the rate to the right base—your Illinois taxable income—and then multiply by 4.95%. The source material does not provide the steps for how Illinois taxable income is computed from federal adjusted gross income (AGI), so if you need that base calculation, you should check Illinois Department of Revenue guidance or ask a qualified tax professional for help.

Key takeaway: One flat rate (4.95%) applies — make sure it’s applied to your Illinois taxable income, not automatically to your federal AGI.

Who the flat 4.95% rate applies to

Based on the Illinois Department of Revenue’s published rate listing described in the source material, the 4.95% rate is listed for:

• Individuals
• Trusts
• Estates

If you are an employee, the rate also matters because employers use it for payroll withholding unless a specific exemption or withholding allowance applies.

Payroll withholding: how this hits immigrants first

For many newcomers—international students on practical training, work visa holders, refugees, and new permanent residents—the first contact with Illinois income tax isn’t the April filing deadline. It’s the amount that comes out of each paycheck.

The source material explains that employers withhold Illinois income tax at 4.95% from wages for payroll purposes unless a specific exemption or withholding allowance applies. In plain terms: when payroll runs, Illinois withholding is often calculated using the flat 4.95% rate, unless your situation qualifies for different treatment under withholding rules.

Practical example (rate-only illustration)

If $1,000 of wages is subject to Illinois withholding in a pay period, a rate-only illustration would be:

1. Calculate: $1,000 × 4.95% = $49.50 withheld for Illinois income tax.
2. Note: This is before considering any exemption or withholding allowance that could change the result.

This is an example of the math behind a flat rate, not a guarantee of what your paycheck will show.

Documents and records you should keep

The source material focuses on the rate and withholding concept, not a full filing checklist. Still, immigrants and other mobile workers can protect themselves by keeping clear records that show what was withheld and why. That helps when you later reconcile withholding against what you owe.

Keep copies (paper or digital) of:

• Pay statements that show Illinois income tax withheld at 4.95% (or another amount if an allowance/exemption changes it)
• Any employer onboarding paperwork about tax withholding
• Year-end wage statements you receive from your employer

If you are starting a new job, your employer will also ask for federal work authorization and tax withholding information. Two common federal forms and resources are:

• Form I-9, used to verify identity and work authorization for employment in the United States 🇺🇸: USCIS Form I-9 page
• Form W-4, used to set federal income tax withholding with your employer: IRS “About Form W-4” page

These federal forms are not Illinois tax forms, but they are part of the same hiring workflow where state withholding is often set up.

Application process overview: how the rate is applied in real life

There is no special application to “get” the Illinois 4.95% rate. It is the statewide rate Illinois uses for individuals for tax year 2026, with no brackets. In practice, people apply the rate in two main places:

1. Payroll withholding during the year
   • Employers withhold Illinois income tax from wages at 4.95%, unless an exemption or withholding allowance applies.
2. Tax calculations at filing
   • The same flat rate is applied to Illinois taxable income when you or your tax preparer computes the Illinois income tax amount.

If your situation is complicated—multiple jobs, mid-year moves, or mixed income sources—your best first step is to confirm the current rate and any updates directly through the Illinois Department of Revenue and then match your payroll settings to your facts.

Tips to avoid common paycheck mistakes tied to the flat 4.95% rate

• Check your first paycheck in a new job. If Illinois withholding is missing or looks far off, raise it quickly with payroll. Fixes are easier early.
• Don’t assume “no brackets” means “no paperwork.” A flat rate only means the percentage is the same; it does not mean withholding allowances or exemptions never apply.
• Use the official state source for the rate. Independent tax sites may be helpful, but the Illinois Department of Revenue is the authority for the 4.95% figure and its effective date.
• If you’re paid from outside Illinois, confirm what payroll is doing. The source material confirms the rate and withholding concept, but it does not spell out cross-border rules. Ask payroll what state they are withholding for and why, and keep the answer in writing.

Warning: This article explains the flat-rate concept and withholding practice but does not replace professional tax advice. For base calculations (how Illinois taxable income is derived from federal AGI) or complex situations, consult the Illinois Department of Revenue or a qualified tax professional.