Qualifying deductions might include an itemized deduction, the Illinois standard deduction, exemptions for dependants, business expenses, etc. The difference between the exemption allowance and the standard deduction is that you can still take it even if you have other subtractions from your income as discussed above. With the standard deduction, generally speaking, you have to choose whether to take it or add up your itemized deductions il income tax brackets and claim those instead. If you have more than one job, you’ll need to split your allowances between your jobs. You can’t claim the same allowances with more than one employer in a single tax year.
Illinois State Income Tax Credits
An alternative is to divide your allowances between the two jobs on the Form IL-W-4 you give to each employer, or you could claim all your allowances with one job and none with the other. If you double-claim allowances while holding more than one job, you’ll owe more money at tax time. Illinois has a flat income tax of 4.95%, which means everyone’s income in Illinois is taxed at the same rate by the state. No Illinois cities charge a local income tax on top of the state income online bookkeeping tax, though.
Illinois Income Taxes
There are a few exceptions, including military pay you received as a civilian.Nonresidents — those who only live in the state because of military assignment — are not required to report military pay to Illinois. If you want more money in your Illinois paycheck, aside from asking for a raise, you can also work overtime if your job allows it. 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. Previously, the tax rate was raised from 3% to 5% in early 2011 as part of a statewide plan to reduce deficits. If you expect to owe $500 or more on April 15th, you must pay your income tax to Illinois quarterly using Form IL-1040-ES.
Earned Income Credit
Illinois offers a homestead exemption up to a maximum of $10,000 in Cook County and $6,000 in all other counties. You must own the property and use it as your principal dwelling place. The exemption varies for others, such as persons with disabilities and veterans. Income from Illinois sources if your adjusted gross income is higher than your Illinois exemption allowance. Illinois also has a set of tax agreements with the neighboring states of Iowa, Kentucky, Michigan and Wisconsin through virtual accountant which those states don’t tax Illinois residents who work within their borders. So if you live in Illinois and work in Iowa, Kentucky, Michigan or Wisconsin, you’ll have to pay tax to your home state.
Illinois Tax Estimator
Some employees in Illinois might have more money taken from each paycheck. For example, if you pay a share of premiums for health insurance, life insurance or disability insurance through your company, that money will be deducted from your earnings. You might also have money subtracted from your paycheck if you contribute to a 401(k), a flexible spending account (FSA) or a health savings account (HSA). There’s no specific payroll tax in Illinois, but employers are obligated to contribute to the state’s unemployment insurance fund. The telecommunications tax is a tax on services including home phone lines, cell phones, television service and internet. It varies by location, but is generally about 7% of the price of service.
- The Education Expense Credit provides a credit to parents who spent over $250 on eligible K-12 education expenses.
- You can only claim the Illinois EITC/EIC if you qualify for it on your federal income tax return and it’s worth 30% of your federal EITC/EIC.
- The tax rate for Illinois will be updated as soon as they are available.
- You must own and live in the residence, and your income must be below $500,000 (married filing jointly) or $250,000 (all other filers) to be eligible for this tax credit.
- Illinois provides a standard Personal Exemption tax deduction of $ 2,625.00 in 2024 per qualifying filer and qualifying dependent(s), this is used to reduce the amount of income that is subject to tax in 2024.
