Illinois State Income Tax

Illinois income tax is based on the federal tax code but includes some unique additions and subtractions. Those include retirement and Social Security income and contributions to 529 college savings plans. It also taxes telecommunications services and imposes a per-gallon gasoline and diesel tax. Illinois State Income Tax Rate is 4.95%, the state tax form (Form IL-1040) is modeled after the federal Form 1040, and the system is designed to make it easy for taxpayers to use. However, the flat rate can hurt low earners because it doesn’t increase as a person’s income increases.

Unlike other states, Illinois doesn’t offer a property tax deduction for homeowners. The state’s property tax rates are among the country’s highest, varying by municipality. The state also imposes sales and excise taxes on cigarettes and liquor. The state’s sales tax is 1% on qualifying food, drugs, and medical appliances and 6.25% on general merchandise and items that require a title. Counties also impose local taxes.

Those who cannot afford to pay their Illinois taxes in full can request an installment payment plan from the Department of Revenue. The DOR will only accept such requests if they believe the individual can actually afford to make monthly payments. If the DOR does not think that an individual can honor their payment plan agreement, it will file a tax lien against them.

Illinois State Income Tax Due Dates

The Illinois Department of Revenue offers a variety of tools and resources to help taxpayers file state taxes. It also recommends using commercial tax preparation software and authorized providers for filing. Many people choose to use the same program they used to prepare their federal returns to simplify the process and ensure accurate filings.

Income taxes are pay-as-you-go, meaning they are due as income is earned or received during the year. Most taxpayers pay income taxes through withholding from paychecks or other government payments, such as Social Security benefits and unemployment compensation. However, some taxpayers may be required to make quarterly estimated tax payments.

Generally, the due date for an individual’s Illinois return is April 15. If you need more time to file your return, you can request an extension by submitting IRS Form 4868. However, you must still pay any tax owed by the original due date. If you qualify, IDOR will waive any imposed penalties and interest. However, you must respond to any notice that you receive from IDOR and explain why you qualify for relief.