Graduated Income Tax Proposal Part II: A Guide to the Illinois Plan


Cable tax rates are 5% of gross receipts for cable charges. Electricity tax rates are based on kilowatt hours used. Corporations with more than 80 percent of their payroll and property outside the United States are NOT included in combined returns. Corporations with unique apportionment formulas are not included in combined returns. Despite being asked to pay more than anyone else, the state’s worst-in-the-nation pension debt eats dollars that should be spent on improvements to public services – the things residents expect their taxes to be used for.

  • These rates are based on local legislation and can change at any time.
  • This marginal tax rate means that your immediate additional income will be taxed at this rate.
  • The general merchandise sales tax applies to almost all other products purchased for use in Illinois.
  • Federal taxes are assessed according to the Income Tax Withholding Table.
  • Three 501 organizations have been formed to support the Fair Tax amendment.

3″Rhode Island what is illinois income tax rate rate scheduled to decrease to $3.75 on July 1, 2015.” Food and drugs are taxed at the reduced rate of one percent. Prepare and e-File your 2022 Illinois Income Taxes here on eFile.comtogether with your Federal Income Tax Return.

The Graduated Income Tax Proposal: An Issue Brief

Under the new structure, single filers earning more than $750,000 and joint filers earning more than $1 million would be taxed at the top rate of 7.99%. For only that highest bracket, the taxpayers’ net income would all be taxed at that top rate, unlike the rest of the brackets. In 2017, the legislature overrode Rauner’s veto of a budget that included a tax increase, ending the impasse and bringing the rate back up to 4.95% where it remains today. Unlike the Federal income tax, the Illinois income tax does not allow itemized deductions. You may claim the Illinois standard deduction if applicable, and specific deductions may be available to Illinois taxpayers as limited deductions or tax credits. The Illinois income tax was lowered from 5% to 3.75% in 2015.

The constitutional amendment itself would remove the requirement that income be taxed at a flat rate. The state government would then be allowed to change income tax rates through the normal legislative process. The Illinois legislature proposed a new set of income tax rates in Senate Bill 687, which was enacted shortly after the constitutional amendment was approved to be placed on the ballot.

Support Sound Tax Policy

Last year, at the urging of Governor J.B. Pritzker, the General Assembly approved aconstitutional amendmentto go before voters in November 2020 that removes the flat-tax requirement. The amendment also modifies the corporate rate limit by requiring that the highest corporate rate not exceed the highest individual rate by more than 60%. Our state ranking and income tax figures are based on a family of four earning the national median household income of $50,000 per year.

  • The property tax credit allows individuals or households with an Adjusted Gross Income of $500,000 to receive a credit on their income taxes.
  • Illinois’ maximum marginal income tax rate is the 1st highest in the United States, ranking directly below Illinois’ %.
  • 3″Rhode Island tax rate scheduled to decrease to $3.75 on July 1, 2015.”
  • Illinois has a flat income tax that features a 4.95% rate.
  • Proponents argue that a tax structure which includes lower rates for lower-income residents and higher marginal rates for higher-income residents would be fairer.
  • Additional training or testing may be required in CA, OR, and other states.