How Illinois takes tax out of a paycheck
Illinois adds one line to the federal income tax, Social Security and Medicare that the federal take-home pay calculator explains: a state income tax at a single rate. For wages paid in 2026:
take-home = W − pre-tax − federal − FICA − Illinois income tax
- Illinois income tax is 4.95% of your income after the exemption allowance, the rate the 2026 Booklet IL-700-T states for individuals. There are no brackets: the first dollar and the millionth are taxed the same.
- Income starts from your federal adjusted gross income, which is the first line of Form IL-1040. Because federal AGI already leaves out 401(k) deferrals and cafeteria-plan health premiums, both lower your Illinois tax by 4.95% of the amount, the same way they lower federal income tax.
- The exemption allowance takes the place of a standard deduction. For 2026 it is $2,925 for you and another $2,925 for your spouse on a joint return, so a single filer subtracts $2,925 and a married couple filing jointly $5,850. The additional exemptions for age 65 and legal blindness, and exemptions for dependents, are not included.
- The income limit removes the allowance entirely once adjusted gross income exceeds $250,000, or $500,000 on a joint return. Income exactly at the limit keeps it. It is a cliff, not a phase-out: one dollar over the limit and the whole allowance is gone.
The calculator figures the tax owed on the year's wages and spreads it evenly over your paychecks. That matches what an employer withholds with the IL-700-T automated payroll method when the allowances on your Form IL-W-4 Line 1 equal your exemptions: at $301 a week, one allowance gives $12.12 a week and two give $9.33, the same amounts the booklet's weekly table prints. The booklet's formula subtracts allowances at any wage, so above the income limit the tax owed here is higher than withholding with allowances would cover.
Like the federal take-home calculator, this page figures tax for one earner with one job. Married filing jointly here assumes your spouse has no wages, so the $32,200 federal joint standard deduction and the joint brackets all go to one salary, and for a couple who both work federal income tax is underestimated: at $85,000 each, the page shows $5,840.00 of federal tax on one salary, against $9,870.00 as that salary's half of the couple's joint tax. The Illinois line has no joint brackets to share, so each salary's half of the couple's Illinois tax is $4,062.72 against $3,917.93 shown here; the only difference is the second allowance, which goes to the one salary. The Additional Medicare Tax threshold for a joint return also counts the couple's combined wages, which are not added up here.
The calculator does not check the yearly limit the IRS sets on 401(k) contributions, which for 2026 is $24,500, plus $8,000 of catch-up from age 50, or $11,250 instead in a year you turn 60 to 63. Whatever you enter in the 401(k) field is treated as a pre-tax deferral, so an amount above the limit makes federal income tax look lower than it will be. Illinois starts from the same federal adjusted gross income, so the Illinois line looks lower by 4.95% of any amount over the limit as well.
Worked example: $85,000 in Illinois, single, paid biweekly
- Adjusted gross income: $85,000, with no 401(k) deferral or cafeteria plan, which is under the $250,000 limit, so the allowance applies.
- Illinois income tax: ($85,000 − $2,925) × 4.95% = $4,062.71, or $156.26 on each of 26 paychecks.
- Federal income tax $9,870.00, Social Security $5,270.00 and Medicare $1,232.50, the same as in any state.
- Take-home pay: $85,000 − $20,435.21 = $64,564.79 a year, or $2,483.26 a paycheck.
What is different about an Illinois paycheck
Pre-tax deductions lower Illinois tax at one rate
Putting $6,000 into a traditional 401(k) lowers Illinois tax by $297.00, to $3,765.71. Paying the same $6,000 as health premiums through a cafeteria plan gives exactly the same Illinois tax, $3,765.71, because neither is part of federal adjusted gross income. Federal income tax falls by more, at your federal bracket rate.
The allowance disappears above the limit
A single filer earning exactly $250,000 owes $12,230.21. At $250,100 the allowance is gone and Illinois tax is $12,379.95: $149.74 more for $100 more salary, of which $144.79 is the allowance that no longer applies.
A 401(k) can bring the allowance back
At $260,000, putting $10,000 into a 401(k) brings adjusted gross income down to $250,000, so the allowance applies again. Illinois tax falls from $12,870.00 to $12,230.21, $639.79 in all: 4.95% of the deferral plus the allowance.
Filing jointly adds one allowance
Filed jointly, the same $85,000 salary owes $3,917.93, $144.78 less than a single filer: the second $2,925 allowance at 4.95%. Filing status changes nothing else on the Illinois line.
Frequently asked questions
Does Illinois have tax brackets?
No. Every dollar of income after the exemption allowance is taxed at 4.95%, whatever your filing status or income. The rate on the federal line changes with your bracket; the Illinois rate does not.
What happens to the exemption allowance at high incomes?
It is not allowed at all once adjusted gross income exceeds $250,000 ($500,000 for a joint return). There is no gradual reduction, so the Illinois tax jumps by $144.79 for a single filer the moment income crosses the line.
What do the allowances on Form IL-W-4 do?
Each Line 1 allowance lowers the wages your employer withholds on by $2,925 a year, spread over your pay periods; Line 2 adds smaller allowances for age 65 or blindness. The calculator uses one allowance for a single filer and two for a joint return, and nothing from Line 2.
Do my 401(k) and health premiums lower my Illinois tax?
Yes, both. Illinois begins with federal adjusted gross income, and neither a traditional 401(k) deferral nor a cafeteria-plan premium is in it. Each $1,000 of either lowers Illinois tax by $49.50.
We are married, file jointly and both work. Is the result right for us?
Not for federal income tax, which is understated by $4,030.00 for each $85,000 salary. The Illinois line is off only by the second allowance, which this page gives to one salary instead of splitting it: $144.79 for each earner.
Which year do these figures apply to?
Wages paid in 2026: the 4.95% rate and the $2,925 exemption allowance from the 2026 IL-700-T, the income limits restated in the Department of Revenue's December 2025 bulletin, and the 2026 federal figures.
Sources
- Illinois Department of Revenue, 2026 Booklet IL-700-T: Illinois Withholding Tax Tables
- Illinois Department of Revenue, Informational Bulletin FY 2026-15: What’s New for Illinois Income Taxes
- Illinois Department of Revenue, Form IL-1040 instructions: adjusted gross income and exemptions
- IRS, Revenue Procedure 2025-32: 2026 federal tax rate tables and standard deduction
- IRS, Publication 15 (2026): Social Security and Medicare rates and 401(k) deferrals
- IRS, Publication 15-B (2026), Table 2-1: cafeteria plan benefits
- Social Security Administration, Contribution and Benefit Base
- IRS, Questions and answers for the Additional Medicare Tax
- IRS, Notice 2025-67: 2026 limits for 401(k) deferrals and catch-up contributions
- IRS, Retirement topics: Catch-up contributions