What is the Illinois Income Tax Rate for 2021?

January 4, 2022 by No Comments



January 3, 2022
Posted By: growth-rapidly
Tag: Uncategorized

What is the Illinois Income Tax Rate?

If you are an Illinois resident who worked in 2021 and is eligible to file an income tax return, you might be wondering what the Illinois Income tax rate is for 2021. If that is the case, then you have come to the right place.

The Illinois income tax rate for 2021 is 4.95% percent (for individual income tax). This is a flat rate, which means that no matter how much money you make, you pay that same rate. If you need help with your taxes this year, whether it’s individual or business taxes, talk to a financial advisor near you who can help.

Keep reading to learn more about the Illinois income tax rates.

Illinois Income Tax Rate 2021: Overview

State individual income tax rates for 2021 vary depending on the state you reside. Some states have a flat tax rate and others have a marginal tax rate. Illinois, for example, has a flat rate income tax. That means everyone, no matter how much money they make in a given year, pays the same rate.

This flat income tax rate makes it very easy to predict how much you will pay in Illinois.

For individual, the Illinois income tax rate is 4.95 percent for tax years ending on or after December 31, 2021. That rate has been the same since 2017. For business, the income tax rate is 7 percent of net income and 4.5 percent of net income for trusts and estates.

Quick Facts of the Illinois income tax rate.

Tax Types Illinois Current Income Tax Rate
Individual Income Tax

Effective July 1, 2017:

  • 4.95 percent of net income
Business Income Tax

Effective July 1, 2017:

  • Corporations – 7 percent of net income
  • Trusts and estates – 4.95 percent of net income

Personal Property Replacement Tax

Corporations (other than S corporations)

  • 2.5 percent of net income

Partnerships, trusts, and S corporations

  • 1.5 percent of net income
Withholding (payroll) Effective July 1, 2017, 4.95 percent of net income is required to be withheld from:

  • employee compensation based on the number of allowances claimed by the employee,
  • Illinois lottery winnings each time a single payment is over $ 1,000 for both Illinois residents and nonresidents, and
  • other gambling winnings paid to an Illinois resident

if the winnings are subject to federal income tax withholding requirements.

Illinois Income Tax Rate: Filing Your Return for 2021

Now that you have an idea of ​​what the Illinois income tax rate is, you might be wondering how to file your return. It is easy. You have several options.

One of the options is to go to an accountant in Illinois. A simple google search can direct you to the right one. If your tax is more complex, a financial advisor might be the best route to go to. Another option is to do it on your own.

If you want to file your income tax return on your own, go to mytax.illinois.gov. The form you will need is the 2021 Form IL-1040, Illinois Individual Income Tax return. The due date for filing your 2021 Form IL-1040 and paying any tax you owe is April 15, 2022.

Are you eligible?

While figuring out your Illinois income tax rate is easy, you still need to know if you are eligible before filing.

You are eligible to file an Illinois Income Tax Return (IL-1040) via MyTax Illinois if you

  • have not filed an individual income tax return for this tax year;
  • are an established Illinois taxpayer or have a valid Illinois Driver’s License or Illinois State Identification Card;
  • have a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN); and
  • have a valid email address

If you satisfy the above requirements, then you are eligible. The next step is to…

Gather Your Information

  • a copy of your federal income tax return and schedules;
  • copies of all W-2 and 1099 forms;
  • tax returns you filed with other states;
  • your property number and amount of property tax paid;
  • receipts for qualified education or moving expenses; and
  • your routing and account number if you are due a refund and choose to deposit your refund directly into your checking or savings account

In conclusion, the tax rate is 4.95 percent for tax years ending on or after December 31, 2021. This is a flat rate, meaning that no matter how much you make, you pay the same rate. For business, the income tax rate is 7 percent of net income and 4.5 percent of net income for trusts and estates.

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