How to Calculate State Taxes in Illinois

by Tiffany Garden

If you are an Illinois resident or you work in the state during the year, you must file Illinois state tax returns and pay any income tax liability. Illinois uses a flat-rate tax system instead of tax brackets. The flat rate allows you to easily calculate your state tax, as you only need to know the tax rate in effect for the current year.

1. Fill out your personal information in "Step 1: Personal Information" on Form IL-1040.

2. Pull a copy of your completed federal Form 1040. Note the amounts on line 37, which is your adjusted gross income. Enter this amount on Step 2, line 1 of your Illinois state income tax form.

3. Look at your federal Form 1040 and note the amount on line 8b, which is your tax-exempt interest and dividend income. Enter this amount on line 2 of your Illinois state income tax form. Report any other taxable income on line 3. Add these lines together and enter the total on line 4.

4. Enter your Social Security income included in your gross adjusted income reported on your federal tax return on line 5 of your Illinois return. If you overpaid your Illinois state income tax, report the amount overpaid on line 6. Enter any other income reductions on line 7. Add these lines together and report the sum on line 8. Calculate your Illinois base income by subtracting the total deduction amount in this section from the figure on line 4.

5. Enter your total exemptions on line 10a and multiple by 2,000. Report the result on line 10a. Check the appropriate boxes if you are older than 65 or blind and add those exemption values to the 10a figure. Enter this amount on line 10.

6. Take the figure from line 9 and subtract the amount on line 10. Enter the result on line 11. Multiply this figure by .03 and enter the amount on line 15. This is your Illinois state tax income liability.

Items you will need

  • Form IL-1040
  • IRS Form 1040

Photo Credits

  • Jupiterimages/ Images