As of July 1, 2017, the Illinois income tax rate for individuals, trusts and estates increased from 3.75 percent to 4.95 percent. Furthermore, for corporations, they increased from 5.25 percent to 7 percent.
For 2017 calendar year filers of individual returns, the rate would be 4.3549%. For businesses, the appropriate forms will soon be available on Illinois Department of Revenue website. The blended Illinois income tax rate is going to be applied to tax returns from Jan 1 to Dec 31, 2017. Calendar year taxpayers will pay this blended rate based on the number of days under the 3.75% and would pay the rest of the tax based on 4.95% tax rate.
Some taxpayers such as low income individuals who receive a earned income tax credit would get a larger benefit from the credit under the new tax law. On the other hand, individuals with over $250,000 and couple over $450,000 won’t be able to receive any personal exemptions, the Illinois property tax credit and the credit for private school tuition. One possible way of saving is to contribute to a traditional 401(k) or to contribute to a 529 college savings plans. Bright Start contributions are tax deductible up to $10,000 per parent.
For filers with a fiscal year, short year or 52/53 week filers, the amount earned prior to July 1, 2017 is taxed at 3.75% (individuals) or 5.25% (corporations). The amount on or after July 1, 2017 is taxed at 4.95% (individuals) or 7% (corporations). The amount is added together to get the total tax liability.
For more information to get help with estimating your tax liability, please contact us at 312.924.2811