Updated October 2, 2026. Quick answer: The Illinois Department of Revenue’s 2026 withholding tables state a tax rate of 4.95%, effective January 1, 2026, and a withholding rate of 4.95%. To figure withholding, subtract any exemptions from the wages paid and multiply the result by 4.95%.
More Illinois IL-1040 and Schedule M lines, one by one: IL-1040 line 1, IL-1040 line 10 and Schedule M line 13.
The 2026 rate
The Department’s 2026 IL-700-T page is headed “Effective January 1, 2026, Tax Rate 4.95%”. It repeats the figure in its instructions: “The Illinois Income Tax withholding rate is 4.95%.” The page adds that its information is “for reference only” and that it does not replace Illinois statutes, rules or court decisions.
How the department says to apply it
The page tells employers to “subtract any exemptions from the wages paid, then multiply the result by 4.95%”. Other types of payments, such as lottery or gambling winnings, follow their own rules in Publication 130.
A worked example
As a computed example (an illustration, not a source figure), take $65,000 of Illinois taxable income in 2026 after exemptions. At 4.95% the tax is $3,217.50 (computed). The same rate applies to every dollar of that amount; the department’s page names one rate and no brackets.
What this page does not cover
This page reports the rate the withholding page states. It does not read the statute itself, and it does not cover Illinois’s exemption amounts, credits or what the state does and does not tax in retirement. Read the Illinois retirement taxes page for retirement income.
Common mistakes
- Looking for brackets. The department’s page names a single rate.
- Applying 4.95% to wages before subtracting exemptions.
- Using a rate from an older year’s withholding table.
- Treating the withholding page as a substitute for the statute or the return instructions.
Related: how Illinois taxes retirement income, whether Illinois taxes pensions, whether Illinois taxes Social Security, and the federal 2026 tax brackets.
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Sources
- Illinois Department of Revenue, 2026 IL-700-T Illinois Withholding Tax Tables: https://tax.illinois.gov/forms/withholding/currentyear/il-700-t-withholding-guide-tables.html
- Illinois Department of Revenue (where later updates appear; no figure on this page comes from it): https://tax.illinois.gov/
Sources: the primary documents linked above, read on October 2, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.