Article I of the United States Constitution created and empowered our legislative branch of government. The United States Congress leads the legislative branch. Congress includes both the House of Representatives and the Senate. Generally speaking, Congress makes our laws.
Illinois income tax is levied at a flat 3% rate regardless of income level. A deduction of $2,000 is allowed for each exemption claimed on your federal return. You can also receive an additional $1,000 exemption if you or your spouse is 65 or older, legally blind, or both.
Most, but not all, retirees will find Illinois to be tax-friendly. The state has full deductions for Social Security, pension income and income from retirement savings accounts. In other words, retirees who are not working will not pay income taxes. However, retirees in Illinois do pay other types of taxes, namely the stateâs sales and property taxes. The average state local sales tax rate is 8.19%, while the average effective property tax rate is 2.13%. Illinois also has its own estate tax.