The State of Illinois has increased the income tax rates beginning on July 1, 2017. For individuals, trusts, and estates, the Illinois Income Tax is increasing from 3.75% to 4.95%. For corporations (excluding S corporations), the Illinois Income Tax is increasing from 5.25% to 7%.
There is no change in the Illinois Replacement Tax rate. The replacement tax rates of 2.5% for corporations, and 1.5% for trusts, S corporations and partnerships remain the same.
Your employer is required to withhold Illinois income tax at the new rate. You may want to look at your paycheck stubs to verify that your employer has made the change. Also beginning in 2017, the personal exemption allowance may not be claimed if your adjusted gross income exceeds $500,000 if your federal filing status is married filing joint, and $250,000 for all other filing statuses. If you are required to make estimated tax payments, you should adjust your estimated payments to account for the increase. Corporations also should adjust their estimated tax payments. Call us today to calculate an adjustment to your estimated tax payments.