No. Illinois does not have a local income tax, and no city, county, township, or other local government in the state can impose one on your wages or earnings. The state constitution reserves income taxation to the state itself, so the only income tax that comes out of an Illinois paycheck is the state’s flat 4.95% rate. Chicago included: there is no Chicago income tax, no Cook County income tax, and no municipal payroll tax on your earnings anywhere in Illinois.
Why Local Governments in Illinois Can’t Tax Your Income
Two provisions of the Illinois Constitution work together to shut the door on local income taxes.
Article VII, Section 6(e) addresses home rule units, the category that includes Chicago and most larger Illinois municipalities. It says home rule units may impose taxes measured by income or earnings only if the General Assembly specifically authorizes them to do so by law.1Illinois General Assembly. Illinois Constitution – Article VII The General Assembly has never granted that authorization. Without it, no home rule city has the legal power to create one, and non-home-rule units have even less latitude.
Article IX, Section 3 handles the state side. It limits Illinois to a single, non-graduated income tax on individuals and a single one on corporations.2FindLaw. Illinois Constitution Art. IX, Section 3 – Limitations on Income Taxation One state, one rate, no local layer on top.
The practical result for anyone living or working in Illinois: your pay stub should show Illinois state income tax withholding and federal withholding, and nothing labeled as a city or county income tax. If you see a local wage or earnings tax on your stub, it is almost certainly tied to work performed in another state, not to anywhere in Illinois.
How Illinois Cities and Counties Raise Money Instead
Local governments in Illinois fund themselves through other revenue sources rather than income taxes. The main ones you encounter as a resident are property taxes, local sales tax add-ons, and various fees and charges. Property tax in particular does a lot of work in Illinois, which is part of why the state offers a Property Tax Credit on the state return for homeowners who pay property tax on a principal residence.3Illinois Department of Revenue. Pub-108, Illinois Property Tax Credit None of these local sources are structured as a tax on your income.
The One Income Tax You Do Pay: The 4.95% State Rate
Illinois charges every individual taxpayer the same income tax rate: 4.95% of net income.4Illinois Department of Revenue. Income Tax Rates It does not matter whether you earn $30,000 or $300,000, and it does not matter whether you live in Chicago, Peoria, Rockford, or a rural township. The percentage is the same statewide because the constitution requires it to be.
Net income is roughly your federal adjusted gross income, adjusted for a handful of items Illinois treats differently (Social Security and qualifying retirement income can be subtracted, for example), minus your personal exemption. For tax year 2026, the personal exemption is $2,925 per person.5Illinois Department of Revenue. FY 2026-15, What’s New for Illinois Income Taxes You multiply what remains by 4.95% to get your base tax, then apply any credits you qualify for.
Corporations are the only other filers subject to Illinois income tax. They pay a 7% corporate income tax plus an additional 2.5% personal property replacement tax, for a combined 9.5% rate.6Illinois General Assembly. 35 ILCS 5/201 – Tax Imposed That rate also runs at the state level only; cities and counties do not add a local corporate income tax on top.
What If You Work Across State Lines?
The absence of local income tax inside Illinois does not mean you can never face a local or out-of-state wage tax. The source of the tax matters, and crossing a state line changes the analysis.
Illinois Residents Working in a Reciprocal State
Illinois has reciprocal agreements with Iowa, Kentucky, Michigan, and Wisconsin. If you live in Illinois and work in one of those four states, only Illinois taxes your wages. You report the income on your Illinois return, and if the other state withheld tax from your pay by mistake, you claim a refund from that state directly.7Illinois Department of Revenue. Filing Requirements
Nonresidents Working in Illinois
If you live elsewhere and come into Illinois to work, Illinois taxes your Illinois-source wages once you have worked more than 30 days in the state during the year. Under that threshold, the income is not subject to Illinois tax and your employer does not need to withhold. Even then, the tax is the state’s 4.95%, not anything imposed by the Illinois city or county where you worked.
The Convenience-of-the-Employer Wrinkle
A smaller group of states, most notably New York, use what is called a convenience of the employer rule. Under that rule, wages are taxed based on where your employer’s office sits, not where you physically do the work. If your employer is in one of those states and you telecommute from Illinois, you can end up owing tax to both the other state and Illinois on the same wages. Illinois provides a credit for taxes legitimately paid to another state on the same income, but in a convenience-of-the-employer scenario that credit may not fully offset the double hit. This is a cross-state issue rather than a local Illinois tax, but it is the situation most likely to make an Illinois resident see out-of-state wage tax on a pay stub.
The Bottom Line for Illinois Taxpayers
If you live and work in Illinois, you deal with one income tax: the state’s 4.95% flat rate. There is no additional municipal income tax in Chicago, no county-level income tax in Cook County or anywhere else, and no local payroll or earnings tax layered onto your wages by an Illinois government. Local governments do collect from you through property tax bills, sales tax at the register, and fees for specific services, but none of those are taxes on your income. The only time an income or wage tax from a jurisdiction other than Illinois can hit your paycheck is when the work itself crosses a state line, and even then it is another state’s tax, not a local Illinois one.