Illinois vs Indiana: Tax Comparison (2025)
How do Illinois and Indiana compare on taxes? Here is a side-by-side breakdown of income tax, property tax, sales tax, and total tax burden.
Comparing Illinois and Indiana on state income tax requires lining up bracket-by-bracket marginal rates against household income, plus the state-specific standard deduction. The calculator on the compare page does this for any household-income input and renders the side-by-side effective rate; the headline below summarizes the structural difference.
A few caveats. The calculator handles state income tax and federal income tax — it does not currently model state sales tax, property tax, or local-option income taxes that some states allow at the city or county level. For households where those non-income tax components are material, treat the state-vs-state comparison as the income-tax centerline rather than the full total-burden picture.
| Metric | Illinois | Indiana |
|---|---|---|
| Top Income Tax Rate | 4.95% | 3.05% |
| Effective Property Tax | 2.08% | 0.83% |
| Combined Sales Tax | 8.82% | 7% |
| Total Tax Burden | 12% of income | 9.30% of income |
| Taxes Social Security | No | No |
| Capital Gains Treatment | As Income | As Income |
| Estate Tax | Yes ($4.0M exempt) | No |
| Inheritance Tax | No | No |
| Retirement Friendly | Friendly | Moderate |
Frequently Asked Questions
It depends on your income and situation. Compare the total tax burden, including income tax, property tax, and sales tax, using the table above. Illinois's overall tax burden may differ significantly from Indiana's depending on your filing status and income level.
Retirement tax friendliness depends on how each state taxes Social Security, pensions, and retirement account withdrawals. States with no income tax (like Texas, Florida, or Nevada) generally favor retirees, but property and sales taxes also matter. Consult a tax advisor for personalized guidance.
Property tax rates vary by county within each state. The effective rates shown above are statewide averages. Your actual property tax depends on your home's assessed value and local tax rates.
Calculate Your Exact Tax
See your full federal + state tax breakdown with our income tax calculator.
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Side-by-side comparison using 2025 federal and state tax data. Not tax advice, consult a qualified tax professional for your specific situation.
Source: U.S. Internal Revenue Service, 2026.