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.
| 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.
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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.