Illinois Retirement Income Tax Calculator

Retirement income tax calculation for Illinois. Federal tax follows the shared 2026 Social Security formula and assumes every filer is age 65+ for the additional federal standard deduction. Illinois subtracts federally taxed qualified pension, 401(k), IRA/SEP, governmental retirement, railroad retirement, and Social Security amounts from its base; Publication 120 confirms that early distributions from qualified plans and IRAs may also be subtracted. Mark nonqualified deferred compensation/annuities as nonqualifying. Other entered interest/dividend income remains taxable at 4.95%. This estimate uses the published TY2026 $2,925 personal exemption plus the $1,000 age-65 exemption per filer; both spouses are assumed 65+ on a joint return, and neither filer is assumed to be claimed by another taxpayer. The exemption is zero above $500,000 federal AGI joint / $250,000 other. U.S.-obligation interest and dependent exemptions are not modeled. Recheck by 2027-01-15. Federal tax uses the final 2026 brackets and standard deduction from IRS Revenue Procedure 2025-32, plus the section 63(f) additional standard deduction for age 65+ — $2,050 for a single filer and $1,650 per qualifying spouse (so $3,300 when both spouses are 65+ on a joint return). It does NOT apply the separate enhanced deduction for seniors under 26 U.S.C. §151(d)(5)(C) ($6,000 per qualified individual age 65+, claimed on Schedule 1-A Part V and phased out by 6% of MAGI over $75,000 single / $150,000 joint, available for tax years beginning before January 1, 2029). If you and your spouse are both 65+ and under that phase-out, the unmodelled deduction is worth up to $12,000 of additional federal deductions, so the federal tax shown here is deliberately CONSERVATIVE (too high) rather than optimistic — use the dedicated senior deduction calculator to model it.