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These are the states with the lowest tax burdens, ing to USAFacts: Alaska (5.36%) Tennessee (6.33%) New Hampshire (6.37%) Wyoming (6.63%) Florida (6.73%) Delaware (6.77%) South Dakota (7.03%) Montana (7.33%)
Generally, the rate for withholding Illinois Income Tax is 4.95 percent. For wages and other compensation, subtract any exemptions from the wages paid and multiply the result by 4.95 percent.
The Takeaway. States without income taxes may save you a lot of money when its time to file taxes, but there may be hidden costs of living in such states, like higher sales and property taxes. Before moving, its important to consider the full picture to better understand the potential impact on your finances.
Does Illinois tax Social Security? Illinois doesnt tax Social Security or any other type of retirement income. Social Security benefits, pensions, IRA, and 401(k) distributions are tax-exempt. However, Illinois has a flat income tax rate of 4.95%, so earnings from other sources (such as investment income) are taxable.
What State Has the Highest Income Tax? California has the highest state income tax, with a rate of up to 13.3%. California has graduated-rate income taxes that range from 1% to a 13.3% tax rate on income of more than $1 million. Middle-class Californians pay an income tax rate in the range of 6% to 9.3%.
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Which Are the Tax-Free States? As of 2023, Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming are the only states that do not levy a state income tax. Note that Washington does levy a state capital gains tax on certain high earners.
MoneyGeeks analysis found that Wyoming is the most tax-friendly state in America, followed by Nevada, Tennessee, Florida and Alaska. States that received a grade of A all share something in common: no state income tax.
That means that your net pay will be $72,632 per year, or $6,053 per month. Your average tax rate is 27.4% and your marginal tax rate is 36.2%.

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