Estimates only — this is not tax advice. Consult a CPA or enrolled agent before acting on these figures. The calculator does not model the alternative minimum tax, wash sales, like-kind exchanges, QSBS, installment sales, or state additions and subtractions. See what is out of scope.
Show your work — 0 steps, each with its rule and citation
How Illinois taxes a capital gain
Statutory authority: 35 ILCS 5/201; Ill. Dept. of Revenue, Income Tax Rates
One rate, applied to everything
Illinois taxes individual income at a flat 4.95%, and capital gains are income. There is no preferential long-term rate, no exclusion, no holding-period distinction and no bracket to climb. A $10,000 gain and a $10,000,000 gain are taxed at the same percentage.
That makes Illinois unusually easy to plan around. The marginal rate on your next dollar of gain is 4.95% regardless of how much you have already realised, so the timing games that matter in graduated states — spreading a sale across tax years to stay under a threshold — buy you nothing at state level here. They can still be worth doing for federal reasons.
The rate has not moved since 2017
The 4.95% rate took effect on 1 July 2017 and has been unchanged since. It is a standing statutory rate rather than an annually indexed figure, which means it does not drift each January the way bracket thresholds do in other states — it changes only when the legislature changes it.
A graduated-rate amendment was put to Illinois voters in 2020 and rejected, leaving the flat structure in place. Any future move to graduated rates would require a constitutional amendment, not merely a statute.
What the flat rate does not soften
Because Illinois offers no preferential treatment, the state rate applies fully to gains that are federally advantaged. A taxpayer whose long-term gain falls entirely in the federal 0% band still owes Illinois 4.95% on the whole thing. For modest gains at modest incomes, the state can easily be the larger of the two bills.
The federal side is unchanged: 0/15/20% on long-term gains, ordinary rates on short-term, the 3.8% net investment income tax above the thresholds, the Section 121 exclusion on a main home and Section 1250 recapture on a rental.
What the calculator shows you, and what it leaves out
Because the rate is flat and the structure has no thresholds, Illinois is one of the few states where this calculator can give you a state figure with no approximation in the rate itself. There is no bracket ladder to stack a gain against, and no year-end indexed table to wait for — so unlike California or Ohio, the Illinois number here is not carrying a prior-year figure.
What it does approximate is the base. Illinois starts from federal adjusted gross income and then applies its own additions and subtractions, which this calculator does not model. For a straightforward salary-plus-sale situation the difference is small; if your return carries significant Illinois-specific adjustments, treat the state line as indicative. The full list of what is and is not modelled is on the methodology page.
A worked Illinois example
Every figure below is computed by the same engine that powers the calculator above, at the moment this page was built — not typed in by hand. When the tax-year data is updated, this example updates with it.
A $200,000 gain that is federally cheap and locally not
A single Illinois resident earning $120,000 realises a $200,000 long-term gain.
- Taxable income after deduction
- $303,900
- Taxable gain
- $200,000
- Tax owed without the sale
- $17,570
- Tax the sale added
- $34,560
- of which net investment income tax
- $4,560
- Total federal tax
- $52,130
- Illinois state tax
- $9,900
- Effective rate on the gain
- 17.28%
The Illinois figure is simply 4.95% of the gain — no stacking, no thresholds, nothing to optimise. All the complexity in this example is federal.
Caveats on this example (1)
- Net investment income was derived from capital gains and qualified dividends only. Interest, non-qualified dividends, rents, royalties and passive business income inside ordinaryIncome are also net investment income under IRC 1411(c) and are not counted here.
Show the working — 13 steps, each with its citation
- Net short-term capital gain or loss for the year$0
Assets held one year or less. Taxed at ordinary rates if a net gain.
- Net long-term capital gain or loss for the year$200,000
Assets held more than one year. Eligible for the 0/15/20% rates.
- Standard deduction-$16,100
Adjusted gross income of $320,000 less $16,100.
- Taxable income$303,900
The figure the rate tables and the capital gain ceilings are both measured against.
- Ordinary income taxed at 10%$1,240
$12,400 of taxable income between $0 and $12,400.
- Ordinary income taxed at 12%$4,560
$38,000 of taxable income between $12,400 and $50,400.
- Ordinary income taxed at 22%$11,770
$53,500 of taxable income between $50,400 and $103,900.
- Ordinary income stacked below the long-term gain$103,900
Long-term gain is taxed by reference to where it sits ON TOP of $103,900 of other taxable income, not from the bottom of the rate table.
- Long-term gain taxed at 15%$30,000
Gain between the $49,450 zero-rate ceiling and the $545,500 15% ceiling.
- Net investment income tax threshold$200,000
Modified AGI of $320,000 against the $200,000 threshold for a single filer. This threshold is statutory and is not adjusted for inflation.
- Net investment income tax at 3.8%$4,560
3.8% of $120,000, the lesser of net investment income ($200,000) and the amount by which modified AGI exceeds the threshold ($120,000). Here the binding figure is the excess of modified AGI over the threshold.
- Illinois income tax at 4.95%$9,900
Flat 4.95% of net income, effective 1 July 2017 and unchanged since. Capital gains are taxed as ordinary income with no preferential rate and no exclusion. A standing statutory rate, not annually indexed.
- Total tax$62,030
$62,030 on $320,000 of total income, an effective rate of 19.38%.
What this calculator does not cover for Illinois
The Illinois figure stacks your gain on your federal ordinary taxable income. Illinois computes its own taxable income with its own additions and subtractions, which are not modelled here — so treat the state number as a close approximation for a straightforward wage-and-sale situation, and as a rough one if your return carries significant state adjustments.
Full-year residency is assumed throughout. Part-year residents, non-residents, and gains sourced to property in another state all turn on rules this calculator does not model. The complete list of what is in and out of scope is on the methodology page.
Other states
- OhioA single 2.75% rate from 2026, above an indexed floor.
- PennsylvaniaFlat 3.07%, no holding-period distinction, and unusual loss rules.
- New JerseyOrdinary income to 10.75%. Fixed thresholds, and no loss carryforward.
See the full 2026 capital gains guide for the federal rules that apply wherever you live — the rate ladder, the net investment income tax, the home-sale exclusion and depreciation recapture — plus every state we currently cover.