---
title: "Illinois vs Texas Taxes: Complete Comparison + Calculator"
description: "IL vs TX tax comparison 2026. Texas has no income tax vs Illinois 4.95% flat tax. Chicago to Austin/Dallas migration guide with savings calculators."
canonical_url: "https://www.themoneypocket.com/articles/illinois-vs-texas-taxes-2026"
last_updated: "2026-05-01T16:53:21.380Z"
---

## Illinois vs Texas Taxes 2026: Complete Comparison + Savings Calculator

Chicago to Austin. Chicago to Dallas. It's one of the biggest migration patterns in America, driven largely by corporate relocations (Boeing, Caterpillar, Citadel) and remote work opportunities.

**Key Fact:** An Illinois resident earning $100,000 pays **$4,950 in state income tax**. A Texas resident pays **$0**. Add Chicago's sky-high property taxes, and the difference becomes enormous.

## Quick Comparison Table

<table>
<thead>
  <tr>
    <th>
      Tax Category
    </th>
    
    <th>
      Illinois
    </th>
    
    <th>
      Texas
    </th>
    
    <th>
      Winner
    </th>
  </tr>
</thead>

<tbody>
  <tr>
    <td>
      <strong>
        State Income Tax
      </strong>
    </td>
    
    <td>
      4.95% (flat)
    </td>
    
    <td>
      <strong>
        0%
      </strong>
    </td>
    
    <td>
      ⭐ <strong>
        Texas
      </strong>
    </td>
  </tr>
  
  <tr>
    <td>
      <strong>
        Chicago Income Tax
      </strong>
    </td>
    
    <td>
      None
    </td>
    
    <td>
      N/A
    </td>
    
    <td>
      ⭐ <strong>
        Tie
      </strong>
    </td>
  </tr>
  
  <tr>
    <td>
      <strong>
        Sales Tax (State)
      </strong>
    </td>
    
    <td>
      6.25%
    </td>
    
    <td>
      6.25%
    </td>
    
    <td>
      ⭐ <strong>
        Tie
      </strong>
    </td>
  </tr>
  
  <tr>
    <td>
      <strong>
        Sales Tax (Chicago)
      </strong>
    </td>
    
    <td>
      10.25%
    </td>
    
    <td>
      8.25% (Dallas/Austin)
    </td>
    
    <td>
      ⭐ <strong>
        Texas
      </strong>
    </td>
  </tr>
  
  <tr>
    <td>
      <strong>
        Property Tax (Avg)
      </strong>
    </td>
    
    <td>
      2.08% (#2 highest!)
    </td>
    
    <td>
      1.60%
    </td>
    
    <td>
      ⭐ <strong>
        Texas
      </strong>
    </td>
  </tr>
  
  <tr>
    <td>
      <strong>
        Total Tax Burden
      </strong>
    </td>
    
    <td>
      11.0%
    </td>
    
    <td>
      8.6%
    </td>
    
    <td>
      ⭐ <strong>
        Texas
      </strong>
    </td>
  </tr>
  
  <tr>
    <td>
      <strong>
        Estate Tax
      </strong>
    </td>
    
    <td>
      Yes ($4M exemption)
    </td>
    
    <td>
      None
    </td>
    
    <td>
      ⭐ <strong>
        Texas
      </strong>
    </td>
  </tr>
</tbody>
</table>

**Bottom Line:** Texas wins on income tax, property tax, and estate tax. Illinois wins on... nothing tax-related.

<federal-tax-bracket-calculator>



</federal-tax-bracket-calculator>

## Income Tax: Simple Math, Big Difference

### Illinois Income Tax 2026

Illinois has a **flat 4.95% tax** on all income. Simple, but not cheap.

**Everyone pays 4.95%:**

- $50,000 income = **$2,475** tax
- $100,000 income = **$4,950** tax
- $200,000 income = **$9,900** tax
- $500,000 income = **$24,750** tax

**No brackets. No preferences. Just 4.95% on everything:**

- Wages
- Business income
- Capital gains
- Dividends
- Interest
- Retirement income (pension/IRA/401k)

**The only "progressive" element:** $2,775 personal exemption per person (barely makes a dent)

### Texas Income Tax 2026

**NO STATE INCOME TAX**

$0 on all income, forever.

### Income Tax Savings: IL → TX

<table>
<thead>
  <tr>
    <th>
      Income
    </th>
    
    <th>
      IL Tax (4.95%)
    </th>
    
    <th>
      TX Tax
    </th>
    
    <th>
      <strong>
        Annual Savings
      </strong>
    </th>
  </tr>
</thead>

<tbody>
  <tr>
    <td>
      $50K
    </td>
    
    <td>
      $2,475
    </td>
    
    <td>
      $0
    </td>
    
    <td>
      <strong>
        $2,475
      </strong>
    </td>
  </tr>
  
  <tr>
    <td>
      $75K
    </td>
    
    <td>
      $3,713
    </td>
    
    <td>
      $0
    </td>
    
    <td>
      <strong>
        $3,713
      </strong>
    </td>
  </tr>
  
  <tr>
    <td>
      $100K
    </td>
    
    <td>
      $4,950
    </td>
    
    <td>
      $0
    </td>
    
    <td>
      <strong>
        $4,950
      </strong>
    </td>
  </tr>
  
  <tr>
    <td>
      $150K
    </td>
    
    <td>
      $7,425
    </td>
    
    <td>
      $0
    </td>
    
    <td>
      <strong>
        $7,425
      </strong>
    </td>
  </tr>
  
  <tr>
    <td>
      $200K
    </td>
    
    <td>
      $9,900
    </td>
    
    <td>
      $0
    </td>
    
    <td>
      <strong>
        $9,900
      </strong>
    </td>
  </tr>
  
  <tr>
    <td>
      $300K
    </td>
    
    <td>
      $14,850
    </td>
    
    <td>
      $0
    </td>
    
    <td>
      <strong>
        $14,850
      </strong>
    </td>
  </tr>
  
  <tr>
    <td>
      $500K
    </td>
    
    <td>
      $24,750
    </td>
    
    <td>
      $0
    </td>
    
    <td>
      <strong>
        $24,750
      </strong>
    </td>
  </tr>
</tbody>
</table>

**Career Savings (30 years @ $150K):**

- **$222,750** in tax savings
- **$828,000** if invested at 7% annually

<standard-deduction-calculator>



</standard-deduction-calculator>

## Property Tax: The Hidden Killer

This is where Illinois REALLY hurts.

### Illinois Property Tax 2026

**Average Effective Rate:** 2.08% (#2 highest in USA, after New Jersey)

**Chicago Area Rates:**

- **Cook County (Chicago):** 2.0% - 2.3%
- **Will County:** 2.2% - 2.5%
- **DuPage County:** 2.0% - 2.2%
- **Lake County:** 2.1% - 2.4%

**Real Examples:**

- $400,000 Chicago home: **~$9,200/year**
- $600,000 home: **~$13,800/year**
- $800,000 home: **~$18,400/year**

**Plus:** Assessments rise regularly, no Prop 13-style protections

### Texas Property Tax 2026

**Average Effective Rate:** 1.60%

**Major Cities:**

- **Austin:** ~1.8%
- **Dallas:** ~1.9%
- **Houston:** ~2.0%
- **San Antonio:** ~2.1%

**Homestead Exemption:** $100,000 reduction for school taxes<br />

**10% Annual Cap:** Increases limited to 10%/year with homestead

**Real Examples:**

- $400,000 home: **~$7,200/year** (after homestead)
- $600,000 home: **~$10,800/year**
- $800,000 home: **~$14,400/year**

### Property Tax Comparison

<table>
<thead>
  <tr>
    <th>
      Home Value
    </th>
    
    <th>
      IL (Chicago)
    </th>
    
    <th>
      TX (Austin)
    </th>
    
    <th>
      <strong>
        Savings in TX
      </strong>
    </th>
  </tr>
</thead>

<tbody>
  <tr>
    <td>
      $400K
    </td>
    
    <td>
      $9,200
    </td>
    
    <td>
      $7,200
    </td>
    
    <td>
      <strong>
        $2,000
      </strong>
    </td>
  </tr>
  
  <tr>
    <td>
      $600K
    </td>
    
    <td>
      $13,800
    </td>
    
    <td>
      $10,800
    </td>
    
    <td>
      <strong>
        $3,000
      </strong>
    </td>
  </tr>
  
  <tr>
    <td>
      $800K
    </td>
    
    <td>
      $18,400
    </td>
    
    <td>
      $14,400
    </td>
    
    <td>
      <strong>
        $4,000
      </strong>
    </td>
  </tr>
</tbody>
</table>

**Plus:** Equivalent homes cost 30-50% less in TX vs Chicago

## Sales Tax: Chicago is Brutal

### Illinois Sales Tax

- **State:** 6.25%
- **Chicago Total:** 10.25% (one of highest in nation!)

  - State: 6.25%
  - County: 1.75%
  - City: 1.25%
  - Transit: 1%

**Restaurant tax in Chicago:** Additional 0.5% = **10.75% total**

**What's taxed:** Most goods, some services<br />

**What's not:** Groceries (1% only), prescription drugs

### Texas Sales Tax

- **State:** 6.25%
- **Austin/Dallas/Houston:** 8.25%

  - State: 6.25%
  - Local: 2.0%

**What's taxed:** Most goods, some services<br />

**What's not:** Groceries, prescription drugs, OTC drugs

### Sales Tax Impact

**$40,000 annual taxable spending:**

- Chicago: **$4,100** in sales tax
- Austin: **$3,300** in sales tax
- **Savings: $800/year in TX**

<tax-withholding-calculator>



</tax-withholding-calculator>

## Real-World Scenarios

### Scenario 1: Single Professional (Chicago → Austin)

**Income:** $120,000<br />

**Rents apartment**<br />

**Spending:** $40,000 taxable

**Chicago Total:**

- Income tax: $5,940
- Sales tax: $4,100
- **Total: $10,040**

**Austin Total:**

- Income tax: $0
- Sales tax: $3,300
- **Total: $3,300**

**Savings: $6,740/year** 🎉

### Scenario 2: Family (Chicago Suburbs → Dallas)

**Income:** $200,000 (married)<br />

**$650,000 home**<br />

**2 kids**<br />

**Spending:** $55,000 taxable

**Chicago Suburbs Total:**

- Income tax: $9,900
- Sales tax: $4,950
- Property tax: $14,950
- **Total: $29,800**

**Dallas Total:**

- Income tax: $0
- Sales tax: $4,538
- Property tax: $12,350
- **Total: $16,888**

**Savings: $12,912/year** 🎉

<child-tax-credit-calculator>



</child-tax-credit-calculator>

### Scenario 3: Business Owner (Chicago → Houston)

**Income:** $350,000<br />

**$800,000 home**<br />

**Spending:** $70,000 taxable

**Chicago Total:**

- Income tax: $17,325
- Sales tax: $7,175
- Property tax: $18,400
- **Total: $42,900**

**Houston Total:**

- Income tax: $0
- Sales tax: $5,775
- Property tax: $16,000
- **Total: $21,775**

**Savings: $21,125/year** 🎉

<qbi-deduction-calculator>



</qbi-deduction-calculator>

### Scenario 4: Retiree (Chicago → San Antonio)

**Income:** $80,000 (pension + investments)<br />

**$500,000 paid-off home**<br />

**Spending:** $35,000 taxable

**Chicago Total:**

- Income tax: $3,960
- Sales tax: $3,588
- Property tax: $11,500
- **Total: $19,048**

**San Antonio Total:**

- Income tax: $0
- Sales tax: $2,888
- Property tax: $10,500
- **Total: $13,388**

**Savings: $5,660/year** 🎉

## Which State Wins for You?

### Texas is Better For:

✅ **Everyone earning income** (4.95% → 0%)<br />


✅ **Homeowners** (lower property tax)<br />


✅ **Business owners** (no state corporate tax either)<br />


✅ **Retirees** (no tax on retirement income)<br />


✅ **Those building wealth** (keep more to invest)<br />


✅ **People who like warm weather year-round**

### Illinois is Better For:

✅ **Those whose careers require Chicago** (certain finance, trading, transportation jobs)<br />


✅ **Public transit users** (Chicago's L system excellent)<br />


✅ **Four-season lovers** (real winters, beautiful falls)<br />


✅ **Those with deep Chicago roots**

**Honestly, Texas wins for almost everyone from a tax perspective.**

## Special Considerations

**Corporate Relocations:**
Major companies have moved HQs from Illinois to Texas:

- Boeing (Chicago → Arlington, VA, but many to TX)
- Caterpillar (Peoria → Irving, TX)
- Citadel (Chicago → Miami, but TX also popular)

**Illinois Budget Crisis:**
Illinois has massive pension obligations and budget deficits. **Future tax increases are likely.**

**Texas Concerns:**

- Property taxes keep rising (10% cap per year)
- No state income tax is constitutionally protected
- Strong economy, growing population

**Establishing TX Residency:**

1. Move permanently (183+ days)
2. Get TX driver's license
3. Register vehicles
4. Register to vote
5. Update all addresses
6. File declaration of residency

**Illinois isn't as aggressive as CA/NY** about auditing former residents, but document your move anyway.

## Cost of Living Beyond Taxes

**More Expensive in IL:**

- Property taxes (dramatically)
- Sales tax (Chicago)
- Gas prices
- Heating costs
- Groceries
- State income tax (obviously)

**More Expensive in TX:**

- AC costs (hot summers)
- Car ownership (required most places)
- Home insurance (higher than IL)

**Overall:** Texas is typically 25-35% cheaper than Chicago area for equivalent lifestyle.

## FAQ

**Q: Why does Texas have no income tax?**<br />


Historical oil/gas revenue, constitutional prohibition, and culture of limited government. Property/sales taxes fund government instead.

**Q: Will Texas ever add income tax?**<br />


Extremely unlikely. Would require constitutional amendment approved by voters. Texans fiercely oppose it.

**Q: What about Chicago's pension crisis?**<br />


Real concern. Property taxes keep rising to fund pensions. More increases likely, making TX even more attractive.

**Q: Is Austin getting too expensive?**<br />


Yes, home prices have skyrocketed. But still cheaper than Chicago, and you save massively on income tax.

**Q: What about Texas' power grid issues?**<br />


Valid concern after 2021 freeze. However, most of the time it's fine. Modern problem for modern infrastructure.

**Q: How does weather compare?**

- **Illinois:** Cold winters (-20°F possible), hot humid summers (90s)
- **Texas:** Mild winters (40s-50s), very hot summers (100°F+)
- TX wins if you hate snow; IL wins if you hate extreme heat

## Conclusion

**For virtually everyone, Texas offers better tax treatment** than Illinois—saving $5,000-$25,000+ annually for most households.

**A Chicago family earning $200K with a $650K home saves $12,912/year** moving to Dallas. Over 30 years: **$387,360** (or **$1.4 million invested at 7%**).

Illinois offers great culture, four seasons, and Chicago's world-class city experience. But the tax burden is heavy and likely to get heavier.

### Calculate Your Exact Savings:

<federal-tax-bracket-calculator>



</federal-tax-bracket-calculator>

<standard-deduction-calculator>



</standard-deduction-calculator>

<tax-withholding-calculator>



</tax-withholding-calculator>

<eitc-calculator>



</eitc-calculator>

<amt-calculator>



</amt-calculator>

---

**Last Updated:** January 2, 2026 | **Tax Year:** 2026