Illinois taxes capital gains at 4.95%. Combined with federal taxes, your effective rate on a home sale could reach 23.8%.
IL State Rate
4.95%
Flat tax rate
Federal Rate
15%
Most common long-term bracket
Combined Effective
23.8%
On $150K taxable gain (example)
After the $250K/$500K exclusion, here's what a typical seller might owe.
If Illinois is where your primary residence is located and you've lived there at least 2 of the last 5 years, you can exclude up to $250K (single) or $500K (married filing jointly) of your capital gain from both federal and state taxes.
Investment and rental properties in Illinois don't qualify for the exclusion. You'll owe 4.95% state tax plus federal tax on the full gain, plus 25% depreciation recapture on any depreciation claimed.
In Illinois, homes sold in May sell for 22% more than those sold in December (-25%). Timing your sale right can offset a significant portion of your tax bill.