Illinois vs. Indiana Take-Home Pay 2026: The Chicago-Exodus Guide
Illinois vs. Indiana: 2026 Take-Home Pay Guide
Analyzing the cost of the Chicago-to-Indy migration.
1. The Flat Tax Duel: 4.95% vs. 2.9%
Both Illinois and Indiana utilize a flat tax system, but the rates have diverged significantly by 2026. **Illinois** maintains a flat **4.95%** income tax. **Indiana**, following several years of scheduled tax cuts, now sits at a highly competitive **2.9%** (plus local county taxes).
While the difference seems small, it represents a nearly 40% lower state tax burden for Indiana residents compared to their neighbors in Illinois.
2. $85,000 Salary Breakdown: IL vs. IN
| Deduction | Illinois Resident | Indiana Resident |
|---|---|---|
| Gross Salary | $85,000 | $85,000 |
| Federal Tax | ~$10,800 | ~$10,800 |
| State Income Tax | $4,207 | $2,465* |
| Annual Take-Home | $62,493 | $64,235 |
*Indiana figure assumes an average county tax of 1.5%.
3. The 1% Property Tax Cap in Indiana
Perhaps the biggest “hidden” savings in Indiana is the constitutional 1% cap on property taxes for homesteads. While Illinois (specifically Cook and Lake Counties) has some of the highest property tax rates in the nation, Indiana homeowners are legally protected from rates exceeding 1% of their home’s gross assessed value.
Moving to the Crossroads of America?
Calculate your specific take-home pay with our 2026 Illinois vs. Indiana Calculator.