Chicago, IL Taxes 2025
Complete local tax guide and OBBBA calculator
On This Page
Chicago Tax Overview 2025
Chicago has very high property taxes. The $40K SALT cap provides major relief.
Local Income Tax
0%
City/county rate
Sales Tax
10.25%
State + local
Property Tax
2.09%
Effective rate
Median Home
$285,000
Home value
No Local Income Tax!
Chicago does not impose a local income tax on residents, which means you only pay state income tax (if applicable) and federal taxes.
State Tax Information
Chicago is located in Illinois (4.95% state income tax)
💼 Chicago Local Income Tax
Chicago does not impose a local income tax on residents. Your income tax obligations are limited to state income tax (if applicable in Illinois) and federal income tax.
This is good news for Chicago residents, as it means one less tax to worry about compared to cities that do impose local income taxes.
Total Income Tax Burden in Chicago
🛒 Chicago Sales Tax 2025
The combined sales tax rate in Chicago is 10.25%. This includes both the Illinois sales tax and any local sales taxes.
Sales tax applies to most retail purchases in Chicago. Some items like groceries, prescription medications, and clothing may be exempt or taxed at reduced rates depending on Illinois law.
Sales Tax Breakdown
Sales Tax Examples
| Purchase Amount | Sales Tax | Total |
|---|---|---|
| $50 | $5.13 | $55.13 |
| $100 | $10.25 | $110.25 |
| $500 | $51.25 | $551.25 |
| $1,000 | $102.50 | $1,102.50 |
🏠 Chicago Property Tax 2025
The average effective property tax rate in Chicago is 2.09%. Based on the median home value of $285,000, the typical homeowner pays approximately $5,957 per year in property taxes.
Property taxes fund local services including schools, police, fire departments, roads, and parks. Rates vary by specific location within Chicago based on school district and other taxing authorities.
Estimated Annual Property Tax in Chicago
| Home Value | Annual Tax | Monthly | SALT Deductible? |
|---|---|---|---|
| $200,000 | $4,180 | $348 | ✓ Yes |
| $300,000 | $6,270 | $523 | ✓ Yes |
| $400,000 | $8,360 | $697 | ✓ Yes |
| $500,000 | $10,450 | $871 | ✓ Yes |
| $750,000 | $15,675 | $1,306 | ✓ Yes |
| $1,000,000 | $20,900 | $1,742 | ✓ Yes |
💡 SALT Tip: Under the OBBBA, you can deduct up to $40,000 in state and local taxes (SALT) on your federal return. This includes property taxes, state income taxes, and local income taxes.
💰 Chicago Cost of Living
Housing Costs
Tax Summary
OBBBA Tax Benefits for Chicago Residents
High property taxes make SALT deduction increase extremely valuable.
The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, introduced several federal tax deductions that can significantly reduce your tax burden as a Chicago resident.
Available OBBBA Deductions:
Calculate Your Chicago Tax Savings
Use our free OBBBA calculator to see exactly how much you could save on your 2025 federal taxes as a Chicago resident.
Calculate My SavingsFrequently Asked Questions
What is the sales tax in Chicago?
The combined sales tax rate in Chicago is 10.25%. This includes both state and local sales taxes.
Does Chicago have a local income tax?
Chicago has a local income tax of 0%. This is in addition to any state and federal income taxes.
What is the property tax rate in Chicago?
The average effective property tax rate in Chicago is 2.09%. On a home worth $285,000, you'd pay approximately $5,957 per year.
How do OBBBA deductions benefit Chicago residents?
High property taxes make SALT deduction increase extremely valuable. You can use our free calculator to estimate your total savings from tips, overtime, auto loan interest, SALT, and senior bonus deductions.