Colorado vs Illinois taxes

Where the difference comes from

Both states tax income at one flat rate, and neither has a local income tax on wages. The difference comes from three places.

The rate. Colorado charges 4.4%, Illinois 4.95%.

What the rate applies to. Colorado taxes federal taxable income, so the $16,100 federal standard deduction comes off first. Illinois allows only an exemption of $2,925, so almost the whole salary is taxed. On $75,000 Colorado’s income tax is $2,592 and Illinois’s $3,568, a difference of $976.

The payroll premium. Colorado then takes 0.44% of wages for FAMLI, its paid family and medical leave program: $330 on $75,000. Illinois takes nothing from wages beyond income tax.

Net of all three, a single filer keeps $646 more in Colorado.

A gap that barely moves

Here is the unusual part. On each extra dollar, Colorado takes 4.4% in income tax plus 0.44% for FAMLI, 4.84% in all, which is almost the same as Illinois’s 4.95%. So a raise costs about the same in either state, and the gap stays close to a fixed sum over a wide range of pay: $597 on $30,000, $646 on $75,000, $729 on $150,000.

Colorado’s lead is really the value of its larger deduction, less what FAMLI takes back. For a couple filing jointly the federal deduction doubles, and Colorado’s lead roughly doubles with it: $1,292 on $150,000.

Where it widens

Two things change at higher pay. FAMLI stops at the Social Security wage cap of $184,500, and above it Colorado’s rate on the next dollar falls to 4.4% against Illinois’s 4.95%. And Illinois withdraws its exemption entirely once income passes $250,000 for a single filer, all at once rather than gradually. So the gap grows to $1,127 on $250,000 and $2,647 on $500,000.

What the take-home figure does not count

Illinois does not tax qualified retirement income: Social Security, 401(k) and IRA withdrawals and most pensions are all excluded. Someone comparing the two states for retirement rather than for a job should weigh that; this page models wages only. Colorado’s rate can dip below 4.4% in a year when surplus revenue is refunded, and the small flat occupational privilege taxes in Denver, Aurora and a few other cities are left out. Housing, property and sales taxes are not in these figures.

Questions people ask

Do you take home more in Colorado or Illinois on $75,000?

Colorado, by $646 a year, or $54 a month, for a single filer in 2026. That counts federal tax, Social Security, Medicare, state income tax and every state payroll deduction.

Is the difference the same at every salary?

No, but the same side stays ahead. The gap is $597 a year at $30,000 and $1,127 at $250,000, for a single filer.

Does Chicago or Denver charge a city income tax?

No. No Illinois municipality levies an income tax, Chicago included, and no Colorado city levies one on wages. Denver, Aurora and some other Colorado cities charge a flat occupational privilege tax on people who work there, a few dollars a month, which is not included here.

What is the FAMLI line in the Colorado column?

Colorado's Family and Medical Leave Insurance premium. Employees pay 0.44% of wages for 2026, half of the 0.88% total, on pay up to the Social Security wage cap. Illinois has no state paid leave or disability program funded from wages, so it has no equivalent line.

Could Colorado's rate be lower than 4.4% in a given year?

Yes. Under Colorado's Taxpayer's Bill of Rights, surplus revenue must be refunded, and one way of doing that is a temporary cut to the income tax rate for that year alone. These figures use the statutory 4.4%. Illinois's 4.95% has been unchanged since 2017.

What this comparison covers

Income tax and payroll deductions on wages: federal income tax, Social Security, Medicare, state income tax, every state payroll deduction. It does not compare sales tax, property tax, housing or the cost of living, which can outweigh the difference in take-home pay. Figures assume the standard deduction, no dependents and no pre-tax retirement contributions. See how we calculate.