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HEAD-TO-HEAD TAX COMPARISON · 2026

COUNTRY A Illinois VS COUNTRY B Maryland

Side-by-side analysis of income tax, effective rates, and take-home pay for Illinois and Maryland in 2026.

Daniel · CountryTaxCalc Updated August 2026 Tax Comparison 2026
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OVERVIEW
Illinois's flat 4.95% income tax — despite being the highest flat rate of any US state — is now cheaper than Maryland's combined state-plus-county tax at every income level tested, now that the free calculator blends Maryland's county tax (a representative 3.2% rate, the rate charged by Maryland's most populous counties; real range 2.25%-3.3%) directly into its state brackets. At $100,000 income, Illinois's $4,805 state tax bill is $2,699/year lower than Maryland's $7,504, and the gap widens to $8,239/year at $250,000 and $18,230/year at $500,000. Property tax tells a different story: Maryland's average effective rate of roughly 0.92% is well below Illinois's roughly 1.88% (tied for the highest in the nation with New Jersey), so at $100,000 income with a $400,000 home, Illinois's higher property tax bill ($7,520 vs Maryland's $3,680, a $3,840/year gap) actually outweighs its income-tax advantage — keeping Maryland the cheaper state overall at that income level, by about $1,141/year. Illinois pulls ahead on the combined basis too above roughly $131,000-$135,000 income. Neither state's local tax is optional in the way Pennsylvania's Philadelphia wage tax is — Illinois has none at all, while Maryland's county tax applies to literally every resident regardless of where they live in the state. On retirement income, Illinois is dramatically more generous: it fully exempts Social Security, pensions, 401(k), and IRA withdrawals with no exceptions, while Maryland only exempts Social Security below a $50,000 income threshold and taxes other retirement income in full beyond a $34,300 deduction for filers 65+.
Section 01

The Big Picture

Top-line rates and effective take-home for a typical earner — including income tax, social contributions, and applicable surcharges.

🌽
COUNTRY A
Illinois
TAX RATE
4.95%
Flat Tax

Flat 4.95% rate on all income — the highest flat-tax rate of any US state; no local income tax anywhere

🦀
COUNTRY B
Maryland
TAX RATE
2-6.5%
10-Bracket Progressive + Mandatory County Tax

10 state brackets (2-6.5%) plus a mandatory county income tax (2.25-3.3%) that every resident must pay

TYPICAL ANNUAL DIFFERENCE
Moving from Maryland → Illinois at $100,000
$1,141

Combined income tax + property tax at $100K income with a $400K home, favoring Maryland. On income tax alone, Illinois is now cheaper than Maryland at every income level shown ($4,805 vs $7,504 at $100K, a $2,699/year advantage for Illinois) — the reverse of the prior 'Maryland wins at low incomes' finding, now that Maryland's calculator blends in a representative 3.2% county tax. But Illinois's much higher property tax rate (1.88% vs Maryland's 0.92%) more than offsets that at $100K income on a $400K home, keeping Maryland the cheaper state overall at that income level by about $1,141/year. Illinois becomes cheaper on the combined basis too above roughly $131,000-$135,000 income (see incomeTable for pure income-tax figures at every level).

Section 02

Tax Savings by Income Level

Net take-home after all income tax, social contributions, and surcharges — for a single employee with no dependents.

GROSS INCOME
🌽 IL TAX
🦀 MD TAX
SAVINGS
10-YEAR
$50,000
$2,330
$3,402
$1,072
$10,720
$75,000
$3,568
$5,389
$1,821
$18,210
$100,000
$4,805
$7,504
$2,699
$26,990
$150,000
$7,280
$11,777
$4,497
$44,970
$250,000
$12,230
$20,469
$8,239
$82,390
$500,000
$24,605
$42,835
$18,230
$182,300
💡

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🌽

Illinois Pros & Cons

+ PROS
  • Flat 4.95% state income tax beats Maryland's combined state-plus-county system at every income level shown — saving $1,072 to $18,230/year
  • Full retirement-income exemption: Social Security, pensions, 401(k), and IRA withdrawals are all completely tax-free, with no income threshold
  • No local income tax anywhere — unlike Maryland, where every resident owes a mandatory county tax on top of the state rate
  • Chicago offers one of the deepest job markets in the Midwest across finance, tech, manufacturing, and healthcare
− CONS
  • Average property tax (~1.88%) is tied for the highest in the nation with New Jersey, well above Maryland's ~0.92%
  • Illinois's flat 4.95% is the highest flat-tax rate of any US state, even though it still beats Maryland's income tax at every level shown
  • Illinois has a state estate tax on estates over $4 million — Maryland's estate/inheritance rules differ and should be checked directly with a CPA
  • $139 billion in unfunded pension liabilities creates ongoing fiscal pressure that could push rates higher in the future
🦀

Maryland Pros & Cons

+ PROS
  • Lower average property tax (~0.92%) than Illinois (~1.88%), which more than offsets Maryland's higher income tax at $100K income for homeowners — keeping Maryland cheaper overall at that income level despite Illinois's lower income tax rate
  • Social Security is fully exempt for residents with total Maryland AGI under $50,000, and filers 65+ get a $34,300 deduction on other retirement income
  • Deep federal, biotech, and defense-contractor job market anchored by NIH, Johns Hopkins, and DC-suburb agencies
  • Montgomery County schools rank among the top 20 nationally, a draw for families willing to pay the higher combined tax rate
− CONS
  • Every resident pays a mandatory county tax (2.25-3.3%, calculator uses a representative 3.2%) on top of the state rate — blended into the state return, no opt-out
  • Combined state-plus-county tax now costs $1,072 to $18,230/year more than Illinois's flat 4.95% at every income level shown — though Maryland's much lower property tax rate keeps it cheaper overall at $100K income on a typical home
  • Social Security becomes fully taxable once total Maryland AGI exceeds $50,000, unlike Illinois's unconditional exemption
  • Pensions, 401(k), and IRA withdrawals are taxable beyond the $34,300 age-65+ deduction, far less generous than Illinois's full exemption
FAQ

Frequently Asked Questions

Is Illinois or Maryland cheaper for state income tax?

On pure income tax, Illinois is now cheaper at every income level shown: at $100,000, Illinois's flat 4.95% costs $4,805 versus Maryland's combined state-plus-county tax at $7,504 — Illinois is $2,699/year lower, growing to $18,230/year at $500,000. But Maryland's much lower property tax rate reverses that at $100,000 income once you own a typical $400,000 home — see the next question.

What is Maryland's county tax and why can't I avoid it?

All 23 Maryland counties plus Baltimore City levy a mandatory local income tax on top of the state's 2-6.5% rate. Unlike most states where local income tax is optional or limited to certain cities, every Maryland resident pays county tax based on where they live on December 31 — there's no county in the state that charges $0. Real rates range from 2.25% (Worcester, the lowest) to 3.3% (Dorchester and Kent, the highest); the free calculator blends a representative 3.2% rate — the rate charged by Maryland's most populous counties, including Montgomery and Baltimore City — directly into the state's tax brackets.

Which state has lower property tax, Illinois or Maryland?

Maryland has the lower average effective property tax rate at roughly 0.92%, compared to Illinois's roughly 1.88% — tied for the highest in the nation with New Jersey. On a $400,000 home, that's about $3,680/year in Maryland versus $7,520/year in Illinois, a savings of about $3,840/year that more than offsets Illinois's income-tax advantage at $100,000 income — which is why Maryland is still cheaper overall for a $100K earner with a $400K home despite Illinois's lower income tax rate.

So which state wins on combined income plus property tax?

Maryland wins at $100,000 income on the combined basis, but not on income tax alone anymore: Illinois's total (about $4,805 income + $7,520 property = $12,325 on a $400,000 home) versus Maryland's (about $7,504 income + $3,680 property = $11,184) — Maryland comes out about $1,141/year cheaper overall, purely because its much lower property tax rate outweighs Illinois's income-tax advantage at this income level. Illinois wins on income tax alone at every level shown, and overtakes Maryland on the combined basis too above roughly $131,000-$135,000 income.

Does either state tax retirement income like Social Security or 401(k) withdrawals?

Illinois fully exempts all retirement income — Social Security, pensions, 401(k), and IRA withdrawals — with no income limit. Maryland is far less generous: Social Security is only exempt if total Maryland AGI is under $50,000, and other retirement income gets just a $34,300 deduction for filers 65+ before the remainder is taxed at Maryland's combined state-plus-county rates. Illinois is one of the most retirement-friendly states in the country on this measure.

How much would I save moving from Maryland to Illinois?

At $100,000 income, moving from Maryland to Illinois would save about $2,699/year on income tax alone — Illinois is now the cheaper state on income tax at every level shown. At $500,000, that income-tax savings grows to about $18,230/year. But Illinois's much higher property tax (~1.88% vs Maryland's ~0.92%) can outweigh the income-tax savings for homeowners at lower incomes: on a $400,000 home at $100,000 income, Maryland is still about $1,141/year cheaper overall once property tax is included.

Why is Illinois's tax considered high despite being cheaper than Maryland here?

Illinois's flat 4.95% is genuinely the highest flat-tax rate among all US states, and its property tax is tied for the nation's highest. It now comes out ahead of Maryland on income tax at every level shown, since Maryland's calculator blends a representative 3.2% county tax into its state brackets. But Illinois's very high property tax rate can still make Maryland the cheaper state overall for homeowners at lower incomes, once property tax is factored in.

Does living in a specific Maryland county change this comparison?

Yes. This comparison uses the calculator's representative 3.2% county rate — the rate charged by Maryland's most populous counties, including Montgomery and Prince George's. Residents of low-tax counties like Worcester (2.25%) pay somewhat less than the figures shown, while residents of the highest-rate counties (Dorchester and Kent, 3.3%) pay somewhat more. Illinois has no local income tax variation to consider since none exists statewide.
From the brief
NL27%new 2027 rate, down from 30%
DK65.4kkr/mo threshold, cut from 78k
MT1940snon-dom regime unchanged since
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