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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
Calculate your take-home → See all comparisons →
OVERVIEW
Illinois's flat 4.95% income tax — despite being the highest flat rate of any US state — is still meaningfully cheaper than Maryland's combined state-plus-mandatory-county tax system, because every Maryland resident pays both the state's progressive rate (2-5.75%) and a local county tax (2.25-3.3%) with no way to opt out. At $100,000 income, Illinois's $4,153 state tax bill is $2,213/year lower than Maryland's $6,366, and the gap widens to $7,080/year at $250,000 and $16,289/year at $500,000. Property tax flips the script, though: Maryland's average effective rate of roughly 1.09% is well below Illinois's roughly 1.88% (tied for the highest in the nation with New Jersey), so Maryland homeowners claw back some of the income-tax gap. 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
$2,213
That's $184/month back in your pocket
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
$1,678
$2,541
$863
$8,630
$75,000
$2,916
$4,453
$1,537
$15,370
$100,000
$4,153
$6,366
$2,213
$22,130
$150,000
$6,628
$10,298
$3,670
$36,700
$250,000
$11,578
$18,658
$7,080
$70,800
$500,000
$23,953
$40,242
$16,289
$162,890
💡

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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 — saving $863 to $16,289/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 ~1.09%
  • Illinois's flat 4.95% is the highest flat-tax rate of any US state, even though it still beats Maryland's combined burden
  • 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 (~1.09%) than Illinois (~1.88%), which offsets part of Maryland's higher income tax burden for homeowners
  • 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%) on top of the state rate — there's no way to avoid it by choosing where you live within Maryland
  • Combined state-plus-county tax costs $863 to $16,289/year more than Illinois's flat 4.95% at every income level shown
  • 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?

Illinois is cheaper at every income level. At $100,000, Illinois's flat 4.95% costs $4,153 versus Maryland's combined state-plus-county tax at $6,366 — a $2,213/year difference. At $500,000, the gap grows to $16,289/year. Maryland's burden is higher because every resident pays both the state's progressive rate and a mandatory county tax with no opt-out.

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 (2.25-3.3%) on top of the state's 2-5.75% 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. Rates range from Somerset County's 2.25% to Montgomery County and Baltimore City's 3.3%.

Which state has lower property tax, Illinois or Maryland?

Maryland has the lower average effective property tax rate at roughly 1.09%, 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 $4,360/year in Maryland versus $7,520/year in Illinois, a savings of about $3,160/year that meaningfully offsets Maryland's higher income tax.

So which state wins on combined income plus property tax?

Illinois still wins at $100,000 income even after accounting for property tax: Illinois's total (about $4,153 income + $7,520 property = $11,673 on a $400,000 home) versus Maryland's (about $6,366 income + $4,360 property = $10,726) — Maryland actually comes out about $947/year cheaper once property tax is included, despite its higher income tax, because Illinois's property tax burden is so much larger.

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 could save about $2,213/year in state and local income tax. At $250,000 income, the savings grow to about $7,080/year. Keep in mind Illinois's higher property tax (~1.88% vs Maryland's ~1.09%) will offset some of that savings for homeowners, depending on home value.

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 only comes out ahead of Maryland in this comparison because Maryland stacks a mandatory county tax (2.25-3.3%) on top of its own progressive state brackets, pushing Maryland's combined rate higher than Illinois's flat rate at every income level shown.

Does living in a specific Maryland county change this comparison?

Yes. This comparison uses Maryland's average county rate (2.9%). Residents of low-tax counties like Somerset (2.25%) pay somewhat less than the figures shown, narrowing Illinois's advantage slightly, while residents of Montgomery County or Baltimore City (3.3%) pay more, widening it. Illinois has no local income tax variation to consider since none exists statewide.
From the brief
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MT1940snon-dom regime unchanged since
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