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HEAD-TO-HEAD TAX COMPARISON · 2026

COUNTRY A Illinois VS COUNTRY B South Carolina

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

Daniel · CountryTaxCalc Updated August 2026 Income tax verified October 2026 Tax Comparison 2026
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OVERVIEW
South Carolina beats Illinois on income tax through $250,000 income, and on property tax at every income level. At $100,000, South Carolina's $4,244 state income tax is $561/year lower than Illinois's $4,805 — a gap driven mostly by South Carolina's low 1.99% rate on its first $30,000 and its $966 subtraction rather than a lower top rate (SC's 5.21% top rate is higher than Illinois's 4.95% flat rate, so the income-tax gap narrows sharply as income rises, from $1,330/year at $50,000 down to just $171/year at $250,000 — and reverses at $500,000, where Illinois's flat rate finally wins out by $334/year). The bigger story is property tax: Illinois averages 1.88%, tied with New Jersey for the highest in the nation, while South Carolina averages just 0.49%, among the lowest. On a $400,000 home, that's roughly $7,520/year in Illinois property tax versus about $1,960/year in South Carolina — a $5,560/year difference that dwarfs the income-tax gap for homeowners. Illinois is genuinely retirement-friendly on the income-tax side (no state tax on Social Security, pensions, or 401(k)/IRA withdrawals), but its sky-high property tax offsets much of that advantage for homeowning retirees. South Carolina exempts Social Security entirely and fully deducts military retirement income, plus a low cost of living that appeals to relocating retirees and remote workers alike.
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% state rate on all taxable income — the highest flat-tax rate in the US; no local income tax anywhere in the state

🌴
COUNTRY B
South Carolina
TAX RATE
1.99% / 5.21%
Near-Flat (2 Brackets)

1.99% under $30,000, then 5.21% minus $966 above, with a $15,000 SCIAD deduction phasing out between $40,000 and $95,000 AGI — reformed from a 3-bracket system that topped out at 6%

TYPICAL ANNUAL DIFFERENCE
Moving from South Carolina → Illinois at $100,000
$561

That's $47/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
🌴 SC TAX
SAVINGS
10-YEAR
$50,000
$2,330
$1,000
SC saves $1,330
$13,300
$75,000
$3,568
$2,657
SC saves $911
$9,110
$100,000
$4,805
$4,244
SC saves $561
$5,610
$150,000
$7,280
$6,849
SC saves $431
$4,310
$250,000
$12,230
$12,059
SC saves $171
$1,710
$500,000
$24,750
$25,084
IL saves $334
-$3,340
💡

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🌆

Illinois Pros & Cons

+ PROS
  • No state tax on any retirement income — Social Security, pensions, and 401(k)/IRA withdrawals are all fully exempt, more generous than South Carolina's Social Security-only exemption
  • Deep, high-paying job market in Chicago spanning finance, tech, professional services, and logistics that South Carolina's smaller metros can't match
  • No local income tax anywhere in the state, keeping the income-tax picture simple statewide
  • World-class culture, food, architecture, and transit in Chicago for those who value dense urban living
− CONS
  • The flat 4.95% state income tax costs $171 to $1,330/year more than South Carolina up to $250,000 income — though at $500,000 Illinois actually becomes the cheaper of the two, by $334/year, since SC's top rate (5.21%) is higher than Illinois's flat 4.95%
  • Property tax averages 1.88%, tied with New Jersey for the highest in the nation — on a $400,000 home, that's about $7,520/year versus roughly $1,960/year in South Carolina
  • $139 billion in unfunded pension liabilities creates ongoing fiscal uncertainty and pressure for future tax increases
  • Combined income and property tax burden is among the highest in the US, a major driver of the state's ongoing outmigration
🌴

South Carolina Pros & Cons

+ PROS
  • Lower income tax up to $250,000 income — $171 to $1,330/year cheaper than Illinois, thanks to a low 1.99% rate on the first $30,000 and a $15,000 SCIAD deduction for lower earners (though Illinois's flat rate pulls narrowly ahead at $500,000+)
  • Property tax averages just 0.49%, among the lowest in the nation — roughly $5,560/year cheaper than Illinois on a $400,000 home
  • No tax on Social Security benefits, plus a full deduction for military retirement income and a $50,000 homestead exemption for homeowners 65+, disabled or blind
  • Lower overall cost of living than Illinois, with a growing coastal and Upstate job market in manufacturing, logistics, and tech
− CONS
  • Retirement income beyond Social Security and the military deduction (regular pensions, 401(k), IRA withdrawals) is generally taxed as ordinary income, unlike Illinois's blanket retirement-income exemption
  • Smaller and less diversified job market than Chicago, with fewer finance, big-tech, and corporate-headquarters opportunities
  • Hurricane risk along the coast adds insurance costs that can offset some of the property-tax savings for coastal buyers
  • The 2026 tax reform is recent, so future legislative changes to the new 2-bracket structure are somewhat less battle-tested than Illinois's long-standing flat tax
FAQ

Frequently Asked Questions

Is Illinois or South Carolina cheaper for state income tax?

South Carolina is cheaper through $250,000 income, but Illinois actually pulls ahead at $500,000. At $100,000, South Carolina's $4,244 state tax is $561/year less than Illinois's $4,805. The gap narrows sharply as income rises — from $1,330/year at $50,000 to just $171/year at $250,000 — and reverses at $500,000, where Illinois's flat 4.95% costs $334/year less than South Carolina's 5.21% top rate, because South Carolina's low-rate bracket and SCIAD deduction matter less at higher incomes.

Which state has lower property tax, Illinois or South Carolina?

South Carolina, by a wide margin. Illinois averages 1.88% effective property tax, tied with New Jersey for the highest in the nation. South Carolina averages just 0.49%, among the lowest. On a $400,000 home, that's about $7,520/year in Illinois versus roughly $1,960/year in South Carolina — a $5,560/year difference.

Does either state tax Social Security or retirement income?

Neither taxes Social Security. Illinois goes further, exempting all retirement income including pensions and 401(k)/IRA withdrawals. South Carolina exempts Social Security and fully deducts military retirement income, but other pension and retirement-account income is generally taxed as ordinary income at the state's rates (SC also offers age-based retirement deductions).

How much would I save moving from Illinois to South Carolina?

At $100,000 income, moving from Illinois to South Carolina would save about $561/year in state income tax. Add property tax savings on a typical home — roughly $5,560/year on a $400,000 house — and total annual savings come to around $6,100/year for a homeowner, before accounting for South Carolina's generally lower cost of living.

Why does Illinois have such high property taxes?

Illinois's property tax burden stems largely from local government funding structures and roughly $139 billion in unfunded public pension liabilities, which push school districts and municipalities to rely heavily on property tax revenue. This has kept Illinois's average effective rate at 1.88%, tied with New Jersey for the highest in the country.

Is South Carolina a good state to retire in compared to Illinois?

For most retirees, yes. South Carolina combines no Social Security tax, a full military retirement deduction, a $50,000 homestead exemption for homeowners 65+, and property tax averaging just 0.49% with a lower overall cost of living. Illinois offers a broader retirement-income exemption on paper, but its 1.88% average property tax often outweighs that benefit for homeowners.

Does Illinois or South Carolina have a better job market?

Illinois has the deeper, higher-paying job market overall, anchored by Chicago's finance, technology, professional-services, and logistics sectors. South Carolina's job market is smaller but growing, with strengths in manufacturing (including automotive and aerospace), logistics around the Port of Charleston, and an expanding tech presence in Charleston and Greenville.

How did South Carolina's 2026 tax reform change the comparison with Illinois?

South Carolina replaced its old 3-bracket system (0% to 6%) with just two brackets: 1.99% under $30,000, then 5.21% (minus $966) above, plus a $15,000 SCIAD deduction that phases out between $40,000 and $95,000 AGI. Under the old system, South Carolina was less competitive with Illinois at many income levels; the reform widened South Carolina's advantage, especially for middle-income earners who previously paid close to the 6% top rate on most of their income.
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