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HEAD-TO-HEAD TAX COMPARISON · 2026

COUNTRY A Illinois VS COUNTRY B Virginia

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

Daniel · CountryTaxCalc Updated August 2026 Tax Comparison 2026
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OVERVIEW
Illinois and Virginia split the tax advantage in opposite directions. On income tax alone, Illinois's flat 4.95% narrowly beats Virginia, whose top 5.75% rate kicks in on income over just $17,000 — at $100,000, Illinois residents pay $4,153 versus Virginia's $4,567, a $414/year edge for Illinois. But property tax flips the outcome decisively: Virginia averages just 0.84%, while Illinois is tied for the highest property tax in the nation at 1.88%. On a $400,000 home, that's $3,360/year in Virginia versus $7,520/year in Illinois — a $4,160/year gap that swamps Illinois's income tax edge. Combined, a $100,000 earner with a $400,000 home saves $3,746/year by choosing Virginia. Virginia also offers a major perk for veterans: up to $40,000 of military retirement pay is fully exempt from state tax, on top of Social Security being untaxed in both states.
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 (highest flat tax in the US)
🏛️
COUNTRY B
Virginia
TAX RATE
2-5.75%
Progressive
4 brackets — top 5.75% rate starts at just $17,000
TYPICAL ANNUAL DIFFERENCE
Moving from Virginia → Illinois at $100,000
$414
That's $35/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
🏛️ VA TAX
SAVINGS
10-YEAR
$50,000
$1,678
$1,692
IL saves $14
$140
$75,000
$2,916
$3,129
IL saves $213
$2,130
$100,000
$4,153
$4,567
IL saves $414
$4,140
$150,000
$6,628
$7,442
IL saves $814
$8,140
$250,000
$11,578
$13,192
IL saves $1,614
$16,140
$500,000
$23,952
$27,567
IL saves $3,615
$36,150
💡

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🌽

Illinois Pros & Cons

+ PROS
  • Slightly lower income tax than Virginia at every income level tested, up to $3,615/year at $500K
  • Chicago job market: strong finance, manufacturing, and healthcare base
  • Illinois doesn't tax retirement income at all — Social Security, pensions, and 401(k)/IRA withdrawals are exempt
  • No local income tax anywhere in the state
− CONS
  • Tied for the highest average property tax in the US (1.88%) — over double Virginia's rate
  • $139 billion in unfunded pension liabilities creates risk of future rate increases
  • Net outmigration of over 122,000 residents in a single recent year
  • Cold winters and a shrinking population base
🏛️

Virginia Pros & Cons

+ PROS
  • Property tax averages just 0.84% — less than half Illinois's 1.88%, saving $4,160/year on a $400K home
  • Up to $40,000 of military retirement pay is fully tax-exempt, a major benefit given Virginia's large veteran population
  • Federal government and defense-contractor jobs (Pentagon, CIA, Amazon HQ2) concentrated in Northern Virginia
  • Age 65+ retirees get an additional $12,000 deduction against all income
− CONS
  • Top 5.75% rate applies to income over just $17,000 — the lowest such threshold in the nation
  • Slightly higher income tax than Illinois at every income level tested
  • Virginia taxes 401(k) and IRA withdrawals at the full 5.75% rate (Illinois exempts them entirely)
  • Northern Virginia housing and Beltway traffic are among the most expensive/congested in the country
FAQ

Frequently Asked Questions

Is Illinois or Virginia cheaper overall?

Virginia wins on total tax burden for homeowners. Illinois has a slightly lower income tax bill ($4,153 vs Virginia's $4,567 at $100K, a $414/year edge), but Illinois is tied for the highest property tax in the US at 1.88% versus Virginia's 0.84%. On a $400,000 home, that's a $4,160/year property tax gap in Virginia's favor — enough to make Virginia $3,746/year cheaper overall for a $100K earner who owns a home.

Why does Virginia's income tax feel high despite a 5.75% top rate that's lower than Illinois in some framings?

Virginia's top 5.75% bracket applies to any income over just $17,000 — one of the lowest thresholds in the country. That means most of a typical earner's income is taxed at 5.75%, not a lower introductory rate. Illinois's flat 4.95% applies to every dollar, which is actually lower than Virginia's effective rate across the incomes tested here, from $1,678 vs $1,692 at $50K up to $23,952 vs $27,567 at $500K.

Does Illinois or Virginia tax retirement income?

Illinois is the clear winner for retirees: Social Security, pensions, and all 401(k)/IRA withdrawals are completely exempt from state tax. Virginia exempts Social Security and offers a $12,000 deduction for those 65+, plus full exemption on up to $40,000 of military retirement pay, but taxes private pensions and 401(k)/IRA withdrawals at the full 5.75% rate. Illinois wins for civilian retirees; Virginia is competitive for military retirees given the $40,000 exemption.

How much do I save on property tax moving from Illinois to Virginia?

On a $400,000 home, Illinois property tax averages $7,520/year (1.88%) versus Virginia's $3,360/year (0.84%) — a savings of $4,160/year. This is the single biggest tax difference between the two states and is large enough to outweigh Illinois's income tax advantage for most homeowners.

Is Northern Virginia worth the higher cost for federal or defense jobs?

For federal employees, defense contractors, or Amazon HQ2 workers, yes — Northern Virginia offers access to the Pentagon, CIA, NSA, and thousands of contractor jobs with salaries often 20-30% above the national average. The tradeoff is Arlington/Fairfax property tax rates closer to 1.0-1.2% (still below Illinois's 1.88%) and median home prices around $650,000, well above Virginia's statewide average.

Should renters choose Illinois or Virginia for lower taxes?

Renters who don't pay property tax directly should focus on income tax, where Illinois is cheaper at every income level tested — by $14/year at $50K up to $3,615/year at $500K. Since renters avoid Virginia's property tax advantage indirectly (it's baked into landlord costs, not usually itemized), Illinois is the marginally better choice for renters specifically.

Is Illinois's flat tax rate at risk of increasing?

Illinois carries $139 billion in unfunded pension liabilities, and many analysts expect pressure toward future rate increases. A 2020 referendum to allow a progressive tax structure was rejected by voters 53.4% to 46.6%, so any future change would likely raise the flat rate for everyone rather than target high earners specifically. Virginia has no comparable structural fiscal crisis driving expected tax increases.
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