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HEAD-TO-HEAD TAX COMPARISON · 2026

COUNTRY A New York VS COUNTRY B Illinois

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

Daniel · CountryTaxCalc Updated October 2026 Income tax verified October 2026 Tax Comparison 2026
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OVERVIEW
Illinois has a flat 4.95% income tax with no local or city income tax anywhere in the state, including Chicago, while New York charges progressive 3.9-10.9% state rates plus NYC adds 3.078-3.876% city tax. Moving from NYC to Chicago saves $3,231/year on $100k income (New York City resident tax after the NYC school tax credit, plus NY state, versus Illinois flat tax). Statewide property taxes differ meaningfully (NY 1.30% vs IL 1.88%, tied for highest in the US with New Jersey). Overall, Illinois offers tax savings for high earners, while NYC's low property tax (0.9% in Manhattan) benefits expensive homeowners. NYC-to-Chicago finance migration continues.
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
New York
TAX RATE
3.9-10.9%
Progressive + NYC Tax

State 3.9-10.9% + NYC 3.078-3.876%

🌆
COUNTRY B
Illinois
TAX RATE
4.95%
Flat Rate

Flat 4.95% (no local/city income tax anywhere in Illinois)

TYPICAL ANNUAL DIFFERENCE
Moving from New York → Illinois at $100,000
$3,231

That's $269/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
🗽 NY TAX
🌆 IL TAX
SAVINGS
10-YEAR
$50,000
$3,458
$2,330
$1,128
$11,280
$100,000
$8,036
$4,805
$3,231
$32,310
$200,000
$18,151
$9,755
$8,396
$83,960
$500,000
$51,532
$24,750
$26,782
$267,820
💡

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🗽

New York Pros & Cons

+ PROS
  • World-class culture: Broadway, MET, MoMA, music venues (vs Chicago)
  • Finance jobs: Wall Street highest-paying finance jobs globally
  • Diversity: Most diverse city (200+ languages, vs Chicago)
  • Public transit: NYC subway 24/7 (best in US, vs Chicago CTA)
  • Lower property tax: Manhattan 0.9% (vs Chicago 2.0-2.5%)
− CONS
  • Highest city tax: NYC resident tax plus NY state is about 8.0% of income at $100k (after the NYC school tax credit); the 14.8% combined rate applies only to income above $25 million
  • Very expensive: Highest cost of living in US (substantially higher than Chicago)
  • Crowded: NYC metro 20M vs Chicago 9.5M (less space)
  • Harsh winters: Cold, snow, ice (similar to Chicago)
  • Rent: Manhattan rents are typically well over double Chicago's (check current listings)
🌆

Illinois Pros & Cons

+ PROS
  • Lower income tax: 4.95% flat, no city tax (vs about 8.0% for NY state plus NYC) saves $3,231 on $100k
  • Housing: Chicago median $350k (vs NYC $750k, 53% cheaper)
  • Cost of living: substantially cheaper than NYC overall
  • Cleaner/less crowded: Chicago 9.5M vs NYC 20M metro
  • Midwest culture: Friendlier, slower pace (vs NYC intensity)
− CONS
  • Highest property tax: 1.88% (tied for #1 in US with New Jersey, but NYC Manhattan only 0.9%)
  • Harsh winters: -10°F, snow (similar to NYC but windier)
  • Population loss: Losing residents to lower-tax states
  • Pension crisis: Underfunded state pensions threaten tax increases
  • Smaller economy: Chicago less finance jobs than Wall Street
FAQ

Frequently Asked Questions

How much will I save moving from NYC to Chicago?

On $100,000 income, Illinois saves $3,231/year in income tax (New York State plus New York City resident tax after the NYC school tax credit, about 8.0% effective, vs Illinois's flat 4.95%, with no Chicago city income tax). Over 10 years: $32,310. On $200,000: $8,396/year ($83,960 over 10 years). However, Chicago-area property tax is higher (Illinois 1.88% statewide vs Manhattan 0.9%), so expensive homeowners ($1M+) may see reduced savings. Renters benefit most from the move.

Are property taxes really different?

NYC Manhattan property tax is unusually low: ~0.9% effective rate (unique assessment system). Chicago/Cook County: 2.0-2.5% locally, well above Illinois's statewide average of ~1.88% (which is itself tied for the #1 highest state average in the US, with New Jersey). On a $700k home: Manhattan pays about $6,300/year; at Illinois's statewide average rate (1.88%) the bill is $13,160/year (difference $6,860), and at Chicago/Cook County's 2.0-2.5% it would be $14,000-$17,500/year. This can fully offset income tax savings for expensive homeowners. However, most people rent in NYC, avoiding property tax.

Is NYC to Chicago finance migration real?

Post-2020 remote work enabled some NYC finance workers to relocate to Chicago while keeping high salaries, and many firms have Chicago offices (CBOE, CME trading). We do not quote a migration count here because IRS and Census flow figures differ by source and year; check the latest IRS Statistics of Income or Census data. Commonly cited drivers: lower income tax, housing affordability, remote work.

Which city has better quality of life?

NYC: World-class culture, diversity, 24/7 energy, best finance jobs. Chicago: Cleaner, much more affordable, great architecture/food, less crowded. Both have harsh winters, good public transit. Choose NYC for career max and culture. Choose Chicago for affordability and work-life balance.
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