Illinois vs Arkansas Taxes
Compare the total tax burden between Illinois (4.95% flat) and Arkansas (0% – 3.7%). Enter your income to see which state saves you more.
| Tax Component | Illinois | Arkansas |
|---|---|---|
| Federal Tax | $13,170 | $13,170 |
| State Tax | $4,805 | $3,490 |
| FICA | $7,650 | $7,650 |
| Total Tax | $25,625 | $24,310 |
| Take-Home | $74,375 | $75,690 |
| Effective Rate | 25.63% | 24.31% |
| Annual Difference | $1,316 more | $1,316 less |
The $1,316 difference is primarily because Illinois has a flat 5.0% income tax, while Arkansas has a progressive income tax with rates up to 3.9%. At your income level, Illinois's marginal rate is 5.0% vs Arkansas's 13.7%.
Why the difference
You'd save $1,316/year ($110/month) in Arkansas vs Illinois.
Tax structure
Illinois has a flat 5.0% state income tax, while Arkansas uses progressive brackets up to 3.9%.
Effective rate at your income
At $100,000, Arkansas's effective state rate is 3.5% vs 4.8% in Illinois — a 1.3 percentage point gap.
Tip: The flat 4.95% rate means your effective state tax rate is close to 4.95% regardless of income — no progressive bracket benefit. Property taxes in Cook County (Chicago) can exceed $6,000-$10,000 on a median-value home.
Tip: In a progressive-bracket state, pre-tax 401(k) and HSA contributions reduce your state tax bill along with federal tax. If you are near a bracket boundary, an additional contribution can drop you into a lower state bracket.
Illinois Total Tax
$25,62525.63% effective rate
Arkansas Total Tax
$24,31024.31% effective rate
Annual Savings
$1,316by living in Arkansas
Tax at Different Income Levels
| Income | Illinois Total Tax | Arkansas Total Tax | Annual Savings |
|---|---|---|---|
| $75,000 | $16,975 | $15,695 | Save $1,280 |
| $100,000 | $25,625 | $24,310 | Save $1,316 |
| $150,000 | $43,489 | $41,559 | Save $1,931 |
| $200,000 | $60,828 | $58,273 | Save $2,556 |
Based on single filer, standard deduction, 2026 tax year. Includes federal income tax, state income tax, and FICA.
Why the difference
You'd save $1,316/year ($110/month) in Arkansas vs Illinois.
Tax structure
Illinois has a flat 5.0% state income tax, while Arkansas uses progressive brackets up to 3.9%.
Effective rate at your income
At $100,000, Arkansas's effective state rate is 3.5% vs 4.8% in Illinois — a 1.3 percentage point gap.
Tip: The flat 4.95% rate means your effective state tax rate is close to 4.95% regardless of income — no progressive bracket benefit. Property taxes in Cook County (Chicago) can exceed $6,000-$10,000 on a median-value home.
Tip: In a progressive-bracket state, pre-tax 401(k) and HSA contributions reduce your state tax bill along with federal tax. If you are near a bracket boundary, an additional contribution can drop you into a lower state bracket.
Understanding Each State
Illinois
Illinois has a flat income tax rate of 4.95% on all taxable income. While the rate is moderate compared to states like California or New York, Illinois's high property taxes (average ~2.08%, second-highest nationally) significantly increase the total tax burden, particularly for homeowners.
Tip: The flat 4.95% rate means your effective state tax rate is close to 4.95% regardless of income — no progressive bracket benefit. Property taxes in Cook County (Chicago) can exceed $6,000-$10,000 on a median-value home.
Arkansas
This state uses a progressive income tax system with multiple brackets, similar to the federal system. Only the income within each bracket is taxed at that rate, so your effective state rate is lower than the top bracket. Tax planning strategies include maximizing pre-tax retirement contributions to reduce state-taxable income.
Tip: In a progressive-bracket state, pre-tax 401(k) and HSA contributions reduce your state tax bill along with federal tax. If you are near a bracket boundary, an additional contribution can drop you into a lower state bracket.
Key Comparison Points
Income tax structure: Illinois has a flat income tax (4.95% flat), while Arkansas has a progressive income tax (0% – 3.7%).
Beyond income tax: State tax comparisons should also consider property tax rates, sales tax, and cost of living. A state with no income tax may have higher property or sales taxes that offset the savings.
SALT deduction cap: Under OBBBA, the 2026 federal SALT cap is $40,400, phasing out above $505,000 MAGI toward a $10,000 floor. This limits the federal tax benefit of living in a high-tax state, so the gross state tax difference remains close to the net difference for most earners — especially high earners inside the phaseout.
Frequently asked questions
Is it cheaper to live in Illinois or Arkansas?
Based on income tax alone, Arkansas has a lower tax burden. At $100K income, you'd save $1,316 annually in Arkansas compared to Illinois. However, total cost of living also depends on property taxes, sales taxes, and housing costs.
How much would I save moving from Illinois to Arkansas?
A single filer earning $100,000 would save approximately $1,316 per year in total taxes by living in Arkansas instead of Illinois. At $150,000 income, the savings change to $1,931 per year.
What is the income tax rate in Illinois?
Illinois has a flat income tax with rates of 4.95% flat.
What is the income tax rate in Arkansas?
Arkansas has a progressive income tax with rates of 0% – 3.7%.