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Illinois taxes for delivery and rideshare drivers (2026)

By Jin JeongUpdated Checked against IRS and Illinois Department of Revenue sources

Illinois takes a flat 4.95% of your income after one small exemption allowance, with no brackets, no standard deduction, and no tips deduction. That makes the state side easy to compute and awkward in one place: the federal tips deduction cuts your federal bill, but Illinois taxes every dollar of tips.

Three numbers carry this guide: 4.95%, $1,000, and $2,850. The rate and the exemption set your bill, and $1,000 decides whether you pay in installments. The 1099 gig tax calculator pre-fills a rate close to Illinois's; for a precise figure, use the arithmetic in the example below.

Key numbers

ItemWhat applies
Income tax rateFlat 4.95% (2026)
Exemption allowance (single)$2,850 for 2025; none if federal AGI is over $250,000
No standard deductionIllinois has no standard deduction; the exemption is the only allowance
Federal tips deductionNot allowed. No Illinois subtraction found
Estimated tax formIL-1040-ES, paid through MyTax Illinois
Estimated tax triggerExpected liability over $1,000 after withholding and credits
Due datesApril 15, June 15, September 15, January 15
State 1099-K filing by payersFour or more transactions and more than $1,000 to an Illinois address (electronic filing)

Flat-rate arithmetic

The Department of Revenue's instructions put it in one sentence: the Illinois income tax rate is 4.95 percent. Illinois begins with federal adjusted gross income, which already includes the deduction for half of your self-employment tax, then applies the personal exemption allowance ($2,850 for a single filer on a 2025 return; the 2026 amount was not posted when we checked). There is no standard deduction at all, which is why Illinois takes more than states such as North Carolina or Georgia from the same income.

Take a single driver who grosses $55,000 including $6,500 of tips, drives 6,800 miles in the first half and 7,200 in the second, and has $1,200 of other expenses. The engine gives net profit $43,398.00 and AGI $40,332.03. Illinois taxable income is $37,482.03 after the exemption, and the tax is $1,855.36, an effective rate of 4.60% of AGI.

The effective rate rises with income toward 4.95% because the exemption is a fixed amount, but it never passes it. A driver with $80,000 of AGI is at 4.77%, and the exemption disappears entirely above $250,000 of federal AGI for a single filer, or $500,000 for a joint return.

The tips mismatch, in dollars

For this driver the federal tips deduction cuts federal income tax by $624.00. Illinois gives no matching relief, so the $6,500 of tips cost $321.75 of Illinois tax. The state does not conform because its starting point is federal AGI, and the federal deduction comes after that line. Illinois has a separate list of subtractions on Schedule M, and a tips line is not on it. Bills to create one have been filed, but Illinois lawmakers have not passed any that we found, and Ballotpedia's May 2026 count lists Illinois among the states not conforming. The practical rule: plan your federal savings, then do not assume a state-level saving. The tips calculator flags Illinois for this reason.

Estimated tax: the $1,000 rule

The IL-1040-ES says you must pay estimates if you reasonably expect your 2026 liability to exceed $1,000 after subtracting Illinois withholding, pass-through withholding, and credits for tax paid to other states, Illinois property tax, K-12 education expenses, the earned income credit, and a few others. The Department tells filers who need to pay to pay 100% of the tax, either all at once on April 15 or in four equal installments on April 15, June 15, September 15, and January 15, 2027. Penalty relief comes from paying at least 90% of this year's tax or 100% of last year's, in four equal installments on time.

The threshold helps part-time drivers. Take a single employee with $42,000 of W-2 wages who also drives for a delivery app: $16,000 of gross receipts, $1,800 in tips, 3,000 and 3,200 miles, and $400 of other expenses. Their gig profit adds about $10,216.37 to AGI, and at 4.95% that is roughly $505.71 of extra Illinois tax. That is under $1,000, so the gig income alone does not force estimated payments, though they need the money by April. With $60,000 of gig profit the extra tax passes $2,900 and installments are needed. Federal estimates are a different test; see the underpayment penalty guide.

The Department accepts payment through MyTax Illinois directly from a bank account, by credit card with a provider fee, or by electronic funds transfer. If you pay electronically, do not send the paper voucher.

What Illinois does with 1099-K data

Publication 110 requires payers to file 1099-K forms for Illinois-address payees with the state electronically if the IRS requires electronic filing, or if the payee has four or more separate transactions and a cumulative total above $1,000. Federal law sets the threshold for issuing the form to you at $20,000 and 200 transactions for 2026, and these two rules do not erase each other, so it is wise to assume the Department of Revenue can match platform payments to your Illinois return. 1099-NEC forms are not part of the electronic filing mandate unless the Department asks for them. Read the 1099 thresholds guide and report all income whether or not a form arrives.

General information for tax year 2026, not tax advice.

For a Midwest comparison, the Ohio guide covers a state where city and school district taxes matter more than state tax, and the Pennsylvania guide covers another flat-rate state.

Frequently asked questions

Does Illinois tax tips that I deduct on my federal return?

Yes. Illinois starts from federal adjusted gross income, and the federal tips deduction is taken after that line. We found no Illinois subtraction for tips on the 2025 Schedule M instructions or in the IL-1040 instructions, and no enacted law adding one, although bills have been filed. Expect to pay 4.95% on every tip dollar.

What is the Illinois income tax rate for 2026?

A flat 4.95%. The Department of Revenue's 2026 IL-1040-ES worksheet multiplies estimated net income by 4.95%. Illinois does not have brackets, so the rate is the same at every income level, and the exemption allowance is the only thing that shields income.

Do I need Illinois estimated payments if I drive part time?

Only if you reasonably expect your 2026 Illinois liability to exceed $1,000 after subtracting Illinois withholding, pass-through withholding, and listed credits. A part-time driver with a W-2 job whose employer already withholds Illinois tax may fall under that line, but if your gig profit adds more than that, you need to pay.

When are Illinois estimated payments due?

April 15, June 15, and September 15 of 2026 and January 15, 2027 for calendar-year filers. You can pay everything with the first installment or in four equal installments, through MyTax Illinois, by credit card (with a convenience fee), or by electronic funds transfer.

Does Illinois require platforms to report my payments to the state?

For 1099-K, yes in some cases. Illinois Publication 110 says 1099-K forms issued to a payee with an Illinois address must be filed electronically with the state if the IRS requires electronic filing or if the payee has four or more separate transactions and the cumulative total exceeds $1,000. That means the Department of Revenue can receive information about your platform payments even when your federal threshold is higher.

Is there a city income tax in Chicago or other Illinois cities?

We found no Illinois local income tax on individuals. Chicago and other cities have other taxes, but the income tax on your driving profit is the state's 4.95% plus federal tax. Check your city for business license rules.

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