When you sell a stock, fund or property at a profit in Illinois, you face tax from two directions. Federally, long-term gains get the favorable 0%/15%/20% rates while short-term gains are taxed as ordinary income. Illinois, however, makes no distinction: it taxes all capital gains at its flat 4.95% rate, just like wages. This calculator layers both so you can see your true combined tax on an investment sale.
How it works
The calculation handles the two layers separately:
- Holding period. Long-term means held more than one year and qualifies for federal preferential rates; short-term (one year or less) is taxed at federal ordinary rates.
- Federal tax. For long-term gains, the calculator stacks the gain on top of your other taxable income and applies the 0%/15%/20% brackets. For short-term gains it applies your ordinary federal bracket.
- Net investment income tax. If your income exceeds
$200,000(single) or$250,000(joint), an extra 3.8% NIIT applies to the gain. - Illinois tax. The flat 4.95% applies to the full gain regardless of holding period.
The result is federal capital gains tax plus NIIT plus Illinois tax on the same gain.
Tips and example
A single filer with $90,000 of other taxable income who realizes a $20,000 long-term gain stacks the gain on top, landing in the federal 15% bracket: $3,000 federal. Illinois adds 4.95% ($990), for a combined $3,990 — about a 20% total rate. No NIIT applies because total income is below $200,000.
If that same gain were short-term, it would be taxed at the filer’s ordinary federal rate (often 22% or 24%) plus the same 4.95% Illinois, costing noticeably more. This is why holding more than a year matters federally — but never changes your Illinois bill. This estimate covers the gain only; consult a tax professional for your full return.