How Illinois compares
Ranked against the other 49 states on the figures we hold. Rates that combine state and local components — sales tax, the minimum wage where it varies by region — are shown on this page but not ranked, because a single number would misstate them.
| Figure | IL | Nationally | In its region |
|---|---|---|---|
| PopulationUS Census Bureau, Vintage 2025 estimates, July 1, 2025 | 12,719,141 | 6th highest of 50 | 1 of 12 |
| GDP ($bn)Bureau of Economic Analysis, 2025 | 1202 | 5th highest of 50 | 1 of 12 |
| Median household incomeUS Census Bureau, ACS 2024 1-year, 2024 | $83,211 | 18th highest of 50 | 2 of 12 |
| Unemployment rateBureau of Labor Statistics, LAUS (seasonally adjusted, preliminary), September 2026 | 4.6% | tied 40th lowest of 50 | 11 of 12 |
| Foreign-born shareUS Census Bureau, ACS 2024 1-year, 2024 | 15.4% | 13th highest of 50 | 1 of 12 |
| Property tax ratechecked Nov 2026; confirm with the Illinois legislature | 2.08% | 49th lowest of 50 | 12 of 12 |
| Deposit return window (days)checked Nov 2026; confirm with the Illinois legislature | 30 | tied 15th lowest of 50 | 4 of 12 |
| Eviction notice (days)checked Nov 2026; confirm with the Illinois legislature | 5 | tied 23rd highest of 50 | 4 of 12 |
| Final pay deadline (days)checked Nov 2026; confirm with the Illinois legislature | 14 | tied 26th lowest of the 29 states that set one | 6 of 8 |
- State income tax: yes41 of 50 states answer the same way
- At-will employment: yesthe same in all 50 states — it does not set Illinois apart
- Paid sick leave required: yes20 of 50 states answer the same way
- Paid family leave: no38 of 50 states answer the same way
- Workers' comp required: yes49 of 50 states answer the same way
- Rent control permitted: no46 of 50 states answer the same way
- Annual report required: yes43 of 50 states answer the same way
Statistical figures: US Census Bureau, Vintage 2025 estimates (July 1, 2025) · US Census Bureau, ACS 2024 1-year (2024) · Bureau of Economic Analysis (2025) · Bureau of Labor Statistics, LAUS (seasonally adjusted, preliminary) (September 2026) · SBA Office of Advocacy, 2025 Small Business Profiles (2025). Tax, wage, business and tenancy figures are recorded from state sources and were last checked on 2026-11-05 — confirm anything you are about to act on with the Illinois legislature.
How long you have in Illinois
The periods that decide whether something is on time. Days are calendar days unless the underlying rule says otherwise.
- Return a security deposit within
- 30 days
- Eviction notice before filing
- 5 days
- Final paycheck within
- 14 days
- LLC formation processed in
- 5-10 business days
- Annual report due
- By the first day of the LLC's anniversary month
- Overtime starts after
- 40 hrs/week
AI Legal Insights — Illinois
AI-generated · Updated July 2026
Illinois operates under an at-will employment doctrine, meaning employment can generally be terminated by either party at any time. The state also mandates paid sick leave, providing 40 hours per year, with specific local requirements in cities like Chicago.
With a massive GDP of $1,024B and over 1.2 million small businesses, Illinois serves as a central economic hub. However, businesses must navigate a relatively high sales tax in Chicago and a flat income tax rate of 4.95%.
The state maintains a diverse demographic profile with a foreign-born population of 14.4%. This diversity contributes significantly to the state's labor market and cultural landscape.
- ›Ensure compliance with local Chicago-specific labor ordinances when drafting employment agreements.
- ›Account for the 10.0% average sales tax when structuring consumer-facing service contracts.
- ›Verify all LLC filings are processed with the $150 state fee to maintain legal standing.
AI-generated insights · Verify with a licensed attorney before relying on this information.
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Employment Laws
Illinois labor regulations
Illinois is an at-will employment state with a $15.00/hr statewide minimum wage (employers with 4+ employees), in effect since January 1, 2025. The Paid Leave for All Workers Act gives most employees up to 40 hours of paid leave a year for any reason, unless a local ordinance (such as Chicago's) already covers them.
| Law | IL Rule | Federal Floor |
|---|---|---|
| Minimum Wage | $15.00/hr since January 1, 2025 (employers with 4+ employees); tipped workers $9.00/hr cash wage; Chicago and Cook County set higher local minimums | $7.25/hr |
| Overtime | After 40 hrs/week at 1.5× the regular rate | FLSA: after 40 hrs/week |
| Paid Leave | Up to 40 hrs/year of paid leave for any reason under the Paid Leave for All Workers Act; Chicago and Cook County employers follow local ordinances instead (Chicago: 40 hrs paid sick leave plus 40 hrs paid leave) | None (federal) |
| Paid Family Leave | No state paid family leave program | FMLA: 12 weeks unpaid |
| Workers Comp | Required for virtually all employers (820 ILCS 305) | Federal employees: yes |
| At-Will Employment | Yes, with public-policy and contract exceptions | Default nationwide |
| Final Paycheck | At separation if possible, and no later than the next regularly scheduled payday; earned vacation must be paid out (820 ILCS 115) | No federal requirement |
| Meal Breaks | 20-min meal break for shifts of 7.5+ hours, starting no later than 5 hours into the shift (820 ILCS 140) | No federal requirement |
| Day of Rest | At least 24 consecutive hours of rest in each workweek | No federal requirement |
| Non-Compete Agreements | Void for employees earning $75,000/year or less (threshold rises to $80,000 on January 1, 2027); non-solicits void at $45,000 or less ($47,500 from 2027) | No federal statute |
| Pay Transparency | Employers with 15+ employees must include the pay scale and benefits in job postings (since January 1, 2025) | No federal requirement |
- Chicago and Cook County set their own, higher minimum wages and paid leave rules.
- Since January 1, 2026, using AI in employment decisions in a way that discriminates is a civil rights violation, and employers must provide paid lactation breaks.
Sources: U.S. Department of Labor state minimum wage table · state labor agencies (checked Nov 2026)
Landlord-Tenant Laws
Illinois rental regulations
Illinois landlord-tenant rules vary by city. Chicago's Residential Landlord and Tenant Ordinance adds strong tenant protections, including interest on security deposits and strict deposit-handling rules; there is no statewide rent control.
| Topic | IL Rule |
|---|---|
| Security Deposit | No statewide statutory limit on the amount |
| Deposit Return | Statewide (buildings with 5+ units): itemized statement of deductions within 30 days and the balance within 45 days; Chicago RLTO: return within 45 days |
| Deposit Interest | Required statewide for buildings or complexes with 25+ units; in Chicago, landlords pay interest at a rate set each year by the city |
| Rent Control | Local rent control is prohibited statewide (765 ILCS 720) |
| Eviction Notice (Non-Payment) | 5-day written notice to pay or quit before filing (735 ILCS 5/9-209) |
| Eviction Notice (Lease Violation) | 10-day written notice to quit for breach of lease terms other than rent |
| Month-to-Month Termination | 30 days' written notice to end a month-to-month tenancy |
| Source of Income | The Illinois Human Rights Act bars refusing to rent because a tenant's income comes from a housing voucher or other lawful source |
| Late Fee Cap | No statewide cap; the Chicago RLTO limits late fees to $10/month for the first $500 of rent plus 5% of rent above $500 |
| Repair & Deduct | Chicago tenants may repair and deduct (limited amount) or withhold part of the rent after written notice and the landlord's failure to repair within 14 days (Chicago RLTO Sec. 5-12-110) |
Both landlords and tenants have enforceable rights under Illinois law. Document all communications and keep copies of your lease agreement. Use AI review to spot risky clauses before signing.
Starting a Business
Illinois LLC formation guide
Illinois has the fifth-largest state economy in the US (about $1.2 trillion in GDP) and roughly 1.4 million small businesses. It has a flat 4.95% individual income tax and a combined 9.5% corporate rate (7% income tax plus 2.5% personal property replacement tax). Forming an LLC costs $150, and the annual report costs $75 a year. Chicago and Cook County add local taxes and employment ordinances, so the total tax and compliance burden is among the higher in the Midwest.
Step-by-step LLC formation
- 1Choose a business name — must include "LLC," "L.L.C.," or "Limited Liability Company"; check availability at ilsos.gov
- 2File Articles of Organization (Form LLC-5.5) with the Illinois Secretary of State online or by mail
- 3Pay the $150 non-refundable filing fee (online filing is typically faster)
- 4Designate a registered agent — must have a physical Illinois street address
- 5Obtain an EIN from the IRS — free at irs.gov
- 6Register with the Illinois Department of Revenue (MyTax Illinois) for income, sales, and payroll taxes
- 7File the annual report each year by the first day of the LLC's anniversary month; the fee is $75
- 8Open a dedicated business bank account using your EIN and Articles of Organization
Every LLC also needs a free EIN from the IRS (Form SS-4). Apply online at irs.gov — takes about 15 minutes and is required to open a business bank account.
Popular IRS Forms
Most-filed federal forms for Illinois taxpayers
Fill these out online with plain-English guidance — every field explained, no accountant required. Download as a ready-to-file PDF when done.
The main annual federal income tax return every taxpayer files.
Fill out free →Give your SSN or EIN to a client before getting paid as a contractor.
Fill out free →Report $600+ paid to independent contractors during the year.
Fill out free →Tell your employer how much federal tax to withhold from pay.
Fill out free →Report income and expenses from a sole proprietorship or LLC.
Fill out free →Report payroll taxes withheld from employees each quarter.
Fill out free →Get an automatic 6-month extension to file your 1040.
Fill out free →The year-end wage statement employers issue to each employee.
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Federal Offices
United States government offices in Illinois
Walk-in assistance by appointment only. Call (844) 545-5640 to schedule, or book online at irs.gov.
Immigration appointments via my.uscis.gov or call (800) 375-5283.
Free Legal Aid
Illinois legal assistance organizations
These organizations provide free or reduced-cost civil legal services to qualifying Illinois residents.
Free civil legal services for low-income residents of Cook County
Free civil legal help for low-income residents in 36 northern and central Illinois counties
Statewide advocacy, training, and direct legal services for low-income Illinoisans
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