Illinois personal income tax hike may finally be felt by taxpayers

When the state legislature approved the income tax increase in January 2011, many feared they would lose much needed income.  However, the federal payroll tax deduction worked to offset much of the hardship people feared from the state income tax increase.  Right now, the state income tax increase from 3% to 5% is scheduled to remain through 2014.

Unfortunately, the federal payroll tax reduction terminates at the end of this year.  Unless it is extended, manyIllinoistaxpayers will see a definite decrease in their net pay because of the higher state income tax rate.

For more details see, “Many haven’t felt state tax hike’s bite — yet.”