by Navigating taxes as a senior can be complex, especially when considering both federal and state-level benefits. One lesser-known but valuable advantage for Illinois residents aged 65 and older is the state’s extra exemption allowance—a benefit that works differently than the federal standard deduction.
While the federal system offers bonus deductions for seniors, Illinois provides an additional exemption. This guide helps you understand what qualifies, how much you can claim, and how it impacts your Illinois income tax.
What Is Illinois’ Additional Exemption for Seniors?
- Illinois doesn’t offer a standard deduction like the federal government. Instead, it provides a personal exemption allowance that reduces your taxable income directly.
- For the 2025 tax year, each exemption is valued at $2,850, an increase from $2,775 in 2024
- Seniors aged 65 or older (or those who are legally blind) may claim an additional $1,000 exemption
Income Limits & Eligibility
- Illinois exempts this allowance from taxpayers whose federal adjusted gross income (AGI) exceeds certain thresholds:
- $500,000 for married couples filing jointly.
- $250,000 for single filers, heads of households, or married filing separately
Example Scenarios
Here’s how the exemption stacks up in real-world scenarios:
- Single Senior (65+):
Base exemption: $2,850
Age-based extra: $1,000
Total exemption: $3,850 from taxable income. - Married Couple Both Over 65:
Base exemptions: $2,850 × 2 = $5,700
Extra for both spouses: $1,000 × 2 = $2,000
Total exemption: $7,700.
These exemptions reduce taxable Illinois income directly, providing senior taxpayers with tangible state-level tax relief.
Federal vs. Illinois Relief for Seniors: A Quick Comparison
| Feature | Federal (2025 Tax Year) | Illinois (2025 Tax Year) |
|---|---|---|
| Base Reduction | Standard deduction (e.g., $15,750 single; $31,500 joint) | Not applicable – uses exemption system |
| Age-Based Benefit | Extra standard deduction ($2,000 single; $1,600 per spouse) | Extra exemption: $1,000 per senior |
| New Senior Bonus (2025‑2028) | Up to $6,000 per individual / $12,000 per couple (subject to income limits) | None on Illinois level |
| Applicability | Reduces federal taxable income; beneficial for seniors filing federal tax | Reduces Illinois taxable income; applies regardless of federal selections |
| Income Phase-Outs | Applies for moderate incomes, phases out at high MAGI levels | Expires if federal AGI exceeds thresholds |
Conclusion
For Illinois residents aged 65 and older, the state offers a straightforward but valuable tax benefit: an additional $1,000 exemption on your state taxable income. Although it’s not as substantial as some federal incentives—such as the new $6,000 senior bonus deduction—it’s still a meaningful form of relief, especially when combined with the base exemption allowance.
Remember to check your federal AGI against eligibility thresholds to confirm you qualify. As always, consider consulting a tax professional to optimize your return at both federal and state levels.
