Tax Comparison: Illinois vs Texas
Illinois has a flat 4.95% state income tax (high for a flat rate), plus Chicago residents pay ~3.75% local income tax, combining to ~8.7%. Texas has zero income tax. For a $150K earner, the difference is $7,425/year in state income tax plus $2,800-$3,000/year in Chicago local tax (~$10,500 total). Texas savings are significant for Chicagoans, especially when combined with lower cost of living.
Real Tax Savings by Salary (Single Filer)
Here is exactly how much you save in state income tax by living in Texas instead of Illinois:
| Annual Salary | IL State Tax | TX State Tax | Annual Savings |
|---|---|---|---|
| $75,000 | $3,713 | $0 | $3,713 |
| $100,000 | $4,950 | $0 | $4,950 |
| $150,000 | $7,425 | $0 | $7,425 |
| $200,000 | $9,900 | $0 | $9,900 |
At $150,000 Salary, You Keep an Extra
$7,425/year
That is $619/month more in your pocket -- just from state tax alone.
Cost of Living Comparison
Chicago cost index (107) vs Texas average (95) shows a modest 11% difference. However, rent is the biggest factor: Chicago $2,400 2BR vs Austin $2,200 vs Dallas $1,900. That's 15-25% cheaper in Texas. Utilities are higher in Texas (AC costs). Groceries are similar. Overall, a family saves $12,000-$18,000 annually in Texas on living expenses.
Housing: Rent & Purchase Prices
Chicago median home price ($250K) is lower than Texas median ($285K), but this masks city vs suburbs differences. Chicago city is expensive; suburbs cheaper. Texas suburbs are very affordable. Property taxes favor Texas: IL's Cook County averages ~1.18% vs Texas 1.8%, but Texas homes are larger and newer. For families seeking space and affordability, Texas wins.
Home Purchase: What Your Money Buys
$250,000 in Illinois
- Flat income tax at 4.95% simplifies planning
- Affordable housing outside Chicago
- Strong job market in Chicago metro
- Property tax: ~1.18%
$285,000 in Texas
- No state income tax saves thousands annually
- Affordable housing and cost of living
- Growing tech and energy sectors
- Property tax: ~1.80%
Quality of Life Factors
Chicago excels in culture (museums, theater, music, art), lake recreation, public transit, and four seasons. Texas excels in growth energy, business culture, outdoor recreation, and warm weather (except summers). Chicago is walkable in city; Texas is sprawling and car-dependent. Chicago winters are brutal; Texas summers are brutal. Trade-off: choose Chicago for culture/winter sports; Texas for business/growth.
Climate & Lifestyle
Illinois
Climate: Humid continental. Cold, snowy winters with 40 inches annual snow. Hot, humid summers. Spring and fall are mild.
Top Cities
chicago-il
Texas
Climate: Hot and humid subtropical. Summers routinely exceed 95°F; winters mild. Occasional ice storms in north.
Top Cities
austin-tx, dallas-tx, houston-tx
Pros & Cons at a Glance
Illinois
Pros
- Flat income tax at 4.95% simplifies planning
- Affordable housing outside Chicago
- Strong job market in Chicago metro
- Diverse economy beyond finance
- Cultural institutions and arts scene
Cons
- High property taxes, especially Cook County
- Cold winters with heavy snow
- Chicago crime rates in certain neighborhoods
- State budget and pension crises
- Out-migration due to high taxes
Texas
Pros
- No state income tax saves thousands annually
- Affordable housing and cost of living
- Growing tech and energy sectors
- Diverse cities with strong cultural identity
- Low unemployment and business-friendly climate
Cons
- Extreme summer heat with high AC costs
- High property taxes (1.6%-2.2%)
- Car-dependent with limited public transit
- Higher humidity in coastal/eastern cities
- Limited gun regulations and cultural differences
The Verdict
Move to Texas if: You're in tech (Austin), work in business/finance (Dallas), want to escape winter and high taxes, and can handle 100°F+ summers. Skip if: You love culture and walkability, need public transit, or hate heat. For Chicago professionals, Texas offers excellent financial arbitrage: $7,425-$10,500/year in tax savings plus lower cost of living. Austin offers tech jobs and growth; Dallas offers finance and space.
Run Your Personal Numbers
Generic comparisons only go so far. Use our free calculators to see exactly how much you would save based on your salary, city, and lifestyle.
Frequently Asked Questions
How much do Chicago residents save moving to Texas?
A Chicago resident at $150,000 saves approximately $7,425/year in state income tax (IL 4.95% vs TX 0%). Add lower rent ($1,500-$2,000/month cheaper), and annual savings exceed $25,000. Texas offers no income tax plus lower overall costs. For Chicago professionals, Texas is increasingly attractive.
Is Austin or Dallas a good alternative to Chicago?
Both are growing rapidly. Austin has exploded as a tech hub with job growth and innovation (Google, Tesla, Oracle). Dallas is the finance/business center of Texas. Cost of living is 30-35% lower than Chicago. Austin salary is ~85% of Chicago; Dallas is ~80%. Austin's culture is vibrant; Dallas is more corporate. Both lack Chicago's lake and cultural institutions but offer growth opportunities.
What are the biggest differences between Chicago and Texas?
Weather: Chicago brutal winters (snowy, cold); Texas brutal summers (100°F+). Culture: Chicago has museums, opera, theater, lake culture; Texas is more business-focused. Transit: Chicago has decent public transit (CTA); Texas is car-dependent. Cost: Texas is 30-35% cheaper. Politics: Chicago is very liberal; Texas leans conservative.
Is Illinois' income tax really 4.95%?
Yes. Illinois has a flat 4.95% income tax (one of the nation's highest for a flat rate). Plus Chicago residents pay local income tax (3.5-3.75%), bringing combined Chicago tax to ~8.5-8.7%. Texas has zero income tax. Illinois also has high property taxes, making the state one of the most expensive.
Will I take a pay cut moving from Chicago to Texas?
Likely 10-20% unless you're in tech (Austin) where salaries are competitive. However, the lower cost of living (30-35% cheaper) plus $7,425/year tax savings offset salary cuts for most people. For tech workers in Austin, salary cuts are minimal or nonexistent.
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Disclaimer: ⚠️ Important: We do NOT collect or store any data you enter. All calculations happen 100% in your browser. Tax calculations use 2026 IRS tax tables (IRS Publication 15-T) and current state tax rates. Cost of living estimates are based on 2026 average market data. This is a free educational tool to help you understand your finances—it is NOT a financial service. Results are for illustrative purposes only and do not constitute professional tax, financial, or legal advice. If you notice any discrepancies, please contact us so we can improve. Consult a qualified CPA or financial advisor for personalized guidance.