State Gig Tax Guide
Illinois Gig Worker Taxes: The Complete Breakdown
If you drive, deliver, or freelance in Illinois, platforms pay you as an independent contractor and withhold nothing. You owe the 15.3% federal self-employment tax and federal income tax — and because Illinois has a flat state income tax, you also owe state income tax on your net earnings. The flat rate at least makes the state piece easy to estimate. Here's how it works.
← Part of the complete Gig Worker Taxes guideHow gig taxes work for Illinois workers
You're an independent contractor — nothing is withheld
Gig platforms pay you as a 1099 contractor, not an employee, so no income or payroll tax comes out of your payouts. You're responsible for setting aside and paying your own taxes.
Federal self-employment tax is 15.3%
That's 12.4% Social Security + 2.9% Medicare on your net earnings — the employer-plus-employee share that a regular job would split with you. It applies in every state, on top of federal income tax.
Federal income tax applies to your net profit
After deductions, your net gig profit is added to your other income and taxed at your federal rate. You can deduct half of your self-employment tax when figuring federal income tax.
Report all income — even without a 1099
You must report every dollar you earn whether or not a platform sends a 1099-NEC or 1099-K. Reporting thresholds for the forms change year to year; your obligation to report does not.
Does Illinois have a state income tax for gig workers?
Yes — and unlike California or New York, it's a flat tax. Illinois taxes individual income at a single flat rate of roughly 4.95% (rates can change, so confirm the current figure with the Illinois Department of Revenue). Your net gig profit is taxed at that flat rate on top of federal income tax and the 15.3% federal self-employment tax.
Illinois has no separate state self-employment tax — the 15.3% SE tax is federal only — but you still report and pay the flat state income tax on your net earnings. Because the rate is flat, estimating the state portion is straightforward: it's the same percentage regardless of how much you earn.
Pay Illinois estimated income tax to the Department of Revenue using Form IL-1040-ES, generally on the same quarterly schedule as your federal estimates. This is separate from the federal estimated payments you send the IRS.
Remember: the 15.3% self-employment tax is federal and the same in every state — Illinois's income tax is an additional layer on top.
What Illinois gig workers can deduct
Business mileage
Every mile driven while online or on a job, deducted at the IRS standard mileage rate. Usually the single largest deduction — keep a contemporaneous log.
Phone & data
The business-use percentage of your phone and data plan — you cannot accept jobs without it.
Supplies & equipment
Insulated bags, phone mounts, chargers, and other gear bought specifically for the work.
Tolls & parking
Tolls and parking paid while working are deductible (ordinary commuting tolls are not).
You can deduct the IRS standard mileage rate or your actual vehicle expenses — not both. For most drivers the standard mileage rate is simpler and larger. Keep a contemporaneous mileage log either way.
Quarterly estimated taxes
Because no tax is withheld from your payouts, the IRS expects you to pay as you go through quarterly estimated payments rather than one lump sum in April. If you expect to owe $1,000 or more in federal tax for the year, paying quarterly avoids an underpayment penalty.
Federal estimated payments are generally due around April 15, June 15, September 15, and January 15 of the following year. You file your annual federal return by April 15. Illinois expects its own state estimated payments on a comparable schedule — see the state resources below for the exact form and due dates.
Frequently asked questions
Do Illinois gig workers pay state income tax?
Yes. Illinois has a flat state income tax of roughly 4.95% (confirm the current rate with the Illinois Department of Revenue) that applies to your net gig earnings in addition to federal income tax and the 15.3% federal self-employment tax. You pay state estimates using Form IL-1040-ES.
How much should I set aside for taxes in Illinois?
A common rule of thumb is to set aside roughly 25–30% of your net earnings (what's left after mileage and other deductions) to cover the 15.3% self-employment tax, federal income tax, and state income tax. Your exact rate depends on your total household income and your state bracket. Use the Tax Set-Aside calculator for a number tailored to your situation.
What is the Illinois income tax rate for gig workers?
Illinois uses a single flat individual income tax rate — about 4.95% as of recent tax years. Because it's flat rather than progressive, the same percentage applies to your net gig earnings no matter your income level. Always confirm the current rate with the Illinois Department of Revenue.
How do I pay Illinois estimated taxes as a gig worker?
Use Illinois Form IL-1040-ES to pay state estimated income tax to the Department of Revenue, generally four times a year alongside your federal estimates. You can pay online through the department's website. This is separate from your federal estimated payments to the IRS.
What can Illinois gig workers deduct?
The biggest deduction is business mileage at the IRS standard mileage rate for every mile driven while working. You can also deduct the business-use share of your phone, supplies and equipment, tolls, and parking — which lower your federal taxable income (the flat Illinois tax is based on your federal income with state adjustments).
Authoritative resources
Federal (IRS)
- IRS: Self-Employed Individuals Tax Center ↗
- IRS: Self-Employment Tax (Social Security and Medicare) ↗
- IRS: Estimated Taxes ↗
- IRS: Standard Mileage Rates ↗
Illinois state tax agency
Free calculators
Stop guessing what you owe
UnifyOne tracks your gig earnings, mileage, and tax set-aside automatically — so quarterly taxes in Illinois are never a surprise.
This guide is educational information, not tax advice. Federal and state tax rules, brackets, and the IRS standard mileage rate change yearly — confirm current figures with the IRS, the Illinois tax agency, or a qualified tax professional for your situation.