How is crypto taxed in Illinois?

Crypto tax in Illinois now has two parts. The first is the state income tax, which reaches crypto gains and income like any other income. The second is a new tax on crypto transactions themselves, the first of its kind in the US, which has been delayed by a court order. How other states tax crypto is in do states tax crypto.

How is bitcoin taxed in Illinois income tax?

Illinois starts from your federal return. The 2025 IL-1040 instructions say line 1 is your federal adjusted gross income, which already includes crypto gains and crypto income worked out under IRS rules. Those rules are covered in how crypto is taxed in the US.

The Illinois Department of Revenue lists a flat individual rate of 4.95%, in effect since 1 July 2017. The instructions give a personal exemption of $2,850 for tax year 2025. Because the rate is flat, a long-term gain and a short-term gain are taxed at the same state rate. The 2025 return was due on 15 April 2026.

What is the Illinois crypto transaction tax?

It is the Digital Asset Tax, created in the state's fiscal 2027 budget bill, SB 3019, which Governor Pritzker signed on 16 June 2026, PwC reports. It charges 0.2% of the value of digital assets involved when they are exchanged, transferred or stored for an Illinois customer. Customers bear the tax. Brokers collect it if they have a physical presence in Illinois or at least $100,000 of Illinois receipts in 12 months.

If a broker does not collect it, PwC says Illinois customers must self-assess and report the tax. Jones Day notes that the law presumes receipts are from Illinois unless the broker proves otherwise. It also points out that the law does not define "value." Some NFTs and gaming tokens fall outside the definition of a digital asset.

Is there a crypto transfer tax in Illinois yet?

Not yet. The tax was set to begin on 1 January 2027. Industry groups sued in July and August 2026, arguing it breaks the US and Illinois constitutions and the Internet Tax Freedom Act. On 1 October 2026 the state, the Chamber of Digital Commerce and the Illinois Blockchain Association filed a joint motion for a preliminary injunction. The Sangamon County Circuit Court approved it, moving the start date to 1 July 2027, PwC reported. No court has ruled on the merits.

Meanwhile, the Department of Revenue released draft rules on 28 September 2026. They cover which transactions are taxed, sourcing, broker registration and record keeping, and comments were due by 30 October 2026, EY reported. This tax is separate from sales tax, covered in is there sales tax on crypto.

Rules differ by state and change often. Check the tax authority or a qualified professional for your own situation.