Illinois tax exemption would be among nation's most generous

SPRINGFIELD - Gov. Pat Quinn's plan to raise the personal income tax exemption to $6,000 from $2,000 per person would make Illinois' exemption one of the most generous in the nation. Only Connecticut's $13,000 exemption is more generous. But Connecticut does not apply its exemption to dependents. In addition, Connecticut's exemption decreases as income increases. Illinois' is static for all incomes. Therefore, Illinois' $6,000 per person exemption would top Connecticut's for a three-person household. A taxpayer does not pay tax on exempted income.

Here are the income tax exemptions allowed in neighboring states

State Individual Exemption Dependent Exemption

Illinois (now) $2,000 $2,000

Illinois (proposed) $6,000 $6,000

Indiana $1,000 $2,500

Wisconsin $700 $700

Iowa $40 $40

Kentucky $20 $20

Missouri $2,100 $1,200

SOURCE: The Tax Foundation, a nonpartisan tax research group based in Washington, D.C.