Quick answer
Indiana has lower average 1BR rent ($1,050/mo vs $1,850/mo). State income tax: Indiana (3.05%) vs Illinois (4.95%) — on a $120K salary that's $2,280/year difference.
State Comparison · 2026
Illinois vs Indiana
Side-by-side on state income tax, rent, home prices, climate, and top metros — with specific dollar numbers for every claim.
Last updated: April 23, 2026
Illinois vs Indiana at a Glance
| Metric | Illinois | Indiana |
|---|---|---|
| Avg 1BR rent (major metros) | $1,850 | $1,050 ✓ |
| Avg median home price | $340K | $240K ✓ |
| Cheapest city | Chicago ($1,850) | Indianapolis ($1,050) ✓ |
| Priciest city | Chicago ($1,850) | Indianapolis ($1,050) |
| State income tax | 4.95% | 3.05% ✓ |
| Avg walkability | 78/100 ✓ | 31/100 |
| Cities tracked | 1 | 1 |
✓ marks the lower or more favorable value. Averages use the major metros we track in each state.
State Income Tax: Real Savings
What the rate gap actually looks like in your paycheck. Lower rate: Indiana (3.05%).
Salary $80K
$1,520
/year saved in Indiana
Salary $120K
$2,280
/year saved in Indiana
Salary $200K
$3,800
/year saved in Indiana
Calculation uses the effective state rate difference × gross salary. Doesn't include property tax, sales tax, or federal impact.
Deep Dive: Each State
Illinois (IL)
Tax reality
Illinois has a flat 4.95% state income tax (moderate) — but property taxes are among the highest in the US, averaging 2.1% effective. On a $350K Chicago home that's $7,400/year. Combined tax burden is higher than it looks. The state's pension underfunding creates long-term fiscal risk for homeowners.
Top cities (1 tracked)
Top drawbacks
- ✕Property tax is brutal — Cook County averages 2.3% effective. On a $500K home, that's $11,500/year. Homeowners feel this every month.
- ✕Chicago winters are genuinely cold. Lake-effect snow, mid-December through March subzero streaks, and winds off Lake Michigan can make it feel -20°F. This is the biggest filter for people considering moving here.
- ✕The state fiscal situation (pension debt, budget pressures) drives ongoing policy uncertainty — property tax, sales tax, and various fees continue to drift upward.
Indiana (IN)
Tax reality
Indiana has a flat 3.05% state income tax (one of the lowest flat rates in the US). Property tax is moderate (~0.8% effective with a 1% cap on residential assessed value). Sales tax 7% state (no local add-on). Indiana is genuinely low-tax.
Top cities (1 tracked)
Top drawbacks
- ✕Weather is distinctly Midwestern — cold gray winters (Indianapolis gets 20+ inches of snow and regularly below freezing November through March), humid summers, tornado risk in spring.
- ✕Beyond Indianapolis, the job market is heavily manufacturing-dependent. Auto parts, steel, and other industrial sectors have been declining; rural Indiana has ongoing economic pressures.
- ✕Indianapolis sprawls significantly. Outside the downtown Mile Square and Broad Ripple neighborhoods, you'll need a car.
Frequently Asked Questions
Is Illinois or Indiana cheaper to live in?
Indiana has lower average 1BR rent across major metros — $1,050/mo vs $1,850/mo in Illinois, a $800/mo difference. Home prices: Indiana median is $240K vs $340K.
Illinois vs Indiana: which has lower state income tax?
Indiana has lower state income tax (3.05%) vs 4.95% in Illinois. On an $80K salary that's $1,520/year in savings. On $200K, savings grow to $3,800/year.
Should I move from Illinois to Indiana?
Illinois has a flat 4.95% state income tax (moderate) — but property taxes are among the highest in the US, averaging 2.1% effective. On a $350K Chicago home that's $7,400/year. Combined tax burden is higher than it looks. The state's pension underfunding creates long-term fiscal risk for homeowners.
What are the best cities in Illinois vs Indiana?
Illinois's largest metros include Chicago. Indiana's largest metros include Indianapolis. Cost of living varies significantly within each state — a Illinois suburb can be 40% cheaper than its flagship city, and vice versa.