Illinois Guide for Canadians

Quick Facts

State Income Tax	4.95% flat rate (no tax on retirement income or Social Security)
Sales Tax	6.25% state + local (up to 11% total in Chicago)
Driver's License Grace Period	90 days for foreign license holders becoming residents
Residency Requirement for Tax	Resident for any part of tax year or domiciled in Illinois
Vehicle Registration Deadline	30 days after establishing residency
REAL ID Deadline	May 7, 2025 for domestic flights

First 90 Days Checklist

Week 1-2: Essential Documents

• Gather required documents for driver's license and REAL ID
• Open US bank account with Illinois address
• Set up temporary mailing address

Week 3-4: Official Registration

• Apply for Illinois driver's license (within 90 days for foreign license holders)
• Register vehicle if brought from Canada (within 30 days)
• Register to vote in Illinois

Month 2-3: Establishing Residency

• Update address with Canadian financial institutions
• Establish Illinois ties and documentation
• Obtain Illinois vehicle insurance

Driver's License & Vehicle Requirements

For Canadian Citizens

Required Documents for REAL ID:

• Original valid Canadian passport
• Social Security Number documentation (if applicable)
• Two proofs of Illinois residential address

Testing Requirements:

• Illinois does not recognize international driver's licenses
• Written exam required for Canadian citizens
• Driving test may be required depending on circumstances
• Vision screening required

Important Notes:

• 90-day grace period for foreign license holders becoming residents
• REAL ID required by May 7, 2025 for air travel
• Must surrender foreign license when obtaining Illinois license

Vehicle Registration

• Register within 30 days of establishing Illinois residency
• Annual safety inspection not required statewide
• Emissions testing required in Chicago area and some counties
• Illinois insurance required for registration

Tax & Residency Considerations

Illinois State Tax Profile

• **Flat income tax** 4.95% on all income levels
• **No tax on retirement income** or Social Security benefits
• **High property taxes** (1.95% effective rate, 2nd highest in nation)
• **Moderate to high sales tax** 6.25% state + local (up to 11% in Chicago)

Establishing Illinois Tax Residency

Illinois residency is based on domicile and physical presence:

• Resident for any part of the tax year
• Domiciled in Illinois during tax year
• Physical presence supporting residency intent

Documentation to Establish Residency

• Illinois driver's license and voter registration
• Bank accounts and utility bills in Illinois
• Employment or business activities in Illinois
• Professional licenses, club memberships, property ownership

US Federal Tax Implications for Canadians

Important: Under the Substantial Presence Test, you may be considered a U.S. resident for tax purposes.
Recommendation: Consult a cross-border tax professional.

Healthcare Considerations

Insurance Options

• Illinois expanded Medicaid but coverage limited to eligible residents
• Travel insurance strongly recommended for visitors
• Consider comprehensive US health insurance for permanent residents
• Excellent medical facilities in Chicago and suburban areas

Prescription Medications

• Bring adequate supply from Canada
• Understand prescription transfer requirements
• US prices often higher than Canadian prices
• Major pharmacy chains available with discount programs

Special Considerations for Snowbirds

Maintaining Canadian Ties

• Keep principal residence in Canada
• Monitor days in U.S. for tax reasons (183-day rule)
• Maintain Canadian insurance & banking relationships
• Illinois residency determination requires careful planning

Property Considerations

• Property values vary significantly by location
• Very high property taxes, especially in Cook County
• Senior citizen property tax exemptions available
• Consider impact on Canada's principal residence exemption

Climate & Lifestyle Benefits

• Four distinct seasons with cold winters
• Rich cultural offerings, especially in Chicago
• Excellent transportation infrastructure
• Strong Canadian expat community in Chicago area

Travel Documentation

• Ensure passport validity (6+ months remaining)
• Consider Global Entry/NEXUS for easier border crossings
• Track residency establishment carefully
• REAL ID available for enhanced travel convenience

Urban and Rural Options

Illinois offers world-class urban amenities in Chicago and affordable rural living throughout the state. The flat income tax and no tax on retirement income can be attractive, but high property taxes require careful consideration.

Key Contacts & Resources