All the casualties took place in Kuwair village located 40 miles (65 kilometers) south of Erbil city.
The ISIL had launched the attack on the village from three fronts, including one from the Zab River using two boats.
The Peshmerga claimed the ISIL dead included four alleged suicide attackers armed with explosives belts. The river boats used by the ISIL were also destroyed, the source said.
Four Peshemrga were also killed and five others were wounded in the clashes, the source added.
This was the first time that the ISIL reportedly used river boats in the attack.
Iraq has been gripped by a security vacuum since June, when the ISIL stormed the northern province of Mosul and declared what it called a caliphate in Iraq and Syria.
The U.S. is leading an international coalition that has carried out numerous airstrikes against ISIL in Iraq and Syria since the militant group took over Mosul, in northern Iraq, in June.