Illinois permits S corporations to be subject to federal taxation, but the state also has its own tax laws and regulations. An Illinois corporate income tax return for S corps must be filed, and it is due on the 15th day of the third month after the end of the tax year. The return is due, for instance, on March 15 of the year after the tax year closes on December 31st.
Due to Illinois’s prohibition on composite returns, each shareholder is liable for their proportionate share of state income taxes. In contrast, certain other jurisdictions, like Georgia and Alabama, let S corporations to submit composite filings and cover shareholder tax obligations.
It’s vital to remember that S corps can only be categorized as corporations. Since they are not treated as distinct legal entities from their owners, sole proprietors are not eligible to be categorized as S corporations. However, a lone owner might incorporate a business and choose to pay taxes as a S corporation. Any corporation that conducts business in Illinois or receives money there must submit an Illinois corporate tax return. This applies to both normal companies and S Corporations. Taxes on corporate income in Illinois are not levied on nonprofit organizations.
The corporate income tax rate in Illinois is a flat 9.5% for the 2020 tax year. The 2019 tax year’s rate is the same as this one. It is crucial to remember that Illinois has a unique personal income tax rate that varies depending on income level from 4.95% to 7.99%.
Finally, S corporations in Illinois are subject to a unique set of tax laws and regulations. Each shareholder is responsible for paying their own proportion of state income taxes, and they must file an Illinois corporate income tax return. Even while sole owners cannot be considered S corps, they can nevertheless incorporate and choose to pay taxes as a S corp. Any firm conducting business in Illinois must submit an Illinois corporate tax return, and the state’s corporate income tax rate for the 2020 tax year is a flat 9.5%.