Bill > HB2702

This bill amends the Illinois Income Tax Act to remove a previous limitation that restricted the pass-through entity level tax election to tax years beginning prior to January 1, 2026. Specifically, the bill eliminates the language <del>and beginning prior to January 1, 2026</del> from the existing law, which effectively extends the ability of partnerships and S corporations to make an annual election to pay tax at the entity level. Under this pass-through entity tax election, these businesses can choose to pay Illinois state income tax at the entity level, with partners and shareholders then receiving a credit for their proportional share of the tax paid. This approach can provide tax benefits for some businesses, particularly in light of federal limitations on state and local tax deductions. The bill makes this provision permanent, removing the previous sunset date, and becomes effective immediately upon enactment.

Budget and Finance

https://www.ilga.gov/legislation/BillStatus.asp?DocNum=2702&GAID=18&DocTypeID=HB&SessionID=114&GA=104