Bill > SB1833

This bill amends the Illinois Income Tax Act to modify how taxpayers calculate their base income for tax purposes, specifically focusing on income derived from sources within and outside of Illinois. Starting from January 1, 2026, taxpayers will be allowed to exclude two specific types of income when calculating their base income: (1) income from a trade or business conducted both within and outside Illinois that is not derived from or connected with Illinois sources, and (2) income from a pass-through entity conducting business both within and outside Illinois that is not derived from or connected with Illinois sources. The determination of what constitutes Illinois sources will be based on the provisions in Article 3 of the Act. This modification aims to provide taxpayers with more flexibility in reporting income that may not be directly attributable to economic activities within the state, potentially reducing their state tax liability. The bill includes a provision ensuring that this new modification is exempt from the standard limitations outlined in Section 250 of the Illinois Income Tax Act.

Budget and Finance

https://www.ilga.gov/legislation/BillStatus.asp?DocNum=1833&GAID=18&DocTypeID=SB&SessionID=114&GA=104