Illinois 2025-2026 Regular Session

Illinois Senate Bill SB2041 Compare Versions

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1	1	104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 SB2041 Introduced 2/6/2025, by Sen. Celina Villanueva SYNOPSIS AS INTRODUCED: 35 ILCS 5/804 from Ch. 120, par. 8-804 Amends the Illinois Income Tax Act. In provisions concerning the estimated tax, provides that the required annual payment is the lesser of: (i) 90% of the tax shown on the return for the taxable year, or if no return is filed, 90% of the tax for the year; (ii) 100% of the tax shown on the return of the taxpayer for the preceding taxable year if a return showing a liability for tax was filed by the taxpayer for the preceding taxable year and the preceding year was a taxable year of 12 months; or (iii) 90% of the tax for the taxable year that would have been due based on the Act as it exists on the first day of the taxable year. Effective immediately. LRB104 08342 HLH 18393 b A BILL FOR 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 SB2041 Introduced 2/6/2025, by Sen. Celina Villanueva SYNOPSIS AS INTRODUCED: 35 ILCS 5/804 from Ch. 120, par. 8-804 35 ILCS 5/804 from Ch. 120, par. 8-804 Amends the Illinois Income Tax Act. In provisions concerning the estimated tax, provides that the required annual payment is the lesser of: (i) 90% of the tax shown on the return for the taxable year, or if no return is filed, 90% of the tax for the year; (ii) 100% of the tax shown on the return of the taxpayer for the preceding taxable year if a return showing a liability for tax was filed by the taxpayer for the preceding taxable year and the preceding year was a taxable year of 12 months; or (iii) 90% of the tax for the taxable year that would have been due based on the Act as it exists on the first day of the taxable year. Effective immediately. LRB104 08342 HLH 18393 b LRB104 08342 HLH 18393 b A BILL FOR
2	2	104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 SB2041 Introduced 2/6/2025, by Sen. Celina Villanueva SYNOPSIS AS INTRODUCED:
3	3	35 ILCS 5/804 from Ch. 120, par. 8-804 35 ILCS 5/804 from Ch. 120, par. 8-804
4	4	35 ILCS 5/804 from Ch. 120, par. 8-804
5	5	Amends the Illinois Income Tax Act. In provisions concerning the estimated tax, provides that the required annual payment is the lesser of: (i) 90% of the tax shown on the return for the taxable year, or if no return is filed, 90% of the tax for the year; (ii) 100% of the tax shown on the return of the taxpayer for the preceding taxable year if a return showing a liability for tax was filed by the taxpayer for the preceding taxable year and the preceding year was a taxable year of 12 months; or (iii) 90% of the tax for the taxable year that would have been due based on the Act as it exists on the first day of the taxable year. Effective immediately.
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11	11	1 AN ACT concerning revenue.
12	12	2 Be it enacted by the People of the State of Illinois,
13	13	3 represented in the General Assembly:
14	14	4 Section 5. The Illinois Income Tax Act is amended by
15	15	5 changing Section 804 as follows:
16	16	6 (35 ILCS 5/804) (from Ch. 120, par. 8-804)
17	17	7 Sec. 804. Failure to pay estimated tax.
18	18	8 (a) In general. In case of any underpayment of estimated
19	19	9 tax by a taxpayer, except as provided in subsection (d) or (e),
20	20	10 the taxpayer shall be liable to a penalty in an amount
21	21	11 determined at the rate prescribed by Section 3-3 of the
22	22	12 Uniform Penalty and Interest Act upon the amount of the
23	23	13 underpayment (determined under subsection (b)) for each
24	24	14 required installment.
25	25	15 (b) Amount of underpayment. For purposes of subsection
26	26	16 (a), the amount of the underpayment shall be the excess of:
27	27	17 (1) the amount of the installment which would be
28	28	18 required to be paid under subsection (c), over
29	29	19 (2) the amount, if any, of the installment paid on or
30	30	20 before the last date prescribed for payment.
31	31	21 (c) Amount of Required Installments.
32	32	22 (1) Amount.
33	33	23 (A) In General. Except as provided in paragraphs
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37	37	104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 SB2041 Introduced 2/6/2025, by Sen. Celina Villanueva SYNOPSIS AS INTRODUCED:
38	38	35 ILCS 5/804 from Ch. 120, par. 8-804 35 ILCS 5/804 from Ch. 120, par. 8-804
39	39	35 ILCS 5/804 from Ch. 120, par. 8-804
40	40	Amends the Illinois Income Tax Act. In provisions concerning the estimated tax, provides that the required annual payment is the lesser of: (i) 90% of the tax shown on the return for the taxable year, or if no return is filed, 90% of the tax for the year; (ii) 100% of the tax shown on the return of the taxpayer for the preceding taxable year if a return showing a liability for tax was filed by the taxpayer for the preceding taxable year and the preceding year was a taxable year of 12 months; or (iii) 90% of the tax for the taxable year that would have been due based on the Act as it exists on the first day of the taxable year. Effective immediately.
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68	68	1 (2) and (3), the amount of any required installment
69	69	2 shall be 25% of the required annual payment.
70	70	3 (B) Required Annual Payment. For purposes of
71	71	4 subparagraph (A), the term "required annual payment"
72	72	5 means the lesser of:
73	73	6 (i) 90% of the tax shown on the return for the
74	74	7 taxable year, or if no return is filed, 90% of the
75	75	8 tax for such year;
76	76	9 (ii) for installments due prior to February 1,
77	77	10 2011, and after January 31, 2012, 100% of the tax
78	78	11 shown on the return of the taxpayer for the
79	79	12 preceding taxable year if a return showing a
80	80	13 liability for tax was filed by the taxpayer for
81	81	14 the preceding taxable year and such preceding year
82	82	15 was a taxable year of 12 months; or
83	83	16 (iii) for installments due after January 31,
84	84	17 2011, and prior to February 1, 2012, 150% of the
85	85	18 tax shown on the return of the taxpayer for the
86	86	19 preceding taxable year if a return showing a
87	87	20 liability for tax was filed by the taxpayer for
88	88	21 the preceding taxable year and such preceding year
89	89	22 was a taxable year of 12 months; or .
90	90	23 (iv) 90% of the tax for the taxable year that
91	91	24 would have been due based on this Act as it exists
92	92	25 on the first day of the taxable year.
93	93	26 (2) Lower Required Installment where Annualized Income
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104	104	1 Installment is Less Than Amount Determined Under Paragraph
105	105	2 (1).
106	106	3 (A) In General. In the case of any required
107	107	4 installment if a taxpayer establishes that the
108	108	5 annualized income installment is less than the amount
109	109	6 determined under paragraph (1),
110	110	7 (i) the amount of such required installment
111	111	8 shall be the annualized income installment, and
112	112	9 (ii) any reduction in a required installment
113	113	10 resulting from the application of this
114	114	11 subparagraph shall be recaptured by increasing the
115	115	12 amount of the next required installment determined
116	116	13 under paragraph (1) by the amount of such
117	117	14 reduction, and by increasing subsequent required
118	118	15 installments to the extent that the reduction has
119	119	16 not previously been recaptured under this clause.
120	120	17 (B) Determination of Annualized Income
121	121	18 Installment. In the case of any required installment,
122	122	19 the annualized income installment is the excess, if
123	123	20 any, of:
124	124	21 (i) an amount equal to the applicable
125	125	22 percentage of the tax for the taxable year
126	126	23 computed by placing on an annualized basis the net
127	127	24 income for months in the taxable year ending
128	128	25 before the due date for the installment, over
129	129	26 (ii) the aggregate amount of any prior
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140	140	1 required installments for the taxable year.
141	141	2 (C) Applicable Percentage.
142	142	3 In the case of the followingThe applicable4 required installments:percentage is: 5 1st ..............................22.5%6 2nd ...............................45%7 3rd ...............................67.5%8 4th ...............................90% 3 In the case of the following The applicable 4 required installments: percentage is: 5 1st .............................. 22.5% 6 2nd ............................... 45% 7 3rd ............................... 67.5% 8 4th ............................... 90%
143	143	3 In the case of the following The applicable
144	144	4 required installments: percentage is:
145	145	5 1st .............................. 22.5%
146	146	6 2nd ............................... 45%
147	147	7 3rd ............................... 67.5%
148	148	8 4th ............................... 90%
149	149	9 (D) Annualized Net Income; Individuals. For
150	150	10 individuals, net income shall be placed on an
151	151	11 annualized basis by:
152	152	12 (i) multiplying by 12, or in the case of a
153	153	13 taxable year of less than 12 months, by the number
154	154	14 of months in the taxable year, the net income
155	155	15 computed without regard to the standard exemption
156	156	16 for the months in the taxable year ending before
157	157	17 the month in which the installment is required to
158	158	18 be paid;
159	159	19 (ii) dividing the resulting amount by the
160	160	20 number of months in the taxable year ending before
161	161	21 the month in which such installment date falls;
162	162	22 and
163	163	23 (iii) deducting from such amount the standard
164	164	24 exemption allowable for the taxable year, such
165	165	25 standard exemption being determined as of the last
166	166	26 date prescribed for payment of the installment.
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175	175	3 In the case of the following The applicable
176	176	4 required installments: percentage is:
177	177	5 1st .............................. 22.5%
178	178	6 2nd ............................... 45%
179	179	7 3rd ............................... 67.5%
180	180	8 4th ............................... 90%
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185	185	1 (E) Annualized Net Income; Corporations. For
186	186	2 corporations, net income shall be placed on an
187	187	3 annualized basis by multiplying by 12 the taxable
188	188	4 income
189	189	5 (i) for the first 3 months of the taxable
190	190	6 year, in the case of the installment required to
191	191	7 be paid in the 4th month,
192	192	8 (ii) for the first 3 months or for the first 5
193	193	9 months of the taxable year, in the case of the
194	194	10 installment required to be paid in the 6th month,
195	195	11 (iii) for the first 6 months or for the first 8
196	196	12 months of the taxable year, in the case of the
197	197	13 installment required to be paid in the 9th month,
198	198	14 and
199	199	15 (iv) for the first 9 months or for the first 11
200	200	16 months of the taxable year, in the case of the
201	201	17 installment required to be paid in the 12th month
202	202	18 of the taxable year,
203	203	19 then dividing the resulting amount by the number of
204	204	20 months in the taxable year (3, 5, 6, 8, 9, or 11 as the
205	205	21 case may be).
206	206	22 (3) Notwithstanding any other provision of this
207	207	23 subsection (c), in the case of a federally regulated
208	208	24 exchange that elects to apportion its income under Section
209	209	25 304(c-1) of this Act, the amount of each required
210	210	26 installment due prior to June 30 of the first taxable year
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221	221	1 to which the election applies shall be 25% of the tax that
222	222	2 would have been shown on the return for that taxable year
223	223	3 if the taxpayer had not made such election.
224	224	4 (d) Exceptions. Notwithstanding the provisions of the
225	225	5 preceding subsections, the penalty imposed by subsection (a)
226	226	6 shall not be imposed if the taxpayer was not required to file
227	227	7 an Illinois income tax return for the preceding taxable year,
228	228	8 or, for individuals, if the taxpayer had no tax liability for
229	229	9 the preceding taxable year and such year was a taxable year of
230	230	10 12 months. The penalty imposed by subsection (a) shall also
231	231	11 not be imposed on any underpayments of estimated tax due
232	232	12 before the effective date of this amendatory Act of 1998 which
233	233	13 underpayments are solely attributable to the change in
234	234	14 apportionment from subsection (a) to subsection (h) of Section
235	235	15 304. The provisions of this amendatory Act of 1998 apply to tax
236	236	16 years ending on or after December 31, 1998.
237	237	17 (e) The penalty imposed for underpayment of estimated tax
238	238	18 by subsection (a) of this Section shall not be imposed to the
239	239	19 extent that the Director or his or her designate determines,
240	240	20 pursuant to Section 3-8 of the Uniform Penalty and Interest
241	241	21 Act that the penalty should not be imposed.
242	242	22 (f) Definition of tax. For purposes of subsections (b) and
243	243	23 (c), the term "tax" means the excess of the tax imposed under
244	244	24 Article 2 of this Act, over the amounts credited against such
245	245	25 tax under Sections 601(b) (3) and (4).
246	246	26 (g) Application of Section in case of tax withheld under
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257	257	1 Article 7. For purposes of applying this Section:
258	258	2 (1) tax withheld from compensation for the taxable
259	259	3 year shall be deemed a payment of estimated tax, and an
260	260	4 equal part of such amount shall be deemed paid on each
261	261	5 installment date for such taxable year, unless the
262	262	6 taxpayer establishes the dates on which all amounts were
263	263	7 actually withheld, in which case the amounts so withheld
264	264	8 shall be deemed payments of estimated tax on the dates on
265	265	9 which such amounts were actually withheld;
266	266	10 (2) amounts timely paid by a partnership, Subchapter S
267	267	11 corporation, or trust on behalf of a partner, shareholder,
268	268	12 or beneficiary pursuant to subsection (f) of Section 502
269	269	13 or Section 709.5 and claimed as a payment of estimated tax
270	270	14 shall be deemed a payment of estimated tax made on the last
271	271	15 day of the taxable year of the partnership, Subchapter S
272	272	16 corporation, or trust for which the income from the
273	273	17 withholding is made was computed; and
274	274	18 (3) all other amounts pursuant to Article 7 shall be
275	275	19 deemed a payment of estimated tax on the date the payment
276	276	20 is made to the taxpayer of the amount from which the tax is
277	277	21 withheld.
278	278	22 (g-5) Amounts withheld under the State Salary and Annuity
279	279	23 Withholding Act. An individual who has amounts withheld under
280	280	24 paragraph (10) of Section 4 of the State Salary and Annuity
281	281	25 Withholding Act may elect to have those amounts treated as
282	282	26 payments of estimated tax made on the dates on which those
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293	293	1 amounts are actually withheld.
294	294	2 (i) Short taxable year. The application of this Section to
295	295	3 taxable years of less than 12 months shall be in accordance
296	296	4 with regulations prescribed by the Department.
297	297	5 The changes in this Section made by Public Act 84-127
298	298	6 shall apply to taxable years ending on or after January 1,
299	299	7 1986.
300	300	8 (Source: P.A. 96-1496, eff. 1-13-11; 97-507, eff. 8-23-11;
301	301	9 97-636, eff. 6-1-12.)
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