The Illinois Department of Revenue (“IDOR”) has changed several rules to assist business taxpayers during the COVID-19 health emergency. These amended requirements, summarized below, are designed to provide short-term relief and flexibility to business taxpayers in the state.

Illinois Income Tax Filing and Payment Extension (issued March 25, 2020)

The deadline for all taxpayers, including corporations and trusts, to file and pay state income taxes has been extended until July 15, 2020. No interest or penalties will accrue on tax liabilities paid by the extended deadline. This extension, however, does not affect the first or second quarterly installments of estimated payments for 2020 taxes due by April 15 and June 15, respectively.

Changes to Estimated Payment Requirements (issued April 2, 2020)

Businesses that take advantage of the extended income tax filing deadline for 2019 liabilities might have difficulty estimating their quarterly taxes for 2020 based on the usual calculations. But corporations that reasonably expect to have an Illinois income and replacement tax and surcharge liability of more than $400 for the 2020 tax year are still required to make these estimated payments, as noted above.

To accommodate this reality, IDOR is providing an additional method for calculating 2020 estimated tax payments: based on one hundred percent (100%) of the actual liability for tax year 2018. Corporations that make timely estimated tax payments using this alternative calculation will avoid late payment penalties.

For direction on calculating a corporation’s estimated payment amount based on 2018 tax liability, see Appendix B of the Form IL-1120 Instructions (for most corporations), or Appendix A of the Form IL-990-T Instructions (for non-profit organizations exempt from federal income tax under Internal Revenue Code § 501(a)).

Short-Term Relief from Penalties for Late Sales Tax Payments (issued March 19, 2020)

For eating and drinking establishments that incurred a total sales tax liability of less than $75,000 in calendar year 2019, IDOR is waiving any penalty and interest that would have been imposed on late payments of sales tax due for the reporting periods of February, March, and April 2020.

To obtain this waiver, qualified establishments must pay one quarter (1/4) of their sales tax liabilities for these reporting periods on or before each of the following dates: May 20; June 22; July 20; and August 20, 2020.

Relief for Renewals of Illinois Sales Tax Exemption (“E”) Numbers (issued May 1, 2020)

For organizations with Illinois sales tax exemption (“E”) numbers that expire in this year, IDOR is automatically extending these certificates through December 31, 2020.

Short-Term Relief for Penalty and Interest for 1Q2020 IFTA Return (issued April 21, 2020)

For first quarter International Fuel Tax Agreement returns due on April 30, 2020, IDOR is waiving penalties and interest through May 26, 2020, provided the return is filed by that date.

Rathje Woodward advises clients on a broad range of business law issues, including corporate governance, organization, mergers and acquisitions, strategic tax planning, intellectual property protection, and labor and employment matters. If you have questions about how these new Illinois tax rules may impact your business, contact our office at 630-668-8500. Our online contact form may be found here.

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