Corporate Income Tax

Statutory Reference

Definition

The Illinois Income Tax is imposed on every corporation earning or receiving income in Illinois. The tax is calculated by multiplying net income by a flat rate. The Illinois Income Tax is based, to a large extent, on the federal income tax code.

Tax rate

Corporations pay 4.8 % income tax and 2.5% replacement tax.

Tax base

The starting point for the Illinois Corporate Income Tax Return is federal taxable income, which is income minus deductions. Next, the federal taxable income is changed by adding back certain items (e.g., state, municipal, and other interest income excluded from federal taxable income) and subtracting others (e.g., interest income from U.S. Treasury obligations). The result is “base income.”

Filing Requirements

You must file Form IL-1120 if you are a corporation that

has net income or loss as defined under the IITA; or
is qualified to do business in the state of Illinois and is required to file a federal income tax return (regardless of net income or loss).

Returns
Corporations must file Form IL-1120, Illinois Corporation Income and Replacement Tax Return, annually by the 15th day of the 3rd month following the close of the taxable year.

Automatic seven-month filing extension
We grant you an automatic seven-month extension of time to file your corporate tax return. You are not required to file Form IL-505-B, Automatic Extension Payment, in order to obtain this automatic extension. However, if you expect tax to be due, you must use Form IL-505-B to pay any tentative tax due in order to avoid interest and penalty on tax not paid by the original due date of the return. An extension of time to file your Form IL-1120 does not extend the amount of time you have to pay your Illinois tax liability.

Estimated payments Corporations — Corporations (other than S corporations) who can reasonably expect their income and replacement tax liability to be more than $400 must make quarterly estimated payments. Estimated Payments are due on the 15th day of the 4th, 6th, 9th, and 12th months of the tax year. Corporations who mail estimated tax payments must complete Form IL-1120-ES, Estimated Income and Replacement Tax Payment for Corporations.

NOTE: Electronic funds transfer program participants do not complete Form IL-1120-ES.

What if I need to correct or change my return?

Corrected - If you need to correct or change your return after it has been filed, but before the automatic extension due date has passed, you must file Form IL-1120-X, Illinois Amended Corporation income and Replacement Tax Return. Mark the form "CORRECTED" at the top and show the changes. Any correction made may cause a recalculation of penalties and interest.
Amended - If you need to correct or change your return after it has been filed, and the automatic extension due date has passed, you must file Form IL-1120-X showing the changes.

For more information refer to the IL-1120-X Instructions.