Illinois DOR Updates Guidance on Taxability of S Corporations

The Illinois Department of Revenue (DOR) updated the guidance document on tax rules for S corporations. The document explains that S corporations are subject to replacement tax but not Illinois income tax, which is paid at the shareholder level. The document also covers the new elective pass-through entity (PTE) tax at a 4.95 percent rate on net income for tax years 2021-2025, allowing shareholders a corresponding credit on their individual returns. It outlines filing requirements, due dates, estimated payments, and details for amending returns or reporting federal changes. [Ill. Dep’t of Revenue, Subchapter S (Small Business) Corporation, 05/01/25]

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