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This bulletin is written to inform you
of recent changes; it does not replace
statutes, rules and regulations, or
This bulletin provides information for individuals, trusts, estates, and
• recent income tax rate changes,
• how estimated payments are affected by the income tax rate change,
• how fi scal-year fi lers, short-year fi lers, and 52/53 week fi lers will
calculate their income tax rate, and
• changes to Illinois net loss deductions.
What are the new rates?
• For individuals, trusts, and estates, the Illinois Income Tax is
increasing from 3 percent (.03) to 5 percent (.05).
• For corporations (excluding S corporations), the Illinois Income Tax is
increasing from 4.8 percent (.048) to 7 percent (.07).
When are the new rates effective?
The new tax rates are effective for income received on or after
January 1, 2011.
How are estimated payments and the underpayment for
estimated tax penalty affected?
If you are required to make estimated payments for income received on
or after January 1, 2011, you will be required to make the payments at the
higher tax rate. The worksheets for Forms IL-1040-ES and IL-1120-ES
refl ect the new rates.
If you received your preprinted 2011 Form IL-1120-ES from the
U.S. Postal Service, the old rate is printed on the worksheets. You may
wish to use the worksheet on the version of the form found on our web site.
For installments of estimated tax due before February 1, 2011, the law
requires that you timely pay the lesser of 100 percent of the prior year’s tax
liability or 90 percent of the current year’s tax liability in order to avoid an
underpayment of estimated tax late payment penalty.
However, for payments due on or after February 1, 2011, and before
February 1, 2012, an underpayment of estimated tax late payment penalty
To: All tax practitioners and individuals
and businesses required to pay Illinois
Illinois Income Tax Increase
Brian Hamer, Director
Illinois Department of Revenue
Printed by authority of the State of Illinois
copies - 02/11 - P.O. Number 2110462