LLC Annual Report and Tax Filing Requirements in Illinois

Running a business in Illinois means you have to follow ongoing legal requirements. An Illinois limited liability company (LLC) has annual report obligations as well as tax filings specific to the LLC's tax structure and business activities.

This article covers how to file your annual report and the various taxes your business might be responsible for. If you have legal questions specific to your LLC, talk to a business attorney. If you need more guidance, check out our section on running an LLC.

Illinois LLC Annual Report

The State of Illinois requires you to file an annual report for your LLC. Most LLCs will be able to file the annual report online at the Secretary of State website. However, you must file your report by mail if your LLC has:

• been administratively dissolved or revoked
• withdrawn, terminated, or expired
• more than eight managers
• managers not qualified to transact business in Illinois
• changes to its name, duration, or purpose
• changes to the name or address of its registered agent, or
• to execute the report by layered signatures or by power of attorney.

To submit your report, complete Form LLC-50.1.

The report is due each year by the first day of the month in which your LLC was created. For example, if your LLC was created on July 17, then your report would be due by July 1. As of 2023, the filing fee is $75. Filing a report late (more than 60 days after the due date) incurs an additional $100 penalty.

State Business Taxes in Illinois

By default, LLCs are treated as pass-through tax entities. So, the income taxes pass through the LLC to the individual LLC owners (members). The LLC owners then pay taxes on their share of the income they receive through the business. You'll pay business taxes to the Illinois Department of Revenue (IDOR).

Electing corporate tax status. LLCs that elect to be taxed as corporations at the federal level will be taxed as corporations at the state level in Illinois. The LLC will file Form IL-1120, Corporation Income and Replacement Tax Return with the IDOR. The income tax rate for Illinois, as of 2023, is 7% of net income. If your business elects to be taxed as a corporation, you might need to pay additional taxes that apply to corporations.

Must pay personal property replacement tax (PPRT). Illinois requires corporations, S corporations, partnerships, and trusts to pay a PPRT. The money collected by the state government is paid to local governments. Because LLCs are usually classified as partnerships, corporations, or S corporations, they'd be responsible for paying this tax. As of 2023, for partnerships the tax rate is 1.5% and for corporations, the tax rate is 2.5%. (For more, visit the PPRT section of the IDOR website.)

You can find more information about how LLCs are taxed on the IDOR website or in our article about Illinois business income tax.

Illinois Employer Taxes

If your Illinois business has employees, then you'll probably need to pay employer taxes. You'll pay federal employer taxes to the government—namely, Social Security and Medicare taxes. Illinois also requires you to report and pay state taxes as an employer.

Withholding employee wages. You'll need to withhold and pay employee income taxes to the IDOR. Register your business with the IDOR online through MyTax Illinois. Once you've registered, you can make periodic tax payments—either semiweekly or monthly—with Form IL-501, Withholding Payment Coupon. In addition to making periodic payments, you'll also need to report your withholding using Form IL-941, Illinois Withholding Income Tax Return every quarter. (Check the withholding income tax section of the IDOR website for more details.)

Unemployment insurance (UI) tax. Register with the Illinois Department of Employment Security (IDES) using MyTax Illinois. You'll need to file monthly or quarterly UI contribution and wage reports. You'll use Form UI-3/40 to pay contributions each quarter. (Visit the IDES website for more information on how to report and pay your UI tax.)

Illinois Sales and Use Tax

Illinois requires you to collect and report sales tax to the IDOR. In Illinois, the term "sales tax" refers to occupation taxes levied on retailer's receipts and use taxes that are paid by customers. Most retailers will use Form ST-1 to report and pay sales tax. You'll make periodic payments—either monthly, quarterly, or annually.

Review the sales and use taxes section of the IDOR website for information about tax types, tax rates, exemptions, filing and payment requirements, as well as forms and resources.

In addition to state sales tax, you might be responsible for reporting and paying sales and use tax to your city or county. Make sure you check with your local taxing authorities for your reporting responsibilities.

LLC Registration in Other States

Most states require a business that's formed in another state but wants to do business in their state to register to conduct business activities. Each state defines which business activities constitute "doing business" in their state. Additionally, every state has requirements for how an out-of-state business should register with the state and maintain its registration. You should check state laws to determine whether you need to register your business.

For specific guidance, review our state guide to qualifying your foreign business.