Part 100: INCOME TAX

Section 100.5050 Frivolous Returns a) In addition to any other penalty provided by the IITA, there is imposed a penalty of $500 upon any individual who files a purported return that does not contain information from which the substantial correctness of the stated tax liability ca…

Section 100.5060 Reportable Transactions (IITA Section 501(b)) a) Requirement to Disclose Participation in Reportable Transactions 1) In general. For each taxable year in which a taxpayer is required to make a disclosure statement under Treasury Regulations Section 1.6011-4 (26 C…

Section 100.5070 List of Investors in Potentially Abusive Tax Shelters and Reportable Transactions a) Requirement to Furnish List of Investors in Potentially Abusive Tax Shelters 1) In General. For the period beginning July 30, 2004 and ending October 22, 2004, under IITA Section…

Section 100.5080 Registration of Tax Shelters (IITA Section 1405.5) a) Requirement to Register Tax Shelters and Listed Transactions. 1) For the period beginning July 30, 2004 and ending October 22, 2004, under IITA Section 1405.5(a), any tax shelter organizer required to register…

Section 100.5100 Composite Returns: Eligibility (IITA Section 502(f)) a) In General. A composite return may be filed on behalf of nonresident individuals, trusts, and estates who derive income from Illinois and who are partners, or subchapter S corporation shareholders, or who tr…

Section 100.5110 Composite Returns: Responsibilities of Authorized Agent a) Authorized Agent. If a composite return is filed, it shall be signed by a general partner in the case of partnership income, a corporate officer in the case of S Corporation income, or an attorney-in-fact…

Section 100.5120 Composite Returns: Individual Liability Notwithstanding the assumption of liability by the authorized agent, the persons included in a composite return will continue to remain liable for any unpaid liability attributable to them in their separate capacities. The …

Section 100.5130 Composite Returns: Required forms and computation of Income (IITA Section 502(f)) a) Composite Returns of Partners and Shareholders 1) Required form and information. Composite returns of shareholders and partners shall be filed using forms prescribed by the Depar…

Section 100.5140 Composite Returns: Estimated Payments No estimated payments are required to be made for taxes reported on a composite return. (Source: Amended at 33 Ill. Reg. 2306, effective January 23, 2009)

Section 100.5150 Composite Return: Tax, Penalties and Interest The amount of tax due shall be based on the amount of income properly shown on the return, and, for taxable years ending on or after December 31, 2009, may be reduced by any share of any credit earned under Article 2 …

Section 100.5160 Composite Returns: Credits on Separate Returns When the income of a taxpayer is included in a composite return pursuant to an approved petition under Section 100.5100(c) or, for taxable years ending prior to December 31, 1999, by a Lloyd's plan of operation or, f…

Section 100.5170 Composite Returns: Definition of a "Lloyd's Plan of Operation" For purposes of these composite return regulations, a "Lloyd's plan of operation" is a plan of insurance by contract where members of an association which is not incorporated agree to indemnify each o…

Section 100.5180 Composite Returns: Overpayments and Underpayments a) When an authorized agent has made an error in determining the amount of any item of income, deduction, addition, subtraction or credit reported on a composite return, the authorized agent shall file an amended …

Section 100.5200 Filing of Combined Returns For a number of years, Illinois corporate taxpayers that were members of a unitary business group were able to elect to file combined returns. Section 100.5205 provides guidance for the tax years for which this election was available. T…

Section 100.5201 Definitions and Miscellaneous Provisions Relating to Combined Returns a) In general. These definitions and provisions apply to this Subpart Q. b) Combined apportionment. The term "combined apportionment" shall have the same meaning as provided in IITA Section 304…

Section 100.5205 Election to File a Combined Return a) Effective date. The provision allowing corporations to elect to be treated as a single taxpayer was in effect for taxable years ending on or after December 31, 1985, and before December 31, 1993. b) Scope of the election. Pur…

Section 100.5210 Procedures for Elective and Mandatory Filing of Combined Returns a) Conditions of the election and election procedures. This subsection (a) applies to taxable years ending on or after December 31, 1985 and prior to December 31, 1993. 1) Conditions A) The election…

Section 100.5215 Filing of Separate Unitary Returns (IITA Section 304(e)) a) Not every member of a unitary business group is eligible to join in the filing of a combined return and, for taxable years ending prior to December 31, 1993, joining in the filing of a combined return wa…

Section 100.5220 Designated Agent for the Members (IITA Section 304(e)) a) Qualification. The controlling corporation of a combined group is the designated agent for the group if the controlling corporation is a member of the combined group. Otherwise, the members of the combined…

Section 100.5230 Combined Estimated Tax Payments a) In general. If a combined return is filed for two consecutive taxable years, payments of estimated tax must be made on a combined basis for each subsequent taxable year, until such time as separate returns are properly filed. Fo…

Section 100.5240 Claims for Credit of Overpayments a) In general. If a taxpayer becomes a member of a combined group during a common taxable year, any requested credit carryforward shown on its separate return for the taxable period ending with its entry into the combined group s…

Section 100.5250 Liability for Combined Tax, Penalty and Interest a) Joint and several liability of members of a combined group. The members of a combined group shall be jointly and severally liable for the combined tax, penalty and interest computed in accordance with this Subpa…

Section 100.5260 Combined Amended Returns a) In general. The election or requirement to be treated as a single taxpayer applies to any amended return which includes the same taxpayers of the unitary business group which joined in the filing of the original return. b) No election.…

Section 100.5265 Common Taxable Year a) The common taxable year of a combined group shall be the taxable year of the designated agent. However, if a combined group has been using the taxable year of the member of the combined group that, as of the time the combined group becomes …

Section 100.5270 Computation of Combined Net Income and Tax (IITA Section 304(e)) a) Determination of Base Income. The combined base income shall be determined by first computing the combined group's combined taxable income and then modifying this amount by the combined group's c…

Section 100.5280 Combined Return Issues Related to Audits a) If, on audit, the Department determines that two or more corporations are members of a unitary business group for which no combined return was filed: 1) For taxable years ending on or after December 31, 1985 and before …

Section 100.6000 Payment on Due Date of Return (IITA Section 601) a) Except as provided in subsection (b), every taxpayer required to file a return under the IITA shall, without assessment, notice or demand, pay any tax due thereon to the Department on or before the date fixed fo…

Section 100.7000 Requirement of Withholding (IITA Section 701) a) General rules. Every employer maintaining an office or transacting business within this State and required under the provisions of 26 USC 3401 through 3404 to withhold and pay federal income tax on compensation pai…

Section 100.7010 Compensation Paid in this State (IITA Section 701) a) Except as provided in this Section, or in Section 100.7090 with respect to reciprocal withholding exemption agreements for employees residing in certain states, withholding is required with respect to "compens…

Section 100.7020 Transacting Business Within This State (IITA Section 701) a) General rules. The phrase "employer transacting business within this State" includes any employer having or maintaining within this State, directly or by a subsidiary, an office, distribution house, sal…

Section 100.7030 Payments to Residents (IITA Section 701) a) In General 1) Any payment to an Illinois resident as an employee or otherwise by any payer maintaining an office or transacting business in this State shall be subject to withholding of Illinois income tax if those paym…

Section 100.7034 Investment Partnership Withholding (IITA Section 709.5) a) In General. For taxable years ending on and after December 31, 2023, a taxpayer that is an investment partnership, as defined in IITA Section 1501 and Section 100.9730, and is a member of one or more othe…

Section 100.7035 Nonresident Partners, Subchapter S Corporation Shareholders, and Trust Beneficiaries (IITA Section 709.5) a) In General. For each taxable year ending on or after December 31, 2008, every pass-through entity must withhold from each nonresident owner an amount equa…

Section 100.7036 Withholding of Lottery, Gambling and Sports Wagering Winnings (IITA Section 710) a) In General 1) Any person making a payment to a resident or nonresident of winnings under the Illinois Lottery Law and not required to withhold Illinois income tax from the payment…

Section 100.7040 Employer Registration (IITA Section 701) Every employer required to deduct and withhold Illinois income tax must register with the Department of Revenue. Each registration application of an employer that has been assigned a federal identification number must cont…

Section 100.7050 Computation of Amount Withheld (IITA Section 702) a) Amount Withheld. Every employer required to deduct and withhold a tax on compensation paid in Illinois to an individual shall deduct and withhold for each payroll period an amount equal to the tax rate in effec…

Section 100.7060 Additional Withholding (IITA Section 701) a) General rule. If an employee has other income subject to the Illinois income tax in addition to compensation subject to withholding, he may wish to increase his withholding in order to avoid the necessity of being requ…

Section 100.7070 Voluntary Withholding (IITA Section 701) Any individual receiving periodic payments may enter into an agreement with the payor to provide for withholding of Illinois income tax on those payments. An agreement under this section between the payor and the individua…

Section 100.7080 Correction of Underwithholding or Overwithholding (IITA Section 701) a) Underwithholding. If an employer erroneously underwithholds an amount of Illinois income tax required to be deducted and withheld from compensation paid to an employee within a payroll period…

Section 100.7090 Reciprocal Agreement (IITA Section 701) a) General rule. The Director may enter into an agreement with the taxing authorities of any state which imposes a tax on or measured by income to provide that compensation paid in such state to residents of Illinois shall …

Section 100.7095 Cross References See IITA Sections 1002(c) and 1002(d), the UPIA and 86 Ill. Adm. Code 700 for penalties relating to the failure to deduct and withhold a tax as required by IITA Section 701. See 86 Ill. Adm. Code 100.7120 for provisions relating to claiming exemp…

Section 100.7100 Withholding Exemption (IITA Section 702) a) General Rules. An employee is entitled to a withholding exemption equal to the basic amount under IITA Section 204 and Section 100.2055 of this Part multiplied by the number of withholding exemptions to which he or she …

Section 100.7110 Withholding Exemption Certificate (IITA Section 702) a) In general. On or before the date on which an individual commences employment with an employer, the individual shall furnish the employer with a signed Illinois withholding exemption certificate relating to …

Section 100.7120 Exempt Withholding Under Reciprocal Agreements (IITA Section 702) a) In general. Employees who are residents of a state with which a reciprocal agreement is in effect exempting residents of that state from withholding of Illinois tax on compensation paid in Illin…

Section 100.7200 Reports For Employee (IITA Section 703) a) In general. Every employer required to deduct and withhold tax under the Act from compensation of an employee, or who would have been required to deduct and withhold tax if the employee's properly claimed withholding exe…

Section 100.7300 Returns and Payments of Income Tax Withheld from Wages (IITA Sections 704 and 704A) a) Quarterly Returns. Except as otherwise provided in Section 100.7310 or 100.7350, every employer required to deduct and withhold tax on compensation paid in Illinois shall make …

Section 100.7310 Returns Filed and Payments Made on Annual Basis (IITA Sections 704 and 704A) a) With respect to taxes withheld or required to be withheld prior to January 1, 2008: 1) In general. Effective January 1, 2005, if an employer had no obligation to deduct and withhold I…