State Tax Changes Effective January 1, 2022 – Tax Foundation

Under S.B. 2531 signed by Governor J.B. Pritzker (D) on August 27, 2021, Illinois will allow partnerships and S corporations to elect to be taxed as an entity. The election may be made for tax years starting on or after January 1, 2022 and before January 1, 2026. Illinois, in addition to its statutory income tax rate of 4.95 percent, also has a 1.5 percent “personal property replacement tax,” an additional income tax that is imposed on pass-through businesses, originally to offset revenue from the repeal of tangible property taxes. This additional tax remains in place.