For trusts, income tax is 4.95 (.0495) for income received of accrued for replacement tax, the rate is 1.5 percent (.015) of net income. For corporations, income tax is 7 percent (.07) for income received or accrued for replacement tax, the rate is 2.5 percent (.025) of net income. Therefore, exempt organizations pay both Illinois Income Tax and the Personal Property Replacement Tax, but the rates differ. Estates do not pay replacement tax.Įxempt organizations may be formed as either a corporation or a trust. Trusts also pay replacement tax of 1.5 percent (.015). Trusts and estates pay 4.95 percent (.0495) income tax. See our Pass-through Entity Information (Publication 129) web page for more information. The S corporation or partnership electing to pay pass-through entity tax would then distribute a credit to each shareholder or partner in an amount equal to 4.95 (.0495) times the shareholder's or partner's distributive share of net income. The pass-through entity tax rate is 4.95 (.0495). This is a starting point for calculating Illinois Income Tax.Īdditionally, for the tax years ending on or after December 31, 2021, and beginning before January 1, 2026, S corporations and partnerships (other than a publicly traded partnership under Section 7704 of the Internal Revenue Code) may elect to pay pass-through entity tax on their net income for the privilege of earning or receiving income in Illinois. The shareholders or partners must include this income in their federal adjusted gross income (for individuals) or federal taxable income (for other taxpayers). Generally, income from an S corporation or partnership is passed on to the shareholders or partners. S corporations and partnerships do not pay Illinois Income Tax. Subchapter S corporations and partnerships pay replacement tax of 1.5 percent (.015).

Corporations, other than S corporations, pay 7 percent (.07) income tax and 2.5 percent (.025) replacement tax.

2022 tax brackets irs