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Illinois LLC and INC Annual Filing Requirements
Starting a new business means going through several requirements and processes related to the registration of that entity and making it operational. There are other processes and requirements that a company needs to fulfill in the state of incorporation. If you form an LLC then you will need to be compliant with Illinois LLC annual requirements and the same is true for corporations. This guide has been created to provide insight into how you can best maintain various compliances. You will get an overview of how to file the Illinois corporation annual report or LLC annual report, business taxes, employer taxes, and other annual requirements among others.
Illinois LLC Annual Filing Requirements
The annual requirements for an Illinois limited liability company are governed by the Illinois Compiled Statutes, Chapter 805 – Business Organizations, 805 ILCS 180 – Limited Liability Company Act. The Illinois LLC annual requirements may be different from those of other forms of entities being formed in this state. If you are planning to form a limited liability company then the important annual requirements are categorized as under.
Illinois LLC Annual Report
When you form a limited liability company (LLC) in Illinois, you realize that there are great benefits like protection of your personal assets and pass-through taxation. Simultaneously, operating an LLC also means that you will have to fulfill several ongoing compliance responsibilities like filing LLC taxes in Illinois and submitting annual reports. These responsibilities are applicable to both domestic and foreign LLCs. One of the most important Illinois LLC annual requirements is that of filing the annual report.
The format of the Illinois LLC annual report remains more or less the same across all US states. This report contains basic company information like the name and address of your registered agent as well as members and managers of the company. You will need to submit the annual report form LLC 50.1: Limited Liability Company Annual Report pursuant to 805 ILCS 180/Art.-50 heading. This has to be submitted to the Illinois Secretary of State – Business Services Department along with a fee of $75 plus $1.69 (transaction fee).
Normally, the due date for an Illinois LLC annual report is by the end of the month prior to the registration anniversary month.
Example: If you registered your limited liability company or foreign LLC on December 21, 2024, then your annual report will be due on November 30, 2025. You can file the report almost up to 60 days prior to this anniversary date.
It is important to note that if you fail to meet this Illinois LLC annual requirement, then there can be a penalty of $100 if you are 60 days late. Alternatively, if you hire IncParadise as your Illinois Registered Agent then you will be able to file the annual report on time using our entity management software. This software will send email notifications automatically, a month prior to the due date for filing the report.
Do you want to file an Illinois Annual Report for your LLC?
Illinois LLC Taxes
As an entrepreneur in Illinois, it becomes essential for you to understand the various taxes that may be applicable to your Limited Liability Company. If you fail to comply with LLC taxes in Illinois requirements then this may lead to heavy penalties and even cause legal issues. According to the Illinois Department of Revenue, the most important of all taxes for an LLC is the personal income tax. This is because a Limited Liability Company is considered a pass-through entity and hence the company will not be required to pay taxes. Instead, you as the owner or member will file individual income tax at a flat 4.95 percent. This rate will remain the same irrespective of your income.
The Illinois LLC annual requirements pertaining to taxes may also vary according to the tax identity chosen by you. If you want your LLC to be taxed as a C-Corporation then each member will be required to file corporate income tax in this state at a rate of 9.5 percent.
Illinois Employer Taxes
Your company may be subjected to different types of LLC taxes in Illinois. If you have started a company and are the owner then you will be required to file Illinois LLC self-employment tax. If you have employees and are giving wages or payroll then you may need to file state employer taxes like unemployment insurance tax. Let’s take a look at these taxes.
- Self-Employment tax – This is one of the important LLC taxes in Illinois and each member of your LLC needs to file it. Self-employment taxes have to be filed on your share of the profits at a rate of 12.4 percent for Social Security and 2.9 percent for Medicare.
- Unemployment Insurance (UI) Tax – The unemployment insurance tax is considered to be a variable tax as the rates may increase or decrease depending on the overall economic condition of the market or state. If unemployment is low and there is a higher number of businesses paying the tax rates will drop and vice-versa. This is one of the important Illinois LLC annual requirements and currently the UI tax rates vary from 0.525 to 7.1 percent.
Illinois Sales and Use Tax
Apart from an Illinois LLC annual report, one of the important state requirements is that of filing sales and use tax. Most states in the USA have some form of sales and local taxes. In Illinois, if you or your LLC engages in a business activity that involves sale and use of any tangible personal property then you will be required to file this tax. This is one of the most common LLC taxes in Illinois and has to be filed by in-state retailers and out-of-state sellers.
There are several sub categories of taxes that you may need to file depending on business activity like the Retailers’ Occupation Tax, Service Occupation Tax, Service Use Tax, and Use Tax. Currently the sales tax rate is 6.25 percent statewide while the use tax or local tax is not more than 4.75 percent. The average combined sales tax rate in this state is 8.85 percent.
Illinois Corporation Annual Filing Requirements
A C Corporation is one of the most favored forms of business in the state of Illinois. There are several processes that you will need to undergo right from incorporation to applying from necessary business licenses and permits. Apart from all this, you will also need to fulfill Illinois Corporation annual requirements. These requirements are important as they will ensure your company enjoys a good standing in this state. The annual requirements of corporations are governed by the Illinois Compiled Statutes, Chapter 805 – Business Organizations, Business Corporation Act of 1983. Let’s look in detail at all important annual requirements including corporation taxes in Illinois.
Illinois Corporation Annual Report
Once you have incorporated your new business in the state of Illinois, you will need to be compliant with all state requirements. Compliance with all annual state requirements will ensure your company enjoys a good standing in the state. One of the important Illinois Corporation annual requirements is that of filing an annual report. It is an important business filing that is required by most states in the USA. It is typically filed with the secretary of state.
What does it include and how to file it?
Generally speaking, a corporation has to report to the state if there are any changes to their physical or corporate address, change of registered agent, and even ownership and officers. Some states may require additional information about a company like stock, assets, and paid-in capital. When you file an Illinois corporation annual report, all such important information is included in it. It is important to note that both domestic and foreign corporations have to file this report as a part of Illinois Corporation’s annual requirements.
You will need to file the annual report using the form BCA 14.05 D: Domestic Corporation Annual Report. A foreign corporation will be required to use the form BCA 14.05 FOR: Foreign Corporation Annual Report. If your company has more than 100 employees in Illinois then you will also be required to file an EEO-1 and attach section D of your EEO-1 along with the IL annual report.
What is the due date for filing?
Once you have incorporated your company, you will need to file an Illinois annual report pursuant to 805 ILCS 5/14.05. This report has to be filed with the Illinois Secretary of State – Business Services Department. You will need to file an Illinois corporation annual report each year by the end of the month prior to the incorporation anniversary month.
Example: If you have incorporated your domestic or foreign company on November 22, 2024, then your annual report will be due on October 31, 2025. You can file the report almost up to 60 days prior to this anniversary date.
The filing fee of this report will be $75 plus a $1.69 transaction fee. You will also need to file variable franchise taxes along with the fee.
Penalties if fail to file
You have to file an Illinois corporation annual report within or prior to the due date to avoid any penalties. There will be a late fee that is normally calculated based on franchise tax that is due on the date you are filing this report. In fact, if this report is not filed within sixty days of your annual report due date then you will receive a notice from the state. The notice states that if you are not able to comply then your entity may be administratively dissolved within a period of 60 days.
If you have hired IncParadise as your Registered Agent for Illinois Corporation then you can take advantage of our entity management software. This software will help you to file an Illinois corporation annual report on time. The software will send email notification a month prior to the due date. Thus, it will help in ensuring your company is compliant with Illinois Corporation’s annual requirements.
Thinking of filing an Annual Report for your Illinois Corporation?
Illinois Corporation Taxes
One of the important Illinois Corporation annual requirements is that of corporation taxes. Illinois is one of the thirty two states to have a flat corporate income tax. In fact, the flat tax rate is also one of the highest in the nation at 9.5 percent. This tax rate includes a 7 percent business income tax rate as well as a Personal Property Replacement Tax of 2.5 percent. The replacement tax is one of the important Corporation taxes in Illinois and will be levied on the net income of your company.
Apart from this, a corporation will be subjected to Withholding Tax at a rate of 4.95 percent. You will also need to file an Unemployment Insurance Tax if your company has paid $1,500 in wages within a single calendar quarter.
Illinois Sales and Use Tax
One of the important forms of corporation taxes in Illinois is the sales and use tax. As the name suggests, sales tax has to be filed only if a corporation indulges in selling or buying specific products and services. If your corporation is involved in the following then you will need to register with the Illinois Department of Revenue (IDOR).
- If you have a business nexus in Illinois
- If you are selling taxable goods or services to residents in Illinois
- If your buyers are required to file sales tax in this state
You will be required to file this type of corporation taxes in Illinois even if you are a marketplace seller, marketplace facilitator, or even a reseller. The average combined Illinois sales tax rate is 8.85 percent. Illinois currently has a use tax rate of 6.25 percent.
Need any Assistance in Filing the Illinois Corporation Annual Report?
The Illinois Corporation’s annual requirements or that of an LLC are quite important forms of compliance. Each new and existing entity needs to fulfill or meet these requirements. If your business fails to maintain compliance then it can lead to heavy penalties and even dissolution.
IncParadise as your registered agent in Illinois can assist you with your annual filing requirements. We are an expert in new business formation services and can help you with your Illinois LLC formation or incorporation as well. We also offer many additional services like EIN, and foreign qualifications among others.