Illinois · 2027 and beyond
Illinois in 2027 and beyond: what is already law, and what is still open
No statewide tax measure. The 4.95% rate is unchanged; the 2026 budget’s tax changes fall on corporations and stock sellers. What is on the 2026 return, what starts with tax year 2027, and what is scheduled or conditional after that.
By Charles Trautman, EA
Need to Know Tax · written from Illinois Department of Revenue sources and the unofficial November 3 election returns, November 12, 2026 · not yet reviewed by an Illinois practitioner
No statewide tax measure. The 4.95% rate is unchanged; the 2026 budget’s tax changes fall on corporations and stock sellers. This page keeps apart three things that get mixed together in the news: what is on the 2026 return you file in early 2027, what begins with tax year 2027, and what is scheduled, conditional or still undecided after that. Election figures are the unofficial November 3, 2026 returns and are not final until the state certifies them.
What the voters decided on November 3, 2026
No statewide tax measure was on the November 3, 2026 ballot in Illinois. Nothing voted on that day changes a Illinois return.
This return, next year, and later
| When | What applies |
|---|---|
| The 2026 return, filed in early 2027 | The flat rate is 4.95% and the federal deductions taken after AGI do not reach the IL-1040. |
| The pass-through entity tax election is now permanent. | |
| Illinois does not allow 100% bonus depreciation. | |
| The senior assessment freeze income limit is $75,000 for the 2026 assessment year. | |
| Gain on qualified small business stock that the federal return excludes is added back in Illinois, for tax years ending on or after December 31, 2026. | |
| Starting with tax year 2027 | The senior freeze income limit rises to $77,000. |
| A 10% tax on targeted digital advertising revenue above $1 million begins January 1, 2027, paid by ad platforms. | |
| 2028 and later, or conditional | The senior freeze limit is $79,000 from 2028. |
| The cap on corporate net operating loss deductions loosens in steps through 2031. |
Items under 2027 and later do not change the 2026 return. They matter for 2027 withholding, estimated payments and planning. The detail behind each line is in the other Illinois articles.
The 2025 federal law and the Illinois return
Illinois starts from federal adjusted gross income, and the federal changes of 2025 were mostly deductions taken after AGI, so they never arrive. In December 2025 the General Assembly kept Illinois out of the restored federal 100% bonus depreciation.
That is the reason a change on the federal return, such as the deductions for tips, overtime and people 65 and older, may or may not show up on the Illinois return. The federal side is in The new deductions for tips, overtime and seniors.
What to watch
The fiscal 2028 budget in May 2027. The flat rate is in the constitution and can change only by amendment. When something on this page changes, the change is logged on the updates page with its date.
What to bring
- Your 2026 federal and Illinois returns, once filed, to set 2027 withholding and estimated payments against them
- Your last pay stub of 2026 and the first of 2027, to see whether withholding changed
- Any notice from the state about a 2027 rate, credit or filing change
Questions people ask
Does anything here change the Illinois return I file in early 2027?
Only what is listed under the 2026 return. Everything listed under 2027 or later affects withholding, estimated payments and planning, not the return for 2026.
How will I know if this page changes?
Every change is logged on the updates page with its date and the article it affects. State legislatures meet in early 2027 and some act before the filing deadline.
Illinois, after the election
No statewide tax measure. The 4.95% rate is unchanged; the 2026 budget’s tax changes fall on corporations and stock sellers.
Written by Charles Trautman, EA, editor · Need to Know Tax, Lone Tree, Colorado
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Sources and where to check
- BDO: Illinois becomes latest state to address OBBBA rules (SB 1911)
- NPR Illinois: Pritzker signs nearly $56B budget with new business taxes (June 16, 2026)
- Illinois Policy Institute: the $55.9 billion budget and its tax increases
- ISACo: end-of-session summary, June 1, 2026 (SB 3019, P.A. 104-0468)
- Andersen: Illinois expands PTET options, decouples QSBS, extends NOL limits
- KFVS: Illinois farm organizations lobby for estate tax relief (March 31, 2026)
- Rep. Davidsmeyer: Illinois opts out of federal “no tax on tips” rule (Dec. 4, 2025)