How does Illinois tax a Limited Liability Company (LLC)?

If you are an LLC, the tax return you file with Illinois depends on how you have elected to be treated with the IRS.

• If the LLC is a disregarded entity for federal income tax purposes, so that its income, deductions, and other items are reported on the federal income tax return of its owner, its income, deductions, and other items will be reported on the Illinois return of its owner. The LLC has no Illinois income tax filing requirements. For example, if the LLC is treated as a sole proprietorship for federal tax income tax purposes and its income is reported on its owner's U.S. Form 1040, U.S. Individual Income Tax Return, for Illinois purposes the LLC's income will be reported on its owner's  Form IL-1040, Illinois Individual Income Tax Return.
• If the LLC is a partnership for federal income tax purposes, and files U.S. Form 1065, U.S. Return of Partnership Income, for Illinois purposes the LLC will file  IL-1065, Illinois Partnership Replacement Tax Return.  Each partner should receive a  Schedule K-1-P, Partner's Share of Income, Deductions, Credits, and Recapture, indicating what amounts will flow to the partner's Illinois income tax return.
• If the LLC is a corporation for federal income tax purposes, and files a U.S. Form 1120, U.S. Corporation Income Tax Return, for Illinois purposes the LLC will file Form  IL-1120, Corporation Income and Replacement Tax Return.
• If the LLC is a subchapter S Corporation for federal income tax purposes, and files a U.S. Form 1120S, U.S. Income Tax Return for an S Corporation, for Illinois purposes the LLC will file Form  IL-1120-ST, Illinois Small Business Corporation Replacement Tax Return.  Each shareholder should receive a  Schedule K-1-P, Partner's Share of Income, Deductions, Credits, and Recapture, indicating what amounts will flow to the partner's Illinois income tax return.