Latimer LeVay Fyock, LLCLatimer LeVay Fyock, LLC

Time Running Out on Illinois Tax Amnesty Programs. Are You Eligible?

For taxpayers with outstanding obligations to the Illinois Department of Revenue (IDOR), paying those debts off becomes more expensive by the day as substantial interest and penalties accrue. However, recently signed legislation allows those with pending tax liabilities to square their accounts and avoid these extra costs – as well as spare themselves from potential enforcement action – through three separate tax amnesty programs.

General Tax Amnesty Program

Amendments to the Illinois Tax Delinquency Amnesty Act (HB 2755), signed into law by Gov. JB Pritzker on June 16, 2025, provide a way for taxpayers to pay eligible outstanding tax liabilities and to have penalties and interest waived for taxes paid in full during the designated amnesty period. An eligible tax liability is a liability that was not reported or paid for tax periods ending after June 30, 2018, and prior to July 1, 2024.

The general Illinois Tax Amnesty Program began on October 1, 2025 and extends through November 17, 2025. Eligible tax liabilities and returns must be paid and filed during those dates to qualify for the waiver of penalty and interest.

Taxpayers who are party to any pending criminal investigation or civil or criminal litigation related to nonpayment, delinquency, or fraud in relation to Illinois state taxes will not be eligible to participate in the amnesty. However, taxpayers with civil cases pending in state courts, in administrative hearings, or at the Illinois Independent Tax Tribunal may avail themselves of amnesty so long as the litigation is dismissed before the end of the amnesty period by agreed order entering judgment in favor of IDOR.

Franchise and Remote Retailer Amnesty

In addition to the general amnesty program, the amendments establish two other avenues for wiping the Illinois state tax slate clean without penalties or interest:

  • Franchise Tax Amnesty: This program runs for the same period as the general tax amnesty program and covers outstanding franchise tax or license fee liabilities for periods after June 30, 2019, and on or before June 30, 2025. Taxpayers who are parties to any civil, administrative, or criminal investigation or litigation for nonpayment of franchise tax or license fees, as well as those who have been served with interrogatories from the Department of Business Services, are not eligible to participate.
  • Remote Retailer Amnesty: For outstanding tax liabilities incurred from January 1, 2021, through June 30, 2026,remote (i.e., out-of-state) retailers can obtain a full abatement of penalty and interest for eligible transactions by coming into compliance between August 1, 2026, and October 31, 2026. Taxpayers must register with the Illinois Department of Revenue and file returns and remit payment within the amnesty window. Remote retailers can utilize a simplified retailers' occupation tax rate of 9% on gross receipts previously subject to the 6.25% state rate (and 1.75% for certain food, drug, and medical appliance sales), avoiding the complexities of destination-based sourcing and potentially disparate rates compared to in-state retailers.

IDOR has posted a list of FAQs about the amnesty programs on its website. If you have any questions about your eligibility to participate in these programs or need assistance taking advantage of these opportunities to put Illinois tax burdens behind you on advantageous terms, please reach out to your contact at Latimer LeVay Fyock or Puneet Cham.