State & Local Tax Impacts of COVID-19 for Illinois – 2021

Thoughtware Alert Published: May 03, 2021 | Updated: Sep 09, 2021
SALT GOV COVID TW - 1

Information current as of August 31, 2021.

COVID-19 has changed life across the globe. Many taxing jurisdictions are taking mitigating actions to create social distance and aid taxpayers. The following is a running list of actions by jurisdiction, which generally result in additional time to file and/or pay. Further, many jurisdictions have closed their offices to in-person use by taxpayers and suspended their audit and administrative functions. This alert doesn’t cover similar waivers from local-level taxing authorities. These developments continue to quickly evolve; check with your BKD Trusted Advisor or visit our COVID-19 Resource Center for current information as needed.

Information Specific to Illinois

  • Illinois is extending the individual income tax filing and payment deadline for tax year 2020 from April 15, 2021, to May 17, 2021. The filing extension takes effect automatically, so no further action is required by taxpayers. The filing extension doesn’t apply to estimated tax payments that are due on April 15, 2021—those payments are still due on April 15 and can be based on either 100 percent of estimated or 90 percent of actual liability for 2021, or 100 percent of actual liabilities for 2019 or 2020.
    • Governor’s Announcement, March 18, 2021.
  • Illinois released guidance for the tax treatment of unemployment benefits under the federal American Rescue Plan Act of 2021, which included a retroactive provision making the first $10,200 per taxpayer of 2020 unemployment benefits nontaxable for personal income taxpayers, including Illinois taxpayers, with an adjusted gross income (AGI) of less than $150,000. Taxpayers must follow the IRS’ updated instructions for Schedule 1 to calculate their modified AGI and file their federal and Illinois returns and aren’t required to add back any of the nontaxed unemployment benefits in computing their Illinois base income. Taxpayers who have filed both federal and Illinois returns don’t need to do anything if they filed their returns electronically before March 15, 2021, as the DOR will automatically update the taxpayers’ AGI. If the taxpayer filed the returns after March 14, 2021, and didn’t report the unemployment exclusion on the federal return, they need to file an amendment return using Form IL-1040-X and a pro forma federal Form 1040 (including Schedule 1 showing the recomputation of AGI).
    • Illinois DOR, Notice; March 30, 2021.
    • Illinois DOR, Notice; May 13, 2021.
  • Illinois legislation provides authorization for a county or municipality board, by resolution, to provide COVID-19 business relief and waive business fees, costs, and other licensing or registration costs. A waiver will be subject to an application or review process and a demonstration of need based on any financial or logistical hardship because of the COVID-19 pandemic. The exemption is not an exemption from safety, health, or regulatory requirements or inspections of a county, municipality, or the state.
    • Illinois H.B. 2454 (P.A. 102-0435), effective August 20, 2021.  
       

For more information, reach out to your BKD Trusted Advisor or use the Contact Us form below.

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