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SB 2041

School enrollment; criminalize the enrollment without establishing domicile.

2025 Regular Session Introduced by Michael McLendon

Illinois switches estimated tax rules: safe harbor at 90% of current-year tax or 100% of prior-year tax (if eligible); sets 25% installments and annualization, affecting penalties.

Died In Committee
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Bill Summary · SB 2041

SB 2041 — Summary (Introduced version)

Status note: the header supplied with this request lists the bill as "Died In Committee." The legislative action log included with the bill text contains conflicting entries (including readings, committee reports, and final actions). I have summarized the bill text as introduced (LRB10408342HLH18393b) below. Verify current status with the Illinois General Assembly website or the Secretary of State for the authoritative legislative history.

Main purpose

The bill would amend Section 804 of the Illinois Income Tax Act (35 ILCS 5/804) to revise how the "required annual payment" and required estimated-tax installments are calculated, and to clarify related underpayment/penalty rules. The changes affect individuals and corporations that make estimated Illinois income-tax payments.

Key provisions and changes

  • Redefines the "required annual payment" (the safe-harbor basis for required estimated payments) as the lesser of:
    1. 90% of the tax shown on the return for the taxable year (or, if no return is filed, 90% of the tax for that year);
    2. 100% of the tax shown on the taxpayer's return for the preceding taxable year, if (a) the taxpayer filed a return for the preceding year showing a tax liability and (b) the preceding year was a 12-month year; or
    3. 90% of the tax for the taxable year that would be due based on the Income Tax Act as it exists on the first day of the taxable year.
  • Required installments: except as provided elsewhere, each required installment equals 25% of the required annual payment.
  • Annualized-income installments: retains and details the mechanism allowing taxpayers to compute lower required installments based on annualized income for periods; provides recapture rules (increases in later installments when an earlier installment was reduced).
  • Specifies the applicable cumulative-percentage milestones for installments: 1st = 22.5%, 2nd = 45%, 3rd = 67.5%, 4th = 90% (used when annualizing net income).
  • Provides distinct annualization rules for individuals (monthly-based with standard exemption adjustment) and corporations (period-based multipliers for different installment months).

  • Penalty exceptions: prevents imposition of the underpayment penalty in specified situations (for example, where taxpayer was not required to file a return the prior year, or for individuals who had no prior-year tax liability and the prior year was 12 months). The bill preserves other administrative waiver or adjustment authorities (text truncated in the provided document).

  • Effective date: the introduced text indicates the changes take effect immediately.

Who is affected

  • Illinois individual taxpayers and corporations that make quarterly estimated income-tax payments.
  • Tax preparers, payroll and finance departments, and the Illinois Department of Revenue (administration and enforcement of estimated-payment rules).

Potential impact and implications

  • Recalibrates the estimated-tax safe harbor and could change whether taxpayers owe underpayment penalties in a given year.
  • The inclusion of a clause tying one safe-harbor option to the tax that "would have been due based on this Act as it exists on the first day of the taxable year" could affect taxpayers when law changes occur during a taxable year.
  • Clarifications on annualization and recapture reduce ambiguity for taxpayers with uneven income.
  • May require updates to tax guidance, withholding/estimated-payment calculators, and taxpayer communications from the Department of Revenue.

Procedural/timeline notes

  • Introduced by Sen. Celina Villanueva (bill text shows introduced 2/6/2025).
  • Because the supplied legislative-action list contains conflicting entries (including both committee activity and later steps), confirm final status (died in committee, passed, or enacted) using the official Illinois legislative tracking site.

Compiled from official sources — confirm details with the bill’s official record.

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