If forming an Illinois corporate is in your plans, you need to understand requirements at both the federal and state levels. Even if your business was previously incorporated in another state, numerous variables differ on a state-to-state basis. This is particularly the case when addressing corporate income tax. 

Forming an Illinois Corporation

In order to form a corporation, you will need to file Articles of Incorporation with the Illinois Secretary of State. You can submit documentation by fax, mail, or online. This will cost you $150, plus a $25 minimum franchise tax fee. 

Once submitted, you can expect that this process will take two to three weeks. If you require a faster turnaround, online filing is your best option. Completed in one to five days, this expedited process costs an additional $100. 

Keep in mind that:

  • In your corporations">Articles of Incorporation, you must list your Illinois registered agent. 
  • Upon forming a corporation, you will need to address key steps on an ongoing basis. This will ensure that your corporation remains in compliance. 
  • Illinois corporations must keep completed records at their primary place of business.
  • In Illinois, state-level S-Corporation election is not required — the state recognizes federal S-corporation election. 

Illinois Corporate Income Tax

Illinois corporations are required to file taxes on an annual basis. The net income tax rate is 9.5 percent for Illinois corporations, yet 5 percent for personal net income tax. When filing taxes, you should begin with your federal taxable income. This is your income minus any deductions. You can find out more at the State of Illinois website. 

Here is a summary of what you should know to get started:

  • Illinois requires you to have a state tax identification number. To obtain your Federal Tax ID Number, you will need to contact the IRS.
  • If you have employees, you also require an EIN (Employer Identification Number). This is generally a requirement for opening a business bank account. 
  • If you have a corporation that (1) has net income or loss, or (2) is qualified to conduct business in the state of Illinois, you will need to file Form IL-1120.

Tax Returns 

When you file your Illinois corporate tax return depends on a number of potential factors. The first step is to determine when your tax year ends. Please obtain Form IL-1120 as soon as possible to plan ahead. You can discuss your corporation's deadline with your accountant or attorney. Once submitted, if you need to make any changes, you will need to file Form IL-1120-X.

If you would like to make any alterations, a separate form will need to be submitted for each tax year that needs to be changed. Do NOT file another Form IL-1120 to showcase amended figures. If you have any questions regarding this process, you should seek a professional's help. 

Estimated Payments 

If you have an Illinois corporation (S-Corporations are excluded), understanding payment requirements will be critical. If you expect your income and tax liability tax to be more than $400, quarterly payments will be required. These are due on the 15th day of the fourth, sixth, ninth, and twelfth months of your tax year. When mailing estimated tax payments, you must also complete Form IL-1120-ES. This is not required when filing online. 

Illinois Office of Corporate Relations

In today's rapidly evolving business world, it is important to utilize all available resources. This is why you should contact The Office of Corporate Relations at the University of Illinois at Urbana-Champaign. Since the University of Illinois is ranked among the top public research universities, this can make the hiring process more efficient. With more than 12,000 graduate students (and an additional 30,000 undergraduate students), the talent pool is large. 

You may also be interested in collaborating with researchers. If so, the university has approximately 6,500 faculty and staff members. These types of collaborations are often what push the boundaries of knowledge, allowing corporations to expand. 

Whether you are interested in hiring an intern or a mentor, there are various platforms that can help you build your brand. As a state that thrives on bringing academia and business together, Illinois is a great place to incorporate your business as you continue to grow. 

If you need any assistance regarding Illinois corporation, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.