Illinois Announces Tax Amnesty Programs

Illinois announced three upcoming Tax Amnesty Programs:

• The General Tax Amnesty Program runs from October 1, 2025, through November 17, 2025, and provides relief for unpaid or underpaid taxes that the Illinois Department of Revenue collects.
• The Franchise Tax Amnesty Program runs from October 1, 2025, through November 15, 2025, and provides relief for unpaid or underpaid franchise tax liabilities.
• A Remote Retailer Amnesty Program runs from August 1, 2026, through October 31, 2026, and applies to remote retailers with outstanding Retail Occupation (sales) tax liabilities.

Here’s what you need to know.

General Tax Amnesty

The General Tax Amnesty Program runs from October 1, 2025, through November 17, 2025, and covers unpaid or unfiled tax liabilities collected by the Illinois Department of Revenue (e.g., income, sales, excise). During this period, you can pay and file prior unpaid or unfiled tax liabilities for periods ending after June 30, 2018, and before July 1, 2024.

You can participate in the amnesty program on a limited basis. For example, you can resolve income tax liabilities but not sales tax liabilities. You can also resolve tax liabilities for a certain tax year. If paid in full by the end of the amnesty program, all eligible penalties and interest will be waived.

Who is eligible?

Eligibility for the program generally extends to any taxpayer with outstanding Illinois tax liabilities for the designated period. Taxpayers cannot participate if:

• They are a party to any criminal investigation.
• They are parties to any civil or criminal litigation for nonpayment, delinquency, or fraud related to any Illinois tax.

You must also be able to pay the full amount of tax owed for the liabilities they include—partial payments will not qualify for relief.

Franchise Tax Amnesty

The Franchise Tax Amnesty Program runs from October 1, 2025, through November 15, 2025, and covers unpaid or unfiled franchise tax liabilities. During this period, you can pay and file prior unpaid or unfiled franchise tax liabilities for tax periods ending after June 30, 2019, and before July 1, 2025. If paid in full by the end of the amnesty program, all eligible penalties and interest will be waived.

Eligibility for the program generally extends to any taxpayer with outstanding Illinois tax liabilities for the designated periods. Taxpayers cannot participate if they are a party to any civil, administrative, or criminal investigation or litigation for nonpayment of franchise tax or license fees. You must also be able to pay the full amount of tax owed for the liabilities they include—partial payments will not qualify for relief.

Remote Retailer Amnesty Program

The Remote Retailer Amnesty Program runs from August 1, 2026, through October 31, 2026, and applies specifically to remote retailers that have outstanding retailer’s occupation tax (sales tax) liabilities. Details for this program have not yet been released, but remote retailers may participate in the upcoming General Tax Amnesty Program if they have liabilities that qualify.

Key Implications to Consider

The 2025 Illinois Tax Amnesty Program presents a significant opportunity to resolve outstanding liabilities without the burden of penalties and interest. Failure to act within the amnesty window could result in continued accrual of penalties, interest, and potential enforcement actions. However, participating in the program may limit your ability to later contest the liability, so careful review of the amounts owed is essential.

What do I need to do?

To take advantage of the 2025 Illinois Tax Amnesty Program, review your records to identify any unpaid or unfiled income, sales or excise tax liabilities for periods between July 1, 2018, and June 30, 2024, and franchise taxes between June 30, 2019, and July 1, 2025.

Businesses should identify which eligible tax liabilities to address and ensure that full payment of the tax owed can be made by the deadline to take full advantage of the program’s penalty and interest relief.

Our State and Local Tax team can help you ensure compliance and understand the implications of ever-changing state tax laws.