How to elect S-Corp status in Illinois
An S-Corporation election in Illinois can save self-employed business owners thousands in self-employment tax. The federal deadline is March 15 (Form 2553). Illinois state-level tax treatment is 4.95% flat. We file the federal election and any required Illinois forms for $0 service fee.
Illinois S-Corp election at a glance
| Federal form | IRS Form 2553 |
|---|---|
| Federal deadline | March 15 |
| Illinois state tax | 4.95% flat |
| Eligibility | ≤100 shareholders, all US persons |
| File.Business fee | $0 |
Is an S-Corp election worth it in Illinois?
An S-Corp election in Illinois typically makes sense when:
- Your business net profit is roughly $40,000 or more per year
- You can pay yourself a reasonable salary plus take distributions
- You are willing to run payroll (required for S-Corp owners)
- You file your S-Corp tax return by March 15 each year
The savings come from splitting your income between W-2 wages (subject to FICA) and S-Corp distributions (not subject to self-employment tax). Use our S-Corp savings calculator to see your specific number.
Illinois S-Corp election: step-by-step
- Have an eligible entity. Your Illinois LLC or C-Corporation must already exist. Form an LLC or form a corporation first if needed.
- Confirm eligibility. All shareholders must be US persons (no corporations, partnerships, or foreign nationals), and you must have 100 or fewer shareholders.
- File IRS Form 2553. Submit within 2 months and 15 days of the tax year you want the election to take effect, or by March 15 of the current year.
- Check Illinois state requirements. Some states require a separate state-level election. Illinois's tax treatment is 4.95% flat.
- Set up payroll. S-Corp owners must take a reasonable salary subject to payroll tax. Our payroll partners handle setup.
- File annual S-Corp returns. Form 1120-S federally and Illinois state returns by March 15 each year.
File your Illinois S-Corp election
We prepare and file Form 2553, handle any Illinois state-level requirements, and connect you to a payroll partner. $0 service fee.
Start my S-Corp election Run the savings calculatorIllinois S-Corp FAQ
What is the Illinois S-Corp filing deadline?
The federal S-Corp tax return (Form 1120-S) is due by March 15 each year. State returns follow the same schedule in most cases.
Does Illinois have its own S-Corp tax?
Illinois's state-level treatment for S-Corps is 4.95% flat. Always confirm with a tax professional or the Illinois Department of Revenue.
Can my LLC elect S-Corp status in Illinois?
Yes. Many Illinois LLCs elect S-Corp tax treatment to reduce self-employment tax. The LLC remains an LLC for legal purposes but is taxed as an S-Corp.
How much can I save with an S-Corp in Illinois?
Typical savings range from $2,000 to $10,000+ per year for businesses with $50K-$250K in net profit. Use our savings calculator for your specific number.
On the $129/yr Compliance Annual Filings plan, we cover state late fees.
When you autofile your annual report through the $129/yr plan and we miss the deadline, we pay the state's late fee. The guarantee applies to that specific plan and the filings it includes. Other File.Business services are billed at the prices on this page.