Multiple states, including Illinois, have chosen to not follow the tax law changes inherent in the One Big Beautiful Bill Act (OBBBA). Our state actually passed H.R.1, a bill that officially “decouples” our income tax laws from that of the Fed.
As a result, some of the changes for this tax season include…
1 – Tips are still fully taxable inside Illinois.
2 – Overtime is still fully taxable here as well.
3 – Illinois does not conform to the new Federal Bonus Depreciation Rules for businesses.
There are many other rule changes going into 2026 that all Illinois Entrepreneurs should know. Some of those rules include…
1 – The 1% statewide grocery tax is gone, but over half of Illinois municipalities have enacted their own local versions, with some counties also adopting them.
2 – The Reimagining Energy and Vehicles (REV) Illinois credit and REV Construction Jobs credit are effective for 2025 tax years.
3 – The 200-transaction threshold for remote sellers to collect destination-based sales tax is removed for 2026.
Let me leave you with this…
The moment the Feds passed their sweeping tax reform bill providing substantial tax savings to America’s Entrepreneurs and Middle Class I said there was no way that many states would follow. And here we are.
This move was as predictable as the rain.
Most states like Illinois are broke and the only thing they want to do is spend more money rather than finding a way to live within their means. According to the governor’s budget office, the state is facing a $2.2 billion budget deficit next fiscal year. That could grow to more than $5 billion by 2031.
As such, they’ll always find a way to raise our taxes. Some of the ideas floating around Springfield to increase their revenues include…
1 – A Renewed Push For A Graduated Income Tax System
Governor Pritzker spent $58M of his own money pushing a constitutional amendment to alter our current flat 4.95% income tax rate in favor of a graduated income tax system that would radically increase taxes on Illinois Entrepreneurs and their families. There’s been a renewed push for this recently with State Sen. Rob Martwick, D-Chicago, reintroducing this legislation again in both 2023 and 2025.
2 – A New Millionaire’s Income Tax
Former Democratic Gov. Pat Quinn would place a 3% surcharge on incomes over $1 million. The tax would raise an estimated $4.5 billion and would supposedly be set aside for property tax relief.
And that’s just two of the multiple proposals floating around Springfield to do one thing only. Get more of your hard earned money.
When you have questions, don’t hesitate to contact us. And if you’re having difficulties with your accounting or tax systems, we’d love to talk to you.
We’re all going to get through this. Let’s get through it together.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
773-267-7500
888-310-0300
www.AccountingSolutionsLtd.com
Disclaimer: The content on our website or newsletter is provided solely for general informational purposes and should not be construed as tax, accounting, legal, investment, or professional advice of any kind. Accessing this information does not create, and is not intended to create, an accountant-client relationship. This information may not reflect the most current tax laws, accounting standards, or regulatory developments and may not apply to your specific jurisdiction or circumstances. It is not a substitute for consulting qualified professionals. Before making any decisions or taking any actions, you should seek advice from a professional who is fully informed of all relevant facts pertaining to your situation.
Tax-related content on this site is not intended, nor may it be used by any taxpayer, to avoid penalties that may be imposed under applicable tax laws. To comply with IRS requirements, we inform you that any U.S. federal tax advice contained herein is not intended or written to be used, and cannot be used, for the purpose of avoiding tax penalties or promoting, marketing, or recommending any transaction or matter addressed herein.
All information is provided “as is,” without any guarantee of completeness, accuracy, or timeliness, and without any warranty, express or implied, including but not limited to warranties of performance, merchantability, or fitness for a particular purpose. We disclaim all liability for any loss or damage arising from reliance on this information.
Links to third-party websites are provided for convenience only; we do not endorse or assume responsibility for their content. All materials are the property of our firm and may not be reproduced without prior written consent.