Exempt Organizations

Statutory Reference
35 ILCS 5/101 to 5/1701

Definition

The Illinois Income Tax is imposed on every exempt organization on its unrelated business taxable income as determined under Section 512 of the Internal Revenue Code, without any deduction for the tax imposed or the standard exemption.

Tax rate

Exempt organizations may be formed as either a corporation or a trust. Therefore, exempt organizations pay both regular income tax and the Personal Property Tax Replacement Income Tax (replacement tax), but the rates differ.

Corporations

Income Tax - 4.8%
Replacement Tax - 2.5%

Trusts

Income Tax - 3.0%
Income Tax - 1.5%

Tax base

The starting point for the Illinois Exempt Organization Income and Replacement Tax Return is the unrelated business taxable income or loss after deducting income exempt from tax by reason of the United States or Illinois Constitutions, or by reason of law, statute or treaties of the United States, and adding back any Illinois income tax deducted on the federal return.

Filing requirements

You must file Form IL-990-T, Illinois Exempt Organization Income and Replacement Tax Return, if you are an organization exempt from federal income tax by reason of Section 501(a) of the Internal revenue Code (IRC) and earn or receive unrelated business taxable income as determined under IRC, Section 512, and

have net income as defined under the Illinois Income Tax Act (IITA); or
are a resident or qualified to do business in the state of Illinois and are required to file U.S. Form 990-T (regardless of net income or loss).

Exempt Organizations
File Form IL-990-T annually by the 15th day of the 5th month following the close of the tax year.

Automatic seven-month filing extension
We grant you an automatic six-month extension of time to file your exempt organization tax return. You are not required to file Form IL-505-B, Automatic Extension Payment, in order to obtain this automatic extension. However, if you expect tax to be due, you must use Form IL-505-B to pay any tentative tax due in order to avoid interest and penalty on tax not paid by the original due date of the return. An extension of time to file your Form IL-990-T does not extend the amount of time you have to pay your Illinois tax liability.

What if I need to correct or change my return?

Corrected - If you need to correct or change your return after it has been filed, but before the automatic extension due date has passed, you must file a corrected Form IL-990-T. Mark the form "CORRECTED" at the top and show the changes. Any correction made may cause a recalculation of penalties and interest.
Amended - If you need to correct or change your return after it has been filed, and the automatic extension due date has passed, you must file Form IL-990-T-X843, Amended Exempt Organization Income and Replacement Tax Return, showing the changes. Use Form IL-843, Amended Return or Notice of Change in Income, for tax years prior to 12/31/2007.

For more information refer to IL-990-T-X Instructions.