How to Pay Illinois Estimated Tax?

This guide will walk you through the process of determining your estimated tax liability, making payments, and understanding key deadlines to ensure compliance with Illinois tax laws.

How to Pay Illinois Estimated Tax

Estimated tax is a method used to pay tax on income that is not subject to withholding. This includes earnings from self-employment, interest, dividends, rent, and other sources. If you are an Illinois resident or a non-resident earning income in Illinois, you may need to make Illinois estimated tax payments if you expect to owe $500 or more in state income tax.

Who Must Pay Illinois Estimated Tax?

You must make Illinois estimated tax payments if:

  • You are self-employed or have income not subject to state withholding.
  • You expect to owe at least $500 in state income tax after subtracting withholding and credits.
  • Your withholding and credits are less than 90% of the tax expected on your current year’s return or 100% of the tax shown on your previous year’s return, whichever is smaller.

Calculating Illinois Estimated Tax

To calculate your Illinois estimated tax, follow these steps:

  1. Project your total income for the year, including wages, self-employment income, interest, dividends, and any other sources.
  2. Subtract any allowable deductions and credits from your estimated income to arrive at your taxable income.
  3. Use the current Illinois state tax rate to calculate your estimated tax liability. For individuals, the tax rate is a flat 4.95%.
  4. Divide your total estimated tax liability by four to determine the amount of each quarterly payment.
How to Make Estimated Tax Payments in Illinois

How to Make Estimated Tax Payments in Illinois?

There are several ways to make estimated tax payments to the Illinois Department of Revenue:

  1. Electronic Payments: The easiest and most efficient method is to make payments online through the Illinois Department of Revenue’s MyTax Illinois website (mytax.illinois.gov). You can schedule payments in advance, ensuring timely compliance.
  2. Payment Vouchers: If you prefer to mail your payments, use Form IL-1040-ES, Estimated Income Tax Payment for Individuals. Complete the voucher and mail it along with your check or money order to the address provided on the form.
  3. Credit Card Payments: Illinois allows you to pay your estimated taxes using a credit card. This can be done through MyTax Illinois or other approved payment processors listed on the Department of Revenue’s website.
  4. Direct Debit: When filing your individual income tax return electronically, you can opt for direct debit, allowing the Department of Revenue to withdraw the amount due directly from your bank account.

Deadlines for Illinois Estimated Tax Payments

Illinois Estimated tax payments are due in four equal installments throughout the year. For the current tax year, the due dates are as follows:

  • First Quarter: April 15
  • Second Quarter: June 15
  • Third Quarter: September 15
  • Fourth Quarter: January 15 of the following year

If the due date falls on a weekend or holiday, the payment is due the next business day.

Failing to make timely estimated tax payments can result in penalties. The Illinois Department of Revenue may assess a penalty if you do not pay enough tax through withholding and estimated payments, or if you do not make the payments on time. To avoid penalties, ensure that your estimated payments are accurate and submitted by the deadlines.