As we previously reported, Illinois extended the filing and payment deadline for 2019 income tax returns to July 15, 2020. However, Illinois did not extend the due date for taxpayers who need to remit estimated tax payments for calendar year 2020.
The first Illinois estimated tax payment for individual’s 2020 returns remains due April 15, 2020.
WHAT ARE THE NEW RULES?
You now have a few more choices for determining the amount of your 2020 Illinois individual estimates sufficient to avoid penalties for late payment of estimated taxes.
- Pay the lesser of 90% of the tax liability for the tax year 2020 in four equal installments;
- Pay 100% of the tax liability for the year 2019 in four equal installments; or
- Pay 100% of the tax liability for the year 2018 in four equal installments.
Illinois also modified the rules regarding the treatment of a 2019 overpayment applied to 2020 estimated taxes. The 2020 estimated tax period that the overpayment can be applied to will depend on when it was originally received. If the overpayment is the result of 2019 tax payments received on or before April 15, 2020, it will be applied against the 2020 first quarter required estimated tax installment due on April 15, 2020. If the overpayment results from a tax payment made with the extension on or around July 15, 2020, it would apply to the third quarter required estimated tax payment for 2020.
Taxpayers who do not receive their income evenly throughout the year can still annualize their estimated tax payments to match when they earn their income.
If you have questions or concerns regarding this Client Alert, please contact Joseph Odzer at firstname.lastname@example.org or your ORBA advisor.