IL HB2702

Amends the Illinois Income Tax Act to make the pass-through entity (PTE) tax election permanent by removing the January 1, 2026 expiration date

The PTE tax allows partnerships and S corporations to elect to pay a 4.95% entity-level income tax, with partners/shareholders receiving a corresponding credit against their individual Illinois income tax

The provision was originally created to help business owners work around the federal $10,000 cap on state and local tax (SALT) deductions imposed by the 2017 Tax Cuts and Jobs Act

The bill takes effect immediately upon becoming law