IL SB2021

Removes the January 1, 2026 sunset date for the pass-through entity (PTE) tax election, making it a permanent option for partnerships and S corporations in Illinois

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

Under current law, the PTE election would only be available for tax years beginning before January 1, 2026; this bill eliminates that expiration

The bill takes effect immediately upon becoming law