Does Illinois Accept Federal Extension?

Tax extensions provide taxpayers with additional time to prepare and submit their required tax forms. This extension applies specifically to the filing deadline, not to the deadline for remitting any taxes owed. Taxpayers often seek an extension to gather necessary financial documents or to navigate complex financial situations before accurately completing their return. However, the tax payment itself remains due by the original deadline to avoid penalties.

Illinois’s Position on Federal Extensions

Illinois aligns with federal tax regulations on extensions. If a taxpayer obtains a valid federal extension to file their income tax return, Illinois grants an automatic extension for filing the corresponding state return. This means individuals do not need to file a separate form with the Illinois Department of Revenue (IDOR) to extend filing time. This automatic extension is provided if any tax liability is paid by the original due date, preventing late payment penalties.

An exception applies if a taxpayer anticipates a refund from the state, as there is no penalty for filing late in such cases. A separate Illinois extension becomes necessary if a taxpayer did not file for a federal extension or if the federal extension was denied. The IDOR may also instruct a taxpayer to file a state extension under unique circumstances, overriding automatic acceptance. If a federal extension of more than six months is granted, Illinois automatically allows that extended period for state filing as well.

Filing an Illinois Extension

If a separate Illinois extension is required, individuals utilize Form IL-505-I, “Automatic Extension Payment for Individuals.” This form is available for download from the Illinois Department of Revenue website. To complete Form IL-505-I, taxpayers must provide their identifying information and the applicable tax year. The form also requires an estimation of the total tax liability for the year, considering any payments already made through withholding or estimated tax payments. The form helps determine the net tax to pay with the extension request to avoid penalties.

After completing Form IL-505-I, taxpayers have options for submission and payment. The common method is to pay electronically through the IDOR’s MyTax Illinois portal. This online process handles the extension request upon payment and provides immediate confirmation. Alternatively, taxpayers can print Form IL-505-I and mail it with a check or money order for the estimated tax due. Mail the form and payment to the address in the form’s instructions, ensuring it is postmarked by the original tax deadline.

Paying Your Illinois Tax

An extension provides additional time to file, but not to pay taxes owed. Taxpayers must remit their estimated tax liability by the original due date to avoid penalties and interest. Failure to pay by the original deadline can result in a late payment penalty. The penalty rate is 2% of the unpaid tax if paid within 30 days of the due date, increasing to 10% if paid after 30 days.

Underpayment of estimated tax penalties can apply if insufficient payments were made throughout the year, even with an extension to file. This penalty applies if the Illinois Income Tax exceeds total withholding and credits by more than $1,000 for individuals, or if estimated payments were insufficient. Payments can be made electronically through MyTax Illinois using a bank account or credit card, or by mailing a check with Form IL-505-I if a separate extension is filed. Ensuring timely payment, even with an extension, helps avoid financial penalties.