Does Illinois Accept Federal Extension for Individuals?

This article explains Illinois’s approach to individual income tax extensions. It clarifies the distinction between filing and paying, and details the consequences of non-compliance.

Illinois’s Approach to Federal Filing Extensions

Illinois generally aligns its individual income tax filing extension with the federal extension. The state automatically grants a six-month extension to file an individual income tax return (Form IL-1040) if a federal extension is in place. This means individuals who properly file a federal extension (typically Form 4868) with the IRS do not need a separate Illinois-specific form for this initial six-month extension.

For calendar year filers, this automatic extension typically moves the filing deadline from April 15 to October 15. If the IRS grants an extension longer than six months, Illinois automatically allows that extended period. However, if a federal extension is not filed, or if an individual needs to make an extension payment, they may use Illinois Form IL-505-I, Automatic Extension Payment for Individuals.

Form IL-505-I is primarily used to calculate and submit any tentative tax liability by the original due date, even if the complete return cannot be filed at that time. While not required to obtain the automatic six-month filing extension, filing Form IL-505-I is necessary if a payment is being made via paper check or money order.

Key Distinctions of a Tax Extension

A common misunderstanding among taxpayers is that an extension to file a tax return also grants an extension to pay any taxes owed. An extension provides additional time only to submit the tax return, not to remit payment. All estimated taxes due must still be paid by the original filing deadline, typically April 15 for most individuals.

To avoid penalties and interest, individuals should estimate their tax liability and pay any amount due by the original due date, even if filing an extension. This estimated payment can be made electronically through MyTax Illinois or by mailing Form IL-505-I with a check or money order.

The extension to file provides an additional six months, extending the deadline for calendar year filers from April 15 to October 15. However, the obligation to pay any tax due remains tied to the original April deadline.

Penalties and Interest for Non-Compliance

Failing to meet tax obligations, even with an extension to file, can lead to penalties and interest charges. A late-filing penalty can be assessed if the tax return is not filed by the extended due date. This penalty can be the lesser of $250 or two percent of the tax liability, reduced by timely payments or credits. If a return is not filed within 30 days after receiving a notice of non-filing, an additional penalty, the greater of $250 or two percent of the tax shown due, up to $5,000, may be imposed.

A late-payment penalty applies if the tax owed is not paid by the original due date, even with a valid filing extension. For payments 30 days late or less, the penalty rate is two percent of the tax liability. If the payment is more than 30 days late, the penalty rate increases to ten percent of the tax liability. Interest also accrues on any unpaid tax from the day after the original due date until the payment date. The interest rate is reviewed twice yearly and aligns with the federal underpayment rate.