IL-2220: Computation of Penalties for Businesses (2024)
Illinois · Illinois DOR · Used for tax years 2024
Illinois Form IL-2220 calculates business penalties for underpayment of estimated tax, unpaid tax, and late filing. It records required installments, payments, and penalty amounts and is attached to Form IL-1120, IL-1120-ST, IL-1065, IL-1041, or IL-990-T.
Who files this form
You must complete Form IL-2220 if you use the annualized income installment method in Step 6 to calculate the late-payment penalty for underpayment of estimated tax.
Otherwise, the Illinois Department of Revenue encourages you to let it calculate your penalties and send you a bill instead of completing the form yourself.
The 2024 form applies to tax years ending on or after December 31, 2024. It is attached to Form IL-1120, IL-1120-ST, IL-1065, IL-1041, or IL-990-T.
When it's due
For the 2024 tax year, Step 2 lists estimated installment dates as the 15th day of the 4th, 6th, 9th, and 12th months of your tax year. Step 2 applies to Form IL-1120 filers and Form IL-1120-ST and IL-1065 filers who elect to pay pass-through entity (PTE) tax.
The form does not print a separate filing deadline for Form IL-2220.
What you'll need
Have these records available for the parts of the form that apply to you:
- Your annual Illinois tax return, including your name and FEIN as shown on that return.
- Your prior-year return, including the tax liability and any different FEIN used that year.
- Payment records showing amounts and dates, including estimated payments, prepayments, extension payments, annual payments, and credits carried forward.
- Records of pass-through withholding, PTE tax credits, and withholding shown on W-2G or 1099 forms.
- If you annualize income, Illinois net income figures for the periods listed in Step 6. PTE taxpayers who annualize also need the period-by-period income figures requested in the PTE Tax Worksheet.
How to file
Attach Form IL-2220 to your Form IL-1120, IL-1120-ST, IL-1065, IL-1041, or IL-990-T.
The supplied form text does not provide a mailing address or e-filing directions.
Common mistakes
- Using the wrong tax amount for estimated installments. Do not use tax shown on an amended return filed after the return's extended due date. The estimated-tax penalty is based on the tax shown due on your original return.
- Assuming “N/A” means no installments are required. You may still need to make installments when prior-year tax is zero or the prior-year return covers a short tax year.
- Leaving the annualization worksheet incomplete. If you do not complete all required lines in Step 6, Lines 31 through 51, Columns A through D, the department may disregard your annualization election and calculate the penalty using four equal installments.
- Completing Penalty Worksheet 1 unnecessarily. Do not complete it if you paid the required Line 16 amount by the Line 11 due date for every quarter.
Questions people ask
When can I avoid the penalty for underpaying estimated tax?
You do not owe this penalty if timely estimated installment payments equal at least 90% of this year's tax liability or 100% of the prior year's liability. To use the prior-year amount, you must have reported a liability for that year, and it must not have been a short tax year.
What late-payment penalty rates does the form list?
The form lists 2% for payments 1 to 30 days late and 10% for payments 31 or more days late.
When do I calculate a late-filing penalty?
Complete Lines 25 through 27 only if you file after the extended due date and your tax was not paid by the original due date. The penalty is the lesser of 2% of the tax due entered on Line 25 or $250.
Do I have to pay the calculated penalties now?
The form says to pay the amount on Line 30 if you wish to pay your penalties at this time. Otherwise, the department will send you a bill. Line 30 may differ from the tax due or overpayment on your original return.