IL-2220: Computation of Penalties for Businesses (2025)
Illinois · Illinois DOR · Used for tax years 2025
Illinois Form IL-2220 computes business penalties for underpayment of estimated tax, unpaid tax, and late filing. It includes penalty worksheets and is attached to Form IL-1120, IL-1120-ST, IL-1065, IL-1041, or IL-990-T.
Who files this form
The 2025 IL-2220 applies to tax years ending on or after December 31, 2025. It is an attachment to Form IL-1120, IL-1120-ST, IL-1065, IL-1041, or IL-990-T.
You must complete IL-2220 if you use the annualized income installment method in Step 6 to figure 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.
When it's due
For the 2025 tax year, Step 2 lists estimated installment dates as the 15th day of the 4th, 6th, 9th, and 12th month 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 refers to your return’s original and extended due dates but does not print specific filing dates.
What you'll need
Have these records available, as applicable:
- Your current annual Illinois return, including the name and FEIN shown on it.
- Your prior-year return, including its tax liability and any different FEIN used.
- Records of payment 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, records of Illinois net income and applicable taxes and surcharges for the periods listed in Step 6. PTE filers also need the period-by-period income amounts requested in the PTE Tax Worksheet.
How to file
Attach IL-2220 to your Form IL-1120, IL-1120-ST, IL-1065, IL-1041, or IL-990-T.
The supplied form does not provide a mailing address or e-filing directions.
Common mistakes
- Using the wrong return to calculate installments. Do not use tax shown on an amended return filed after the extended due date to compute required installments in Step 2.
- 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 was a short tax year.
- Leaving annualization entries incomplete. The form warns that failing to complete all required entries in Step 6, Lines 31 through 51, Columns A through D, may cause the department to disregard your election and calculate the penalty using four equal installments.
- Completing Penalty Worksheet 1 unnecessarily. Do not complete it if you paid each quarter’s required amount from Line 16 by its Line 11 payment due date.
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 tax 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 listed rates are 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 owed on Line 30 if you wish to pay your penalties at this time. Otherwise, the department will send you a bill.