Illinois Offers Limited-Time Tax Amnesty for Businesses

The Illinois Department of Revenue is launching temporary tax amnesty programs for general state taxes, franchise taxes, and in the future, remote retailer obligations. These programs allow qualifying businesses to settle outstanding tax debts without paying penalties or interest. With filing windows approaching, companies should assess their exposure and consider whether participation could offer financial benefits. Note that while the general and franchise amnesty programs run in fall 2025, the remote retailer program is scheduled for late 2026.

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General Tax Amnesty Program (Oct. 1–Nov. 17, 2025)​

Illinois’ General Tax Amnesty Program allows taxpayers to resolve outstanding liabilities for most state taxes (excluding motor fuel) from periods ending after June 30, 2018, and before July 1, 2024. To qualify for the waiver of penalties and interest, businesses must file returns and pay all taxes in full during the program window: October 1 to November 17, 2025.

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Taxpayers may choose to settle specific tax types or select years, and may also include estimated payments based on federal changes not yet finalized. However, entities involved in active criminal or civil tax litigation — unless settled by an agreed judgment before the deadline — are not eligible.

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Compared to the Voluntary Disclosure Program, amnesty offers a broader waiver (including interest), though voluntary disclosure may offer a shorter look-back period. Businesses should weigh the benefits of each.

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Franchise Tax Amnesty (Oct. 1–Nov. 15, 2025)

The Secretary of State will offer a separate amnesty for unpaid franchise taxes and license fees covering periods after June 30, 2019, through June 30, 2025. Full payment of applicable amounts during the October 1 to November 15, 2025 window will result in full waiver of penalties and interest.

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However, eligibility is narrower. Companies already involved in interrogatories or any legal or administrative proceedings related to franchise taxes will be excluded from this program.

Remote Retailer Amnesty Coming in 2026.

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A third amnesty program focused on remote retailers is set for August 1 to October 31, 2026, covering tax periods from January 1, 2021, to June 30, 2026. Further details will be released closer to the launch date.

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Final Notes

We recommend you contact your CPA or tax advisor. Read more about the Illinois Tax Amnesty program here:  https://tax.illinois.gov/programs/2025illinoistaxamnesty.html