PTETaxDesk / 2026 State PTET & $40k SALT Guides / Illinois 4.95% PTET Guide (2026): Interaction With the 1.5% Personal Property Replacement Tax
Illinois 4.95% PTET Guide (2026): Interaction With the 1.5% Personal Property Replacement Tax
Illinois 4.95% PTET Guide (2026)?
Illinois imposes a 4.95% elective Pass-Through Entity Tax on net income in addition to the mandatory 1.5% personal property replacement tax, granting partners and shareholders a 100% credit for the 4.95% PTET on Schedule K-1-P / K-1-T.
Illinois imposes a 4.95% elective Pass-Through Entity Tax on net income in addition to the mandatory 1.5% personal property replacement tax, granting partners and shareholders a 100% credit for the 4.95% PTET on Schedule K-1-P / K-1-T.
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2026 PTET & SALT Compliance Checklist
- Adopt a Written Partner/Shareholder PTET Consent Resolution: Keep signed authorization in your corporate or partnership minute book.
- Remit Cash-Basis Vouchers Before December 31, 2026: Under IRS Notice 2020-75, cash-basis entities can deduct 2026 PTET only to the extent paid by December 31, 2026.
- Avoid Overpayment Refunds (IRC § 111): Base your Q4 PTET payment on actual projected 2026 state liability so next year's state refund isn't recaptured as ordinary federal income.
Frequently Asked Questions
Illinois 4.95% PTET Guide (2026)?
Illinois imposes a 4.95% elective Pass-Through Entity Tax on net income in addition to the mandatory 1.5% personal property replacement tax, granting partners and shareholders a 100% credit for the 4.95% PTET on Schedule K-1-P / K-1-T.