Tax planning clients for Illinois CPA and EA firms

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Short answer

Illinois owners worth a planning meeting are S corporation and partnership owners weighing the 4.95 percent PTE tax, now permanent, and businesses buying production property, which from 2026 get a different depreciation answer from Illinois than from the IRS. The election is made on the return, but the estimated payments start in the fourth month of the tax year, so book the meeting before then.

Illinois taxes individuals at one flat rate, charges pass-through businesses a separate replacement tax, and has now made its pass-through entity tax election permanent. From 2026 it also parts ways with one of the new federal expensing rules, so an Illinois owner can have one depreciation answer for the IRS and another for the state. Each of those is a planning conversation. Below are the Illinois rules, the size of the Illinois market and the owners we would book for you first.

20 qualified tax planning meetings in 90 days, guaranteed.

Our team contacts and qualifies them so you don't waste time on the wrong leads, then books them on your calendar.

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A flat income tax plus a replacement tax

Partnerships and S corporations don't pay Illinois income tax. Their owners pay it, at the flat individual rate of 4.95 percent of net income [1][2]. A C corporation pays 7 percent of net income in income tax [1].

The entities pay something else, the personal property replacement tax. The Department of Revenue puts it at 1.5 percent of income taxable in Illinois for partnerships and S corporations, and 2.5 percent for corporations other than S corporations [3]. Illinois brought in replacement taxes after it abolished business personal property taxes, and the money goes to local governments and school districts [2].

So a typical Illinois S corporation owner deals with two layers, the entity's 1.5 percent replacement tax and the owner's 4.95 percent income tax on their share.

The PTE tax with no end date

Illinois lets a partnership (other than a publicly traded partnership) or an S corporation elect to pay an entity-level tax of 4.95 percent of its net income, and each partner or shareholder gets a credit at the same rate on their share [2]. The original law stopped the election for tax years beginning on or after January 1, 2026. Public Act 104-0453 removed that end date [4].

How the Illinois election works [2]:

• It is made each year on the return itself, Form IL-1065 for partnerships or Form IL-1120-ST for S corporations.
• It becomes irrevocable after the extended due date for that year.
• An electing entity has to make quarterly estimated payments if the expected PTE tax plus replacement tax is more than $500. They are due by the 15th day of the 4th, 6th, 9th and 12th months of the tax year, and the required amount is 90 percent of the current year or 100 percent of the prior year.

The election can wait until the return is filed, so Illinois owners get time to see the year's numbers first. The catch is the estimated payments, which are due during the year if the entity expects to elect.

At the federal level, IRS Notice 2020-75 lets the entity deduct state income tax it pays and keeps that payment out of each owner's SALT limit [5]. For 2025 that limit is $40,000, reduced by 30 percent of modified adjusted gross income above $500,000, with a $10,000 floor [6].

One asset, two depreciation answers

For tax years beginning on or after January 1, 2026, Public Act 104-0453 decouples Illinois from the federal 100 percent bonus depreciation claimed under Internal Revenue Code Section 168(n). Taxpayers use Form IL-4562, line 16, to add back the federal amount and claim what they would have deducted without that election [4]. Separately, the Department notes that federal bonus depreciation is 100 percent for property acquired and placed in service after January 19, 2025 [4].

For an owner building or buying the kind of property that rule covers, the Illinois number and the federal number will differ. Someone has to track the gap year after year, and that is planning work a firm can charge for.

Sales tax on services in Illinois

Illinois does not tax the service itself. Its Service Occupation Tax applies to tangible personal property transferred incident to a sale of service, and the Department's overview says the service part of the sale is not taxed [7]. A serviceperson with a physical presence in Illinois, or one who meets the $100,000 remittance threshold, has to register and collect that tax on the property part [7]. For a contractor or repair business, that split between parts and labor is a question for the planning meeting.

The Illinois tax and accounting market in numbers

These counts are from the US Census Bureau's County Business Patterns for 2023, the most recent year published [8]. They cover locations with paid employees in mid-March 2023, so sole preparers with no staff don't appear. Percentages are our arithmetic.

S corporations run 53 percent of Illinois employer locations, five points above the US share. Illinois CPA offices are bigger than average, at about 15 employees each against about 11 nationally, and about two in three still have fewer than 5 employees.

Licensing and the profession in Illinois

Two bodies are involved. The Illinois Board of Examiners certifies that candidates have met the education and exam requirements [9], and the Illinois Department of Financial and Professional Regulation issues the CPA license [10].

New pathways begin on January 1, 2027. All of them need at least 120 semester hours, a bachelor's degree or higher, all four CPA Exam sections and the AICPA ethics exam. A bachelor's degree in accounting comes with two years of qualifying experience. A master's degree in any field with 24 hours of accounting at intermediate level or above comes with one year. A bachelor's degree in any field with 24 hours of accounting and 24 hours of business, including business communication and business ethics, also comes with one year [9]. The Board says these requirements may still change because its rules are not final, and its page was last updated September 22, 2026 [9].

The state society is the Illinois CPA Society [11].

In our view, the 2027 pathways will mostly matter to firms that hire, since they shorten the route for staff who hold a master's degree.

Planning conversations Illinois owners will pay for

Our view of the topics that justify a planning fee in Illinois:

• Elect the PTE tax this year, or not. The decision is made on the return [2], but a firm has to project it early enough to set the estimated payments.
• Estimated payments for electing entities. Four installments, triggered once the expected tax passes $500 [2]. Missing them brings late estimated payment penalties [2].
• Two depreciation answers. From 2026, federal and Illinois depreciation split for Section 168(n) property [4]. Equipment and building decisions need both numbers.
• The replacement tax. Owners of S corporations and partnerships often don't know why the business pays 1.5 percent of its income on top of their own tax [3].
• Parts and labor on service invoices. How a service business bills affects its Service Occupation Tax [7].

Which Illinois planning clients to chase

Labelled as our view, based on the figures above:

1. S corporation owners. 170,095 Illinois employer locations, more than half the state total [8]. Each one has the PTE question and the replacement tax.
2. Businesses buying or building production property. The 2026 decoupling creates a state and federal gap someone has to track [4].
3. Owners above $500,000 of modified AGI. Their federal SALT limit shrinks [6], so the entity-level route is worth more.
4. Contractors and repair businesses. Their service and parts billing has a sales tax side [7].

Our qualification check screens out free-advice tire-kickers and clients who only call in March. Owners we book want planning across the year.

Want more Illinois owners like these on your calendar? Tell us who you want, and we fill the meetings.

See if your firm is a fit

Illinois dates to plan around

• 15th day of the 4th, 6th, 9th and 12th months: estimated payments for entities electing the PTE tax [2].
• Return filing: the PTE election itself, on Form IL-1065 or IL-1120-ST [2].
• January 1, 2026: Section 168(n) decoupling applies to tax years beginning on or after this date [4].
• January 1, 2027: new CPA licensure pathways begin [9].

Steps for an Illinois firm this quarter

1. List S corporation and partnership clients that elected the PTE tax for 2025 and confirm they plan to elect again now that the end date is gone.
2. For each electing entity, set the 2027 estimated payment schedule on the 15th day of the 4th, 6th, 9th and 12th months, using 90 percent of current or 100 percent of prior year tax.
3. Flag clients who bought or built property in 2026 that may fall under Section 168(n), and set up a separate Illinois depreciation schedule on Form IL-4562.
4. Explain the 1.5 percent replacement tax line to every S corporation and partnership owner who asks why the business pays tax.
5. Review billing for contractor and repair clients so the property part of each service invoice is stated separately.

How we work with Illinois firms

Financial Sales Insider is a marketing company based in Florida. We fill the calendars of CPA and EA firms across the US, Illinois among them, with qualified tax planning meetings. Your firm runs each meeting, makes the offer and decides who to take on. You choose the states and owner types at kickoff, and nothing starts until you sign off on the criteria. Nothing goes out under your firm's name without your approval.

A qualified meeting is one where a business owner we've qualified books onto your calendar and shows up.

If you have fewer than 20 qualified meetings after 90 days, we keep booking with no further monthly fee until you reach 20.

$3,000 a month. This is the management fee. Ad spend is separate, and your firm funds it directly. The term is 3 months.

Questions Illinois firm owners ask

Can you focus on S corporation owners? Yes. Entity type is one of the criteria you set, and our qualification check confirms it before an owner is booked.

Will you explain the replacement tax or the PTE election to owners? No. We don't give tax advice. That conversation happens in your meeting.

What if an owner books and then doesn't show? It doesn't count toward the 20. We chase the owner and rebook, and you see booked, held and rebooked meetings in the weekly update.

See if your firm is a fit

20 qualified tax planning meetings in 90 days, guaranteed.

Our team contacts and qualifies them so you don't waste time on the wrong leads, then books them on your calendar.

See if your firm is a fit

General information from the official sources listed below, checked October 25, 2026. Not tax or legal advice.

Also on this site

• Tax planning clients by state
• Texas
• California
• New York
• Florida
• How we book qualified meetings
• About Financial Sales Insider

Sources

1. Illinois Department of Revenue, Income Tax Rates. https://tax.illinois.gov/research/taxrates/income.html
2. Illinois Department of Revenue, Pub-129, Pass-through Entity Information. https://tax.illinois.gov/research/publications/pubs/pass-through-information.html
3. Illinois Department of Revenue, Personal Property Replacement Tax. https://tax.illinois.gov/localgovernments/personal-property-replacement-tax.html
4. Illinois Department of Revenue, FY 2026-15, What's New for Illinois Income Taxes. https://tax.illinois.gov/research/publications/bulletins/fy-2026-15.html
5. IRS Notice 2020-75. https://www.irs.gov/pub/irs-drop/n-20-75.pdf
6. IRS, Instructions for Schedule A (Form 1040) (2025). https://www.irs.gov/instructions/i1040sca
7. Illinois Department of Revenue, Pub-113-SOT, Overview of Service Occupation Tax. https://tax.illinois.gov/research/publications/pubs/overview-of-service-occupation-tax.html
8. US Census Bureau, County Business Patterns 2023, state file. https://www.census.gov/data/datasets/2023/econ/cbp/2023-cbp.html and https://www2.census.gov/programs-surveys/cbp/datasets/2023/cbp23st.zip
9. Illinois Board of Examiners, 2027 CPA Requirements. https://www.ilboe.org/2027-cpa-requirements/
10. Illinois Department of Financial and Professional Regulation, Public Accounting. https://idfpr.illinois.gov/profs/pa.html
11. Illinois CPA Society. https://www.icpas.org/