Illinois Announces 2025 Tax Amnesty Program: Penalties and Interest Can Be Waived | TaxValet

Illinois is offering a limited-time Tax Amnesty Program from October 1 to November 17, 2025, giving businesses and individuals the chance to settle past-due taxes without paying penalties or interest. This is a significant opportunity for taxpayers with outstanding liabilities from prior years to get back in good standing.

Illinois Businesses and Individuals Can Eliminate Penalties for Past-Due Taxes 

If your business has unpaid Illinois taxes from prior years—or you discover an unreported liability—you can clear the slate by paying the tax due without penalties or interest. It’s especially relevant for businesses that may have struggled with compliance or missed filings during the eligible period.

The 2025 Illinois Tax Amnesty Program is also a valuable opportunity for those undergoing internal audits, discovering past reporting issues, or cleaning up state tax registrations. It’s a rare opportunity to resolve issues without the heavy cost of penalties and interest, and one that businesses with sales into Illinois won’t want to overlook.

What’s Changing with Illinois Sales Tax Amnesty in 2025?

The Illinois Department of Revenue will run a tax amnesty program from October 1 to November 17, 2025, under Public Act 104-0006 (HB 2755). Here's what you need to know:

Key Details:

• Amnesty Period: October 1, 2025 – November 17, 2025
  
  
• Eligible Tax Periods: Any Illinois state tax periods ending after June 30, 2018, and before July 1, 2024
  
  
• What’s Waived: All penalties and interest if you pay the full outstanding tax and file the required returns during the amnesty window
  
  
• Covered Taxes: Applies to a range of Illinois taxes, including sales tax, income tax, and others
  
  

Note: The Illinois Department of Revenue plans to release further guidance. Taxpayers should monitor for updates as the window approaches.

What Illinois Businesses Should Do to Prepare

To take advantage of this tax amnesty:

• Review Past Filings: Look back at Illinois tax periods from July 2018 through June 2024 for missed filings or underreported amounts.
  
  
• Evaluate Nexus and Registration Status: If your business sold into Illinois during this time without registering, now’s the time to fix it.
  
  
• Plan for Payment: Ensure you can pay any outstanding tax in full by the November 17 deadline.
  
  
• Consult a Professional: A state and local tax expert can help identify eligible liabilities and streamline the filing process.

How TaxValet Helps Clients Navigate State Tax Amnesty Programs

Simplify Compliance with TaxValet’s Sales Tax Experts

At TaxValet, we proactively monitor tax law changes—like Illinois’ 2025 Tax Amnesty Program—so our clients never miss important opportunities. If you're a TaxValet client, we’ll review your filing history, flag any potential exposure, and guide you through the amnesty process from start to finish. No guesswork, no stress.

If you’re not yet a client and want help identifying whether you qualify or how to participate in the Illinois Amnesty Program, reach out to us for a free consultation. We’ll help ensure you're in full compliance—without the penalty pain.