How to Start an LLC in Illinois (2026)
Illinois costs a bit more upfront than some states — a $150 filing fee and a $75 Annual Report — but its flat 4.95% income tax and clear rules make it a straightforward state to operate in. This guide walks all 8 steps, with a cost calculator and the details other guides skip.
Illinois formation costs $150 and the Annual Report costs $75, due before the first day of the anniversary month. Check the current processing queue and service availability rather than relying on a fixed approval time. Income tax, replacement tax and any eligible PTE election are separate from the report fee.
- Filing fee
- $150
- Processing
- Check current official queue
- Annual Report
- $75/yr
- Report due
- Before anniversary month
- State income tax
- Flat 4.95%
- PPRT (multi-member)
- 1.5%
- Formation doc
- Articles of Org.
Why Form an LLC in Illinois?
Illinois's $150 filing fee sits toward the middle of the national range, but the state's straightforward flat-tax structure makes ongoing compliance easier to plan around than many states:
- Flat 4.95% income tax — no brackets to calculate, the same rate applies regardless of income level.
- No franchise tax on LLCs — that separate business-privilege tax only applies to corporations in Illinois.
- Check the current SOS queue and transaction-specific optional services. Processing varies; no fixed acceptance time is guaranteed.
- No general statewide business license — fewer licensing hoops than many states, though Chicago and other municipalities have their own requirements.
- Series LLC option — Illinois is one of a handful of states that allows a single LLC to house multiple protected "series," useful for real estate investors managing several properties.
Illinois LLC Cost Calculator
Toggle the options to see your total first-year cost:
Estimates only. Registered agent pricing varies by provider. Your first Annual Report isn't due until the year after formation, so most LLCs' actual first-year cash outlay is just the $150 filing fee. Not legal or tax advice.
The 8 Steps to Start Your Illinois LLC
Here's the full path from name to taxes. Each step has its own detailed guide with a tool to make it easier — the filing that legally creates your company is Step 3: Articles of Organization:
Illinois's Flat Income Tax & PPRT
Illinois uses a flat 4.95% individual income tax rate — no brackets. As a default pass-through LLC, your share of profits flows to your personal return, taxed federally and then at Illinois's single flat rate. The detail many guides miss: multi-member LLCs (taxed as partnerships by default) also owe Illinois's Personal Property Replacement Tax (PPRT) — an additional 1.5% on net income, paid by the entity separately from the owners' personal returns. Single-member LLCs taxed as sole proprietorships are not subject to PPRT. We break the full picture down, with an estimator, in Step 8: Illinois LLC Taxes.
Illinois's Annual Report deadline runs backward from most statesYour report is due before the first day of your LLC's anniversary month — not by the last day of that month. Form in June and your report is due by May 31 every year, not June 30. See Step 6 for the full breakdown.
Report fee and tax obligations are separate
For tax years ending on or after December31,2026, a partnership electing Illinois PTE tax can choose either the Illinois-sourced share of all partners’ distributive income or resident partners’ full distributive shares plus nonresident partners’ Illinois-sourced income. Select the method on IL-1065. This is a partnership tax-base choice, not a universal rule for every LLC. Electing entities expecting more than $500 in tax liability must review estimated payments, including replacement tax and PTE liability, under current IDOR instructions.
Illinois LLC — FAQ
Ahmad Adil is the founder and CEO of LLC School. For filing and ongoing compliance, confirm the requirements with the responsible state agency. This is educational information, not legal or tax advice.
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