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October 16, 2025
Could impact S-CORPS and other small businesses that file as pass-through entities
A provision in Illinois law that permits pass-through businesses to deduct state taxes from their federal tax returns is set to expire at the end of 2025.
The Pass-Through Entity Tax (PTET) provision, commonly referred to as the SALT (State and Local Taxes) workaround, was introduced in 2021 in response to changes in federal tax law.
When passed, however, the Illinois General Assembly inserted a sunset clause into the provision so that it would automatically expire after 2025.
If it’s not extended, Illinois businesses that file their taxes as pass-through entities could see their federal tax liabilities rise in 2026.
The Taxpayers’ Federation of Illinois estimates the SALT workaround saves Illinois businesses approximately $500 million a year.
Contact your legislator today if this impacts your business!
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