1120-ST Illinois Tax Return

[pmsmith2032]

I created an S-corporation back in November of 2012 but never conducted any business with it (besides opening a bank account). This past August I had this S-corp dissolved. I have filed 1120S with the IRS but never filed a 1120-ST with the state of Illinois. Was I wrong not to do so (I've never heard from the Illinois IRS). What should I do now?

 

[LdiJ]

I created an S-corporation back in November of 2012 but never conducted any business with it (besides opening a bank account). This past August I had this S-corp dissolved. I have filed 1120S with the IRS but never filed a 1120-ST with the state of Illinois. Was I wrong not to do so (I've never heard from the Illinois IRS). What should I do now?

Did you file a zero 1120-S for 2013 and mark it final return? If so, all is good, you just need to go ahead and file the same for IL. If you did not, you need to do both. You are already past the deadline and the IRS will charge you a monthly penalty for filing it late, so you should do it as soon as possible if you haven't already done so. I do not know whether or not IL charges a penalty for late filing a corporate return.

 

[pmsmith2032]

Thanks! I mailed the federal 2013 1120-S about week ago. I have not, however, filed a state return (ever).

 

[LdiJ]

Thanks! I mailed the federal 2013 1120-S about week ago. I have not, however, filed a state return (ever).

If you have never filed a state return then you probably need to consult with a local tax pro to see whether or not IL is going to be difficult about that or whether you should just leave it alone.

 

[davew128]

I don't think IL has a minimum corporate tax. Consult with a local pro to be sure though.

 

[LdiJ]

I don't think IL has a minimum corporate tax. Consult with a local pro to be sure though.

IN doesn't either, but the INDOR still expects a return to be filed, even if the income is zero.

 

[pmsmith2032]

Thanks! I could have swore I read somewhere last year that I didn't need to file because I had no activity. This year the instructions for the 1120-ST Illinois return reads as follow:

"Who must file Form IL-1120-ST?
You must file Form IL-1120-ST if you are a small business
corporation (“S corporation”), as defined in Internal Revenue
Code (IRC) Section 1361(a), that

• has net income or loss as defined under the Illinois Income Tax
Act (IITA); or
• is qualified to do business in the state of Illinois and is required
to file U.S. Form 1120S (regardless of net income or loss).

If you own a Qualified Subchapter S Subsidiary (QSSS) defined
in IRC Section 1361(b)(3), as well as any other entity that is
disregarded as an entity separate from you for purposes of the
IRC, it is likewise disregarded as a separate entity for purposes
of the IITA. You must include all items of income, deduction, loss,
credit, etc., from such entities on your return as if they were
earned or incurred by you directly.
If you are an S corporation that is a member of a unitary business
group, see the instructions for Illinois Schedule UB, Combined
Apportionment for Unitary Business Group, and “What if I am a
member of a unitary group?” in the general instructions below
for information about filing requirements. S corporations may be
required to apportion their business income as members of a
unitary group, but cannot file a combined return."

This indicated to me that I need to file. However, my concern is that if I file this year, they will realize I didn't file last.

 

[LdiJ]

Thanks! I could have swore I read somewhere last year that I didn't need to file because I had no activity. This year the instructions for the 1120-ST Illinois return reads as follow:

"Who must file Form IL-1120-ST?
You must file Form IL-1120-ST if you are a small business
corporation (“S corporation”), as defined in Internal Revenue
Code (IRC) Section 1361(a), that

• has net income or loss as defined under the Illinois Income Tax
Act (IITA); or
• is qualified to do business in the state of Illinois and is required
to file U.S. Form 1120S (regardless of net income or loss).

If you own a Qualified Subchapter S Subsidiary (QSSS) defined
in IRC Section 1361(b)(3), as well as any other entity that is
disregarded as an entity separate from you for purposes of the
IRC, it is likewise disregarded as a separate entity for purposes
of the IITA. You must include all items of income, deduction, loss,
credit, etc., from such entities on your return as if they were
earned or incurred by you directly.
If you are an S corporation that is a member of a unitary business
group, see the instructions for Illinois Schedule UB, Combined
Apportionment for Unitary Business Group, and “What if I am a
member of a unitary group?” in the general instructions below
for information about filing requirements. S corporations may be
required to apportion their business income as members of a
unitary group, but cannot file a combined return."

This indicated to me that I need to file. However, my concern is that if I file this year, they will realize I didn't file last.

Which is why you would be best served by a quick consult with a local tax pro.