On June 16, 2026, Illinois Governor J.B. Pritzker signed S.B. 3019, which, effective for tax years ending on or after December 31, 2026, decouples the federal tax treatment of gains from Qualified Small Business Stock (QSBS) by requiring the excluded gains to be added back to the Illinois tax base. As a result, founders, early employees, investors, family offices, partnerships, and fiduciaries may preserve the federal QSBS exclusion but still have Illinois taxable income from the same sale. Calendar-year taxpayers that completed QSBS sales during 2026 should evaluate whether the Illinois addback applies before filing 2026 Illinois returns or finalizing estimated-tax positions. Fiscal-year taxpayers should separately confirm the taxable year to which the rule applies.

Download Whitepaper