Illinois Film Production Withholding Tax Changes

IL DOR Informational Bulletins

Published December 12th, 2025

Detected March 13th, 2026

Summary

The Illinois Department of Revenue has issued guidance clarifying changes to film production withholding income tax requirements. Beginning December 12, 2025, both production companies and loan-out companies have specific responsibilities for withholding, reporting, and remitting Illinois income tax on compensation for services performed in the state.

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What changed

This bulletin from the Illinois Department of Revenue (IDOR) details amendments to the Illinois Income Tax and Film Production Services Tax Credit Act, effective December 12, 2025. Public Act 104-0453 clarifies the withholding tax responsibilities for both production companies and loan-out companies regarding compensation for services performed in Illinois. Production companies must withhold income taxes from payments to loan-out companies and are responsible for making tax payments (monthly or semi-weekly) and filing quarterly withholding returns (Form IL-941). Loan-out companies also have reporting obligations.

Companies involved in film, video, commercial, or television productions accredited by the Illinois DCEO need to review these updated requirements. Production and loan-out companies that do not have an active Illinois withholding account must register with IDOR. The changes necessitate a review of payroll processes and registration status to ensure compliance with the new reporting and remittance obligations for services rendered on or after December 12, 2025. Failure to comply could result in penalties.

What to do next

Review Public Act 104-0453 and IDOR guidance on film production withholding tax.
Ensure production and loan-out companies are registered with IDOR for withholding tax.
Update payroll processes to comply with new withholding, reporting, and remittance requirements for services performed on or after December 12, 2025.

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FY 2026-16
February 2026

David Harris, Director

This bulletin is written to inform you of recent changes; it does not replace statutes, rules and regulations, or court decisions.

For more information visit: tax.illinois.gov

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FY 2026-16, Changes to Withholding Income Tax for Film Production and Loan-Out Companies

Beginning on or after December 12, 2025, Public Act (P.A.) 104-0453 amends the Illinois Income Tax and Film Production Services Tax Credit Act. The amendment clarifies the responsibilities of production companies (or their payroll service) and loan-out companies to pay and report Illinois income tax withheld from compensation for services performed in Illinois.

What is a production company?

A “production company” is a corporation or other entity that creates media such as film, video, commercial, or television productions accredited by the Illinois Department of Commerce & Economic Opportunity (DCEO) pursuant to the Film Production Services Tax Credit Act of 2008.

What is a loan-out company?

A “loan-out company” is a personal service corporation or other entity that is under contract with a production company to provide specified individual personnel, such as artists, crew, actors, producers, or directors for the performance of services used directly in a production.

Note: “Loan-out company” does not include entities contracted with the taxpayer to provide goods or ancillary contractor services such as catering, construction, trailers, equipment or transportation.

How do I register with the Illinois Department of Revenue (IDOR) to pay and report withholding income tax?

For production and loan-out companies that do not already have an active Illinois withholding income tax account with IDOR, you may register electronically using MyTax Illinois, complete and mail Form REG-1, Illinois Business Registration Application, or visit a regional office.

What are the filing changes for 2026?

For 2026, both production companies and loan-out companies are required to report the withholding income tax paid or paid on their behalf using Form IL-941, Illinois Withholding Income Tax Return.

Production companies must withhold Illinois income taxes for compensation paid to loan-out companies and

make either monthly or semi-weekly IL-501 payments of the Illinois income taxes withheld;
file a quarterly Form IL-941 to report wages and withholding paid on behalf of the loan-out companies; and
report quarterly to the loan-out companies any withholding income tax amounts paid on their behalf.
Loan-out companies are considered the employer of record and must report withholding income tax for each employee. As the employer of record, you must
file a quarterly Form IL-941 to report wages and withholding income tax amounts paid on behalf of the loan-out company; and
report annually to each employee any distributions of withholding income tax made by the production company.
For information on payment requirements, see Publication 131, Withholding Income Tax Payment and Filing Requirements.

Where can I find additional information?

For more information on these withholding income tax changes, see our Film Production Withholding Income Tax page.

More updates and resources, along with special instructions for filing Form IL-941, and any new required forms, will be added to the IDOR website as they become available.