Impact of Illinois Crypto Tax Law on DeFi and Retail Investors - Tekedia
Illinois has enacted a crypto tax law that expands reporting requirements for DeFi protocols and brokers, aligning with federal 1099-DA rules and imposing state-level penalties for non-compliance.
Aforeworn detected this change in the Crypto & DeFi Tax Reporting space on July 6, 2026 and published this briefing so affected operators are forewarned rather than caught off guard. It is rated High urgency. Crypto exchanges, brokers, DeFi protocols, and high-volume traders operating in Illinois should confirm how it applies to their specific situation before acting. There is a time constraint attached: December 31, 2024 (for system updates to handle 2025 transactions). Acting after that point can mean penalties, a lapsed licence, or lost eligibility — exactly the kind of surprise Aforeworn exists to prevent. Aforeworn monitors Crypto & DeFi Tax Reporting continuously and turns every detected change into a plain-English briefing like this one, so you always know first. Forewarned is forearmed.
What changed
Illinois now requires brokers and DeFi protocols to report digital asset transactions to the state, including cost basis and wash sale adjustments, effective for tax year 2025.
Who it affects
Crypto exchanges, brokers, DeFi protocols, and high-volume traders operating in Illinois
What you must do
Update tax reporting systems to capture Illinois-specific data fields, ensure compliance with 1099-DA issuance, and adjust cost basis calculations for wash sales.
Deadline
December 31, 2024 (for system updates to handle 2025 transactions)
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