Illinois Cottage Food Laws: Registration, Labeling, and Sales

Illinois cottage food laws let you make and sell many homemade foods without a commercial kitchen, as long as you register each year with your local health department, pass a certified food safety exam, follow the labeling rules, and sell directly to consumers inside the state. The framework sits in the Food Handling Regulation Enforcement Act (410 ILCS 625/4), and there is no longer a cap on how much you can earn — the earlier $36,000 limit was removed. What is still tightly controlled is what you can make, how you label it, and where you can sell it.

Register and Qualify

Every cottage food operation must register annually with the local health department in the county or municipality where the operator lives.¹ If your county has no health department, it contracts with a neighboring county’s. The department issues a certificate of registration with an identifying number, and the annual fee is capped at $50.²

You have to produce the food in the kitchen of your primary home or in an appropriately equipped kitchen on a farm. The statute defines a cottage food operation as one run by a person who prepares food or drink in that residential or farm kitchen for direct sale by the owner, a family member, or an employee.¹

Everyone who prepares or packages products for the operation must complete an ANSI-accredited Certified Food Protection Manager course and pass its exam.³ That is a higher standard than basic food handler training, covering temperature control, cross-contamination, and allergen awareness. Also check your municipality’s home occupation ordinance before you start; selling from a residence can be subject to local zoning that applies to any home-based business.

What You Can and Cannot Sell

Since January 1, 2018, Illinois treats all food and drink as allowed unless the statute specifically prohibits them.¹ That covers baked goods, jams and jellies, candy, granola, popcorn, dried herbs, acidified foods, fermented foods, salad dressings, and a lot more.

The prohibited list is specific:

Meat, poultry, fish, seafood, or shellfish
Dairy as a standalone product (allowed as an ingredient in non-hazardous baked goods, candy, or frosting like buttercream)
Eggs as a standalone product (cooked, not raw, eggs are allowed as ingredients in non-hazardous foods and frostings)
Pumpkin, sweet potato, custard, and cream pies; cheesecakes; and pastries with potentially hazardous fillings or toppings
Garlic in oil, unless the garlic oil has been acidified
Low-acid canned foods
Sprouts
Cut leafy greens, unless dehydrated, acidified, or blanched and frozen
Cut or pureed fresh tomato or melon, dehydrated tomato or melon, and frozen cut melon
Wild-harvested mushrooms (cultivated mushrooms as ingredients are fine)
Alcoholic beverages and kombucha

Acidified and fermented foods like pickles, hot sauce, and sauerkraut are allowed, but the finished product must have an equilibrium pH of 4.6 or below. You need either an approved lab-tested recipe or a food safety plan with pH testing to prove it, and the health department can ask for those records.¹ Eyeballing acidity is not enough.

One boundary worth flagging: honey sold in its unaltered form is regulated by the USDA and sits outside the cottage food law entirely. Add an ingredient (whipped honey butter, infused honey) and the resulting product becomes a cottage food item, subject to all the labeling and safety rules below.

How to Label Your Products

Every product must be prepackaged with a prominent, easy-to-read label. Under the statute and the Illinois Food, Drug and Cosmetic Act, the label must include:²

The name and address of the cottage food operation
The common name of the product (for example, “chocolate chip cookies”)
A complete ingredient list in descending order of predominance by weight
Major food allergens, clearly identified
This exact disclaimer: “This product was produced in a home kitchen not inspected by a health department that may also process common food allergens.”

Allergen labeling follows federal law. The Food Allergen Labeling and Consumer Protection Act originally identified eight major allergens: milk, eggs, fish, crustacean shellfish, tree nuts, peanuts, wheat, and soybeans.⁴ The FASTER Act added sesame as the ninth, effective January 1, 2023.⁵

You also have to display the disclaimer where you sell. At a farmers’ market booth, use a placard. For online sales, the disclaimer must appear on the sales page at the point of purchase.²

Where You Can Sell (and Where You Cannot)

Sales have to be direct to consumers for their own use. A retailer or restaurant cannot buy your product to resell. Within that limit, the allowed venues are broad:²

Farmers’ markets and mobile farmers’ markets
Fairs, festivals, and public events
Online sales
Pickup from your home or farm
Delivery to the customer
Pickup from a third-party location, with the property owner’s consent
Shipping within Illinois, limited to non-potentially-hazardous food sealed in tamper-evident packaging

You cannot ship across state lines. That would be interstate commerce and would trigger federal regulation. If you sell inside a craft mall or pop-up in a retail space, you or a direct employee must be physically present to handle the sales. Renting a shelf and leaving product for someone else to sell is not allowed.¹

One registration is enough for the whole state. Register in your home county, then sell at markets and events anywhere in Illinois. Keep a copy of your certificate with you; any local health department can ask to see it.²

Taxes on Cottage Food Income

Cottage food income is taxable. The IRS treats you as self-employed, and if your net self-employment earnings reach $400 or more in a year, you owe self-employment tax (Social Security and Medicare) on top of income tax. Report the income on Schedule C, and if you expect to owe at least $1,000 for the year, set money aside for quarterly estimated payments.

If customers pay through apps like Venmo, PayPal, or Square, the processor is required to issue a Form 1099-K once total payments for goods or services exceed $20,000 across more than 200 transactions in a calendar year.⁶ Some processors send the form at lower thresholds. You owe tax on all your income regardless of whether a 1099-K arrives.

On the state side, Illinois eliminated its 1% reduced-rate sales tax on grocery items effective January 1, 2026, so most qualifying food items are now exempt from state sales and use tax. Individual products can still be taxable depending on category and how they are sold, so check with the Illinois Department of Revenue if you are not sure.

Insurance and Business Structure

Illinois does not require cottage food operators to carry liability insurance. Standard homeowners’ policies generally exclude business activity at home, which means an injury to a customer picking up an order, or a foodborne illness claim, can reach your personal assets.

Three coverages are commonly used together: general liability for third-party injury and property damage, product liability for claims arising from the food itself (including unlabeled allergens), and business personal property for equipment like mixers, dehydrators, and market canopies. Forming an LLC adds a layer between personal and business liabilities, but it is not a substitute for insurance; insurance pays for defense and settlements, while an LLC only limits what creditors can reach beyond your coverage.

When the Health Department Steps In

Cottage food operations are specifically exempt from routine health inspections. No one shows up at your home kitchen under normal circumstances.¹

That changes when the health department receives a consumer complaint, learns of a foodborne illness outbreak, gets a tip from another local health department, or has reason to believe your product is misbranded or adulterated. At that point it can:⁷

Inspect your kitchen and charge a reasonable fee for the inspection
Impose penalties and order you to stop selling until the problem is resolved to its satisfaction
Revoke your registration if the problem cannot be fixed

The broader Food Handling Regulation Enforcement Act also lets the Department of Public Health and local departments seek a court injunction against any food business that violates state food-handling laws, prohibiting further sales until you come into compliance.⁷ Most enforcement starts with a complaint from a customer or a competing market vendor, not a random audit. Accurate labels, organized records, and products that stay inside the permitted list are what keep you out of that pipeline.

1
Justia Law. Illinois Code 410 ILCS 625 – Food Handling Regulation Enforcement Act
2
Illinois General Assembly. Illinois Code 410 ILCS 625/4 – Cottage Food Operation
3
Illinois Department of Public Health. Food Handler Training
4
U.S. Food and Drug Administration. Food Allergen Labeling and Consumer Protection Act of 2004
5
U.S. Food and Drug Administration. The FASTER Act – Sesame Is the Ninth Major Food Allergen
6
Internal Revenue Service. Understanding Your Form 1099-K
7
Illinois General Assembly. Illinois Code 410 ILCS 625 – Food Handling Regulation Enforcement Act – Full Text