Illinois Cottage Food Laws: Registration, Labeling, and Penalties

Illinois cottage food laws let you make and sell many homemade foods directly to consumers from your home or farm kitchen, as long as you register annually with your local health department, pass a Certified Food Protection Manager exam, label your products correctly, and stay within the state’s list of permitted foods. The rules sit in the Food Handling Regulation Enforcement Act at 410 ILCS 625/4, rewritten by Public Act 102-0633. There is no longer any cap on how much you can earn.

Who Can Register and How

Every cottage food operation must register each year with the local health department in the county or municipality where the operator lives.¹ The department issues a certificate 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 makes food or drinks in that residential or farm kitchen for direct sale by the owner, a family member, or an employee.¹

Every operator, and anyone preparing or packaging products for the operation, must complete an ANSI-accredited Certified Food Protection Manager course and pass the exam.³ This is a step above basic food handler training; it covers temperature control, cross-contamination, and allergens. Check with your municipality on top of that, because home-based businesses may be subject to local zoning or home occupation ordinances.

What You Can and Cannot Make

Illinois is permissive: as of January 1, 2018, all food and drink are allowed unless specifically prohibited. That means baked goods, jams, jellies, candy, granola, popcorn, dried herbs, acidified foods, fermented foods, and salad dressings are all on the table, so long as nothing on the prohibited list is involved.¹

The following cannot be sold as cottage foods:

Meat, poultry, fish, seafood, or shellfish
Dairy as a standalone product (dairy is 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 pies, sweet potato pies, cheesecakes, custard pies, cream pies, 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, including pickles, hot sauce, and sauerkraut, are allowed, but with strings attached. The finished product must have an equilibrium pH of 4.6 or below, and you need either an approved lab-tested recipe or a food safety plan with pH testing to prove it.¹ Eyeballing acidity is not enough. The health department can ask for your records.

One boundary worth knowing: unaltered honey is regulated by the USDA and sits outside the cottage food law. The moment you add anything to it, such as whipped honey butter or an infused honey, the product becomes a cottage food item and has to meet every labeling and safety rule in this article.

Labeling Your Products

Every cottage food product has to be prepackaged with a prominent, easy-to-read label. The statute and the Illinois Food, Drug and Cosmetic Act require the label to 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
The 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 under the Food Allergen Labeling and Consumer Protection Act, which originally named eight major allergens: milk, eggs, fish, crustacean shellfish, tree nuts, peanuts, wheat, and soybeans.⁴ The FASTER Act added sesame as the ninth major allergen effective January 1, 2023, so your labels now have to account for all nine.⁵

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

Where You Can Sell

Illinois gives cottage food operators more flexibility on sales channels than many realize. Products have to go directly to consumers for their own use and cannot be resold by retailers or restaurants, but “direct to consumers” covers a lot of ground: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 becomes interstate commerce and triggers federal regulation. If you sell at a craft mall or pop-up inside a retail space, you or a direct employee must be physically present to handle sales. Renting a shelf and leaving products behind for someone else to sell is not allowed.¹

One registration covers the whole state. You can register in your home county and sell at markets elsewhere in Illinois, but you have to be able to produce a copy of your certificate of registration if any local health department asks.²

Taxes on Cottage Food Income

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

If you take payments through apps like Venmo, PayPal, or Square, the processor is required to send you a Form 1099-K when your 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 income whether or not a 1099-K ever shows up.

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 how they are categorized and sold. The Illinois Department of Revenue can confirm whether your specific products need sales tax collection.

Insurance and Liability

Illinois does not require cottage food operators to carry liability insurance. Going without it is still a serious risk. Standard homeowners’ policies typically exclude business activities at home, including injuries to customers who come to pick up orders and claims of foodborne illness. If someone sues, your personal assets are on the line.

Three coverages are worth looking at:

General liability, for third-party injury and property damage, like a customer slipping on your steps during a pickup
Product liability, for claims arising from the food itself, including foodborne illness and unlabeled allergens
Business personal property, for repair or replacement of equipment like mixers, dehydrators, or market canopies

Forming an LLC adds a layer between personal and business liabilities, but it is not a substitute for insurance. Insurance pays defense costs and settlements; an LLC only limits what creditors can reach if a judgment exceeds your coverage. Many operators start as sole proprietors and add an LLC as sales grow.

What Happens If You Break the Rules

The Illinois Department of Public Health and local health departments share enforcement. Under normal circumstances, no one inspects your home kitchen; cottage food operations are specifically exempt from routine health inspections.¹ That protection ends the moment something goes wrong.

If 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, 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 the department’s satisfaction
Revoke your registration if the problem cannot be fixed, which shuts down your operation

The broader Food Handling Regulation Enforcement Act also lets the Department of Public Health and local departments ask a court for an injunction against any food business that violates state food-handling laws. An injunction prohibits you from selling food until you come back into compliance.⁷ Most enforcement starts with a complaint from a customer or a competing vendor, not a random audit. Keeping your labels accurate, your pH records organized, and your products on the permitted list is how most operators stay out of trouble.

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