reglab/statecodes huggingface dataset:
Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart B - CREDITS › Section 100.2197 - Foreign Tax Credit (IITA Section 601(b)(3))

Current through Register Vol. 48, No. 28, July 12, 2024
a) IITA Section 601(b)(3) provides that
the aggregate amount of tax which is imposed upon or measured by income
				and which is paid by a resident for a taxable year to another state or states
				on income which is also subject to the tax imposed by IITA Section 201(a) and
				(b) shall be credited against the tax imposed by IITA Section 201(a) and (b)
				otherwise due under the IITA for that taxable year.
(IITA Section
				601(b)(3))
b) Definitions
				applicable to this Section.
1) Tax qualifying
				for the credit. A tax qualifies for the credit only if it is
imposed
				upon or measured by income
and is
paid by an Illinois
				resident
to another state
on income which is also subject to
				Illinois income tax.
A) A tax
				"imposed upon or measured by income" shall mean an income tax or tax on profits
				imposed by a state and deductible under IRC section 164(a)(3). The term shall
				not include penalties or interest imposed with respect to the tax.
B) A tax is "paid by an Illinois resident" to
				another state "on income which is also subject to Illinois income tax" only to
				the extent the income included in the tax base of the other state is also
				included in base income computed under IITA Section 203 during a period in
				which the taxpayer is an Illinois resident. Thus, for example, income tax paid
				to another state on retirement income excluded from base income under IITA
				Section 203(a)(2)(F) does not qualify for the credit, nor would income derived
				from a partnership or Subchapter S corporation whose tax year ends during a
				period in which the taxpayer is not an Illinois resident. See IRC section
				706(a) and IRC section 1366(a)(1). If tax is paid to another state on income
				that is not included in base income or on income attributable to a period when
				the taxpayer was not a resident of Illinois, as well as on income that is
				included in base income and attributable to a period in which the taxpayer was
				a resident of Illinois, the amount of tax qualifying for the credit shall be
				determined by multiplying the tax paid by a fraction equal to the income taxed
				by the other state that is included in base income and attributable to a period
				in which the taxpayer was a resident of Illinois divided by the total tax base
				on which the other state's tax was computed.
Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart B - CREDITS › Section 100.2198 - Economic Development for a Growing Economy Credit (IITA 211)

Current through Register Vol. 48, No. 28, July 12, 2024
a)
For tax
				years beginning on or after January 1, 1999, a taxpayer who has entered into an
				Agreement under the Economic Development for a Growing Economy Tax Credit
				Act
[35 ILCS 10 ]
				(EDGETCA)
,
shall be allowed
a credit against the tax
				imposed by
the Illinois Income Tax Act (IITA)
Section 201(a)
				and (b) in an amount to be determined in the Agreement.
(IITA Section
				211)
b) The credit shall be
				computed as follows:
1)
The credit
				allowed shall not exceed the Incremental Income Tax with respect to the
				project.
(IITA Section 211(1)) EDGETCA Section 5-5 defines Incremental
				Income Tax as the
total amount withheld during the taxable year from
				the compensation of new employees, and if applicable, retained employees under
				Article 7 of the
IITA
arising from employment at a project
				that is the subject of an Agreement.
2)
The amount of the credit allowed
				during the tax year plus the sum of all amounts allowed in prior years shall
				not exceed 100% of the aggregate amount expended by the taxpayer during all
				prior tax years on approved costs defined by Agreement.
(IITA Section
				211(2))
3) Pursuant to IITA Section
				211(3)
, the amount of credit shall be determined on an annual basis;
				provided, however, that:
A) except in
				the case of a taxpayer described in subsection (b)(3)(B)
, the credit
				against any State tax liability may not extend beyond 10 taxable years after
				the project is first approved and may not extend beyond the expiration of the
				Agreement;
B) in the case
				of a taxpayer certified by the Department of Commerce and Economic Opportunity
				(DCEO) under the Corporate Headquarters Relocation Act, the credit may not
				extend beyond 15 taxable years and may not extend beyond the expiration of the
				Agreement; provided, that the taxpayer may not claim for any tax year during
				that period more than 60% of the credit otherwise allowed for that tax year
				under the EDGETCA (see EDGETCA Section 5-45);
C) a credit earned within the applicable
				period specified in subsection (b)(3)(A) or (B) may be carried forward beyond
				that period pursuant to IITA Section 211(4).
4)
The credit may not exceed the
				amount of taxes imposed pursuant to
IITA Section
201(a) and
				(b).
(IITA Section 211(4))
5) In the case of an election under Section
				100.7380(a), no
				credit shall be allowed under IITA Section 211 or this Section for the taxable
				year of the election.
Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart B - CREDITS › Section 100.2199 - Illinois Earned Income Tax Credit (IITA Section 212)

Current through Register Vol. 48, No. 28, July 12, 2024
a)
With respect to the federal earned
				income tax credit allowed for the taxable year under Section 32 of the federal
				Internal Revenue Code, each individual taxpayer shall be allowed a credit
				against the tax imposed by IITA
Section 201(a) and
				(b)
.
(IITA Section 212(a)) The amount of the credit allowed
				shall be equal to:
1)
5% of the
				federal tax
cr
edit for each taxable year beginning on or after
				January 1, 2000 and ending prior to December 31, 2012;
2)
7.5 % of the
				federal tax credit for each taxable year beginning on or after January 1, 2012
				and ending prior to December 31, 2013;
3)
10% of the federal tax credit for
				each taxable year beginning on or after January 1, 2013 and beginning prior to
				January 1, 2017;
4)
14% of the federal tax credit for each taxable year beginning on or
				after January 1, 2017 and beginning prior to January 1,
				2018;
5)
18% of
				the federal tax credit for each taxable year beginning on or after January 1,
				2018 and beginning prior to January 1, 2023; and
6)
20% of the federal tax credit for
				each taxable year beginning on or after
January 1,
				2023.
(IITA Section 212(a))
Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart C - NET OPERATING LOSSES OF UNITARY BUSINESS GROUPS OCCURRING PRIOR TO DECEMBER 31, 1986 › Section 100.2200 - Net Operating Losses Occurring Prior to December 31, 1986, of Unitary Business Groups: Treatment by Members of the Unitary Business Group. (IITA Section 202) - Scope

Current through Register Vol. 48, No. 28, July 12, 2024
a) This section
				states rules for the allocation of net operating losses that were incurred in
				taxable years ending prior to December 31, 1986. These rules apply to various
				situations in which the combined method of apportionment has been employed by
				the corporation incurring the loss either in the year of the loss, or in the
				year to which the loss is carried back or forward. For rules applicable to net
				operating losses occurring on or after December 31, 1986, see Sections
				100.2300
				through
				100.2350.
b) The rules are equally applicable to
				situations involving the combined apportionment method:
1) as it existed prior to Public Act 82-1029
				(which applies to taxable years ending on or after December 31,1982, and which
				provides the Illinois statutory definition for unitary business group),
				and
2) as it exists after Public
				Act 82-1029, but before Public Act 84-1042 (which applies to taxable years
				ending on or after December 31, 1986, and which provides for Illinois net
				losses and Illinois net loss deductions).
Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart C - NET OPERATING LOSSES OF UNITARY BUSINESS GROUPS OCCURRING PRIOR TO DECEMBER 31, 1986 › Section 100.2210 - Net Operating Losses Occurring Prior to December 31, 1986, of Unitary Business Groups: Treatment by Members of the Unitary Business Group (IITA Section 202) - Definitions

Current through Register Vol. 48, No. 28, July 12, 2024
Federal taxable income for Illinois income tax purposes and
				  Federal NOL for Illinois income tax purposes mean:
a) in the case of a corporation that files
				its own (unconsolidated) federal income tax return for the year, the amount of
				taxable income or NOL reflected on such return or if altered by IRS audit or
				amended return, as finally determined for federal income tax purposes within
				the meaning of IITA Section 506(b) increased in any case by the amount of any
				net operating loss deduction (for carryback or carryforward of net operating
				losses from other years) actually reflected by the corporation on that federal
				return.
b) in the case of a
				corporation that is a member of an affiliated group filing a consolidated
				federal income tax return for the year, the amount of taxable income or NOL
				which such corporation would have had it filed a separate return for federal
				income tax purposes for the taxable year and each preceding taxable year for
				which it was a member of an affiliated group, such calculation being made as if
				the elections of
				26 USC
				243(b)(2) and
				172(b)(3)(C)
				had been in effect for all such years, the amount calculated hereunder being
				increased in any case by the amount of any net operating loss deduction (for
				carryback or carryforward of any net operating losses from other years) to
				which the corporation would otherwise be entitled under this
				subsection.
c) in the case of the
				corporation that is not required to file a federal income tax return for the
				year, the equivalent federal taxable income which it computes under IITA
				Section 203(e); increased in any case by the amount of any net operating loss
				deduction (for carryback or carryforward of net operating losses from other
				years) to which the corporation would otherwise be entitled under that
				section.
Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart C - NET OPERATING LOSSES OF UNITARY BUSINESS GROUPS OCCURRING PRIOR TO DECEMBER 31, 1986 › Section 100.2220 - Net Operating Losses Occurring Prior to December 31, 1986, of Unitary Business Groups: Treatment by Members of the Unitary Business Group. (IITA Section 202) - Current Net Operating Losses: Offsets Between Members

Current through Register Vol. 48, No. 28, July 12, 2024
The computation of combined federal taxable income of a
				  unitary business group may include federal NOLs for Illinois income tax
				  purposes of various members of the group. These federal NOLs for Illinois
				  income tax purposes of group members will be used in the year they occur to
				  offset federal taxable incomes for Illinois income tax purposes of other
				  members of the group in arriving at combined federal taxable income.
EXAMPLE: Corporations A, B, C and D are members of a unitary
				  business group. Corporations A, B and C had 1982 federal taxable incomes for
				  Illinois income tax purposes of $100,000, $200,000, and $300,000, respectively.
				  Corporation D had a 1982 federal net operating loss for Illinois income tax
				  purposes of $150,000. The group's 1982 combined federal taxable income is
				  $450,000.
Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart C - NET OPERATING LOSSES OF UNITARY BUSINESS GROUPS OCCURRING PRIOR TO DECEMBER 31, 1986 › Section 100.2250 - Net Operating Losses Occurring Prior to December 31, 1986, of Unitary Business Groups: Treatment by Members of the Unitary Business Group: (IITA Section 202) - Deadline for Filing Claims Based on Net Operating Losses Carried Back From a Combined Apportionment Year

Current through Register Vol. 48, No. 28, July 12, 2024
A claim for refund based upon the carryback of a share of a
				  combined federal net operating loss may be filed at any time within the period
				  stated by IITA Section 911(b). This section generally requires that such a
				  claim be filed no later than 2 years and 20 days after the date the "federal
				  change" was finalized by IRS payment to the taxpayer. If taxpayer does not have
				  occasion to receive an IRS refund on the NOL because it was absorbed for
				  federal income tax purposes by incomes of other members of the federal
				  affiliated groups, or because the refund was a consolidated refund for federal
				  purposes, then the period of limitation for filing the Illinois claim is as
				  stated in Section
				  100.5030
				  of this Part.
Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart D - ILLINOIS NET LOSS DEDUCTIONS FOR LOSSES OCCURRING ON OR AFTER DECEMBER 31, 1986 › Section 100.2300 - Illinois Net Loss Deduction for Losses Occurring On or After December 31, 1986 (IITA 207)

Current through Register Vol. 48, No. 28, July 12, 2024
a) In General - For
				taxable years ending on or after December 31, 1986, IITA Section 207 provides
				for computation of Illinois net losses for corporations (including Subchapter S
				Corporations), trusts, estates and partnerships. If, after applying all of the
				modifications provided for in IITA Sections 203(b)(2), 203(c)(2) or 203(d)(2)
				and the allocation and apportionment provisions of IITA Article 3, the
				taxpayer's net income results in an Illinois net loss, such loss shall be
				allowed as a carryback or carryover deduction in the manner allowed under
				Section 172 of the Internal Revenue Code, as in effect during the loss year for
				tax years ending prior to December 31, 1999. For losses incurred in tax years
				ending on or after December 31, 1999, the Illinois net loss is allowed as a
				carryback to the 2 preceding taxable years and as a carryforward to the 20
				succeeding tax years. The rules for members of a unitary business group are set
				out in Sections
				100.2340
				and
				100.2350.
				Sections
				100.2200
				through
				100.2250
				which also relate to net operating losses of unitary business groups are only
				applicable to losses incurred in taxable years ending prior to December 31,
				1986. Section
				100.9410(f)
				sets forth the statute of limitations for reporting an Illinois net loss
				carryback. An Illinois net loss deduction is not available for individuals.
				Losses incurred by individuals are recognized for Illinois tax purposes in the
				computation of adjusted gross income for federal tax purposes.
b) Definitions
1) "Illinois net loss" means the amount of
				loss determined under IITA Section 207. That is, it is the amount of loss, if
				any, after applying the modifications and allocation and apportionment
				provisions of the Act, as calculated for tax years occurring on or after
				December 31, 1986.
2) "Illinois net
				loss deduction" means the deduction which may be carried pursuant to IITA
				Section 207.
3) "Net operating
				loss" means either: The amount of net operating loss determined for federal tax
				purposes; or for losses occurring prior to December 31, 1986, the amount
				recognized for Illinois tax purposes.
4) "Net operating loss deduction" means
				either: The amount of deduction recognized for federal tax purposes; or for
				losses occurring prior to December 31, 1986, the amount recognized for Illinois
				tax purposes.
5) The following
				terms have the following meanings: NOL - Net Operating Loss NOLD - Net
				Operating Loss Deduction corp. - corporation Treas. - Treasury Reg. -
				Regulation Sec. - Section Apport. - Apportionment Ill. - Illinois sep. -
				separate comb. - combined
Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart D - ILLINOIS NET LOSS DEDUCTIONS FOR LOSSES OCCURRING ON OR AFTER DECEMBER 31, 1986 › Section 100.2310 - Computation of the Illinois Net Loss Deduction for Losses Occurring On or After December 31, 1986 (IITA 207)

Current through Register Vol. 48, No. 28, July 12, 2024
a)
				The amount of the Illinois net loss deduction allowed by IITA Section 207 for
				any taxable year is the aggregate of the Illinois net loss carryovers and
				Illinois net loss carrybacks to that taxable year. The steps to be taken in
				determining the amount of the deduction are as follows:
1) Compute the Illinois net loss in
				accordance with Section
				100.2320
				(adjusted as may be required under subsection (c) of this Section) for any
				preceding or succeeding taxable year from which a net loss may be
				carried.
2) Compute the Illinois
				net loss carryovers and carrybacks from the preceding or succeeding taxable
				years in accordance with Section
				100.2330
				(adjusted as may be required under subsection (c) of this Section).
3) Add the Illinois net loss carryovers and
				carrybacks.
Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart D - ILLINOIS NET LOSS DEDUCTIONS FOR LOSSES OCCURRING ON OR AFTER DECEMBER 31, 1986 › Section 100.2350 - Illinois Net Losses and Illinois Net Loss Deductions, for Losses Occurring On or After December 31, 1986, of Corporations that are Members of a Unitary Business Group: Changes in Membership

Current through Register Vol. 48, No. 28, July 12, 2024
a) Member entering the group from a separate
				return year. IITA Section 207 provides that the amount of Illinois net loss
				that is available as a carryback or carryover is determined after applying the
				allocation and apportionment provisions of Article 3. That Section does not
				limit the amount of Illinois net loss that may be carried into a given year. As
				a consequence, no such limitation shall apply.
1) Example 1:
A) In 1986, Corporation A was not a member of
				a unitary business, and it reported a $170 Illinois net loss on a separate
				return. The loss could not be carried back. Also in 1986, Corporation B and
				Corporation constituted a unitary business group, and they reported Illinois
				net income. On January 1, 1987, B purchased the stock of A, and due to their
				operations A became part of the unitary business group with B and C. The
				following facts apply for 1987:
Corp. A
Corp. B
Corp. C
Combined
Base
Income
1,000
Business
Income
1,000
Apportionment
Percentage
10%
15%
25%
50%
Apportionment
Income
100
150
250
500
Illinois
net loss
deduction
(170)
---
---
(170)
Illinois
net
income
---
150
250
330
Loss
Carryover
(70)
B)
				If A, B, and C file separate returns using the combined apportionment method,
				A's $170 Illinois net loss deduction will be applied against A's income for
				that year, and A will have a $70 Illinois net loss carryover to 1988.B and C
				will report $150 and $250 of Illinois net income, respectively. If A, B, and C
				file a combined return, A's $170 Illinois net loss deduction will be applied
				against the group's combined income, and the combined group will report $330 of
				combined Illinois net income.
Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart E - ADDITIONS TO AND SUBTRACTIONS FROM TAXABLE INCOME OF INDIVIDUALS, CORPORATIONS, TRUSTS AND ESTATES AND PARTNERSHIPS › Section 100.2435 - Addition Modification for Student-Assistance Contribution Credit (IITA Sections 203(a)(2)(D-23), (b)(2)(E-16), (c)(2)(G-15), (d)(2)(D-10))

Current through Register Vol. 48, No. 28, July 12, 2024
a) For taxable
				years ending on or after December 31, 2009, IITA Section 203 requires a
				taxpayer to make an addition modification in computing base income equal to the
				credit allowable to the taxpayer under IITA Section 218(a), determined without
				regard to IITA Section 218(c). (IITA Section 203(a)(2)(D-23), (b)(2)(E-16),
				(c)(2)(G-15), (d)(2)(D-10)) IITA Section 218 allows a credit for certain
				amounts paid by an employer to an Illinois qualified tuition program. (See
				Section
				100.2510
				of this Part.)
b) For purposes of
				IITA Section 203 and this Section, the "credit allowable to the taxpayer" that
				must be added to base income is the amount of the credit under IITA Section 218
				eligible to be claimed by the taxpayer for a taxable year on a return filed
				with the Department, without reduction for any part of the credit that must be
				carried forward to taxable years following the credit year because the credit
				exceeds the taxpayer's liability. (See IITA Section 203(a)(2)(D-23),
				(b)(2)(E-16), (c)(2)(G-15), (d)(2)(D-10).)
Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart E - ADDITIONS TO AND SUBTRACTIONS FROM TAXABLE INCOME OF INDIVIDUALS, CORPORATIONS, TRUSTS AND ESTATES AND PARTNERSHIPS › Section 100.2450 - IIT Refunds (IITA Section 203(a)(2)(H), (b)(2)(F), (c)(2)(J) and (d)(2)(F))

Current through Register Vol. 48, No. 28, July 12, 2024
a) The "tax benefit
				rule" codified in Internal Revenue Code section 111 applies when a taxpayer
				receives a tax benefit from claiming a deduction for an expense in one year and
				recovers or is compensated or reimbursed for the expense in a subsequent
				taxable year. Under the tax benefit rule, the recovery or compensation for the
				expense is included in income in the year it is received. Thus, when the
				taxpayer deducts State income taxes paid in one taxable year and receives a
				refund of some or all of the payment in a subsequent year, the tax benefit rule
				requires the taxpayer to include the refund in federal taxable income or
				adjusted gross income for the taxable year of the refund. If, however, the
				expense did not reduce the taxpayer's federal income tax, the recovery or
				compensation is excluded from income under Internal Revenue Code section
				111(a).
b) The regular income tax
				imposed directly on an individual is allowed only as an itemized deduction for
				federal income tax purpose and so is not deducted in computing adjusted gross
				income. Because Illinois does not allow itemized deductions, and any Personal
				Property Tax Replacement Income Tax deducted in computing adjusted gross income
				because it is passed through from a partnership, Subchapter S corporation, or
				trust is added back under IITA Section 203(a)(2)(B), IITA Section 203(a)(2)(H)
				allows individuals to subtract any such refund included in adjusted gross
				income. The purpose of this subtraction and the addition of IITA Section
				203(a)(2)(B) is to render the payment of Illinois income tax and replacement
				income tax neutral in the computation of adjusted gross income.
c) All other taxpayers are required to add
				back any Illinois regular income tax or replacement tax deducted in computing
				their federal taxable income. (See IITA Section 203(b)(2)(B) (corporations),
				(c)(2)(C) (trusts and estates) and (d)(2)(B) (partnerships)). Because these
				taxpayers receive no Illinois income tax benefit from these deductions, any
				refund of Illinois regular income tax or replacement tax that is included in
				the taxpayer's federal taxable income may be subtracted under IITA Section
				203(b)(2)(F) (corporations), (c)(2)(J) (trusts and estates) and (d)(2)(F)
				(partnerships).
Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart E - ADDITIONS TO AND SUBTRACTIONS FROM TAXABLE INCOME OF INDIVIDUALS, CORPORATIONS, TRUSTS AND ESTATES AND PARTNERSHIPS › Section 100.2465 - Claim of Right Repayments (IITA Section 203(a)(2)(P), (b)(2)(Q), (c)(2)(P) and (d)(2)(M))

Current through Register Vol. 48, No. 28, July 12, 2024
a) In
				computing base income, a taxpayer may subtract from federal taxable income or
				adjusted gross income an
amount equal to the amount of the deduction
				used to compute the federal income tax credit for restoration of substantial
				amounts held under claim of right for the taxable year pursuant to IRC section
				1341 or of any itemized deduction taken from adjusted gross income in the
				computation of taxable income for restoration of substantial amounts held under
				claim of right for the taxable year.
(IITA Section 203(a)(2)(P),
				(b)(2)(Q), (c)(2)(P) and (d)(2)(M))
b) For federal income tax purposes, if a
				taxpayer is required to include a receipt in taxable income under the "claim of
				right" principle because the taxpayer had an unrestricted right to the item
				when received, and is subsequently required to repay the item, the taxpayer
				must deduct the repayment in the year of repayment, rather than exclude the
				receipt from income. However, IRC section 1341 allows some taxpayers to claim a
				credit against their federal income tax liability in the year of repayment
				equal to the tax attributable to the inclusion of the receipt in taxable
				income, in lieu of the deduction. In order to avoid taxing income received
				under a claim of right that is subsequently repaid, IITA Section 203(a)(2)(P),
				(b)(2)(Q), (c)(2)(P) and (d)(2)(M) allows a taxpayer who claimed a credit under
				IRC section 1341 for a taxable year to subtract an amount equal to the amount
				of the repayment that would otherwise have been deductible in that taxable
				year.
c) In the case of an
				individual, the deduction allowed for repayment of claim of right income is an
				itemized deduction taken from adjusted gross income. Because, in the case of an
				individual, the computation of base income begins with the taxpayer's adjusted
				gross income, an individual is allowed no deduction for repayment of claim of
				right income unless expressly provided in IITA Section 203. (See IITA Section
				203(a)(1) and (h).) In 2011, Public Act 97-0507 amended IITA Section
				203(a)(2)(P) to allow individuals who had claimed an itemized deduction for
				repayment of claim of right income to subtract the amount of that deduction
				from their adjusted gross income. This amendment is not, by its terms, required
				to be applied prospectively only, and the subtraction will be allowed for any
				taxable year, subject to the statute of limitations for claims for
				refund.
Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart E - ADDITIONS TO AND SUBTRACTIONS FROM TAXABLE INCOME OF INDIVIDUALS, CORPORATIONS, TRUSTS AND ESTATES AND PARTNERSHIPS › Section 100.2470 - Subtraction of Amounts Exempt from Taxation by Virtue of Illinois Law, the Illinois or U.S. Constitutions, or by Reason of U.S. Treaties or Statutes (IITA Sections 203(a)(2)(N), 203(b)(2)(J), 203(c)(2)(K) and 203(d)(2)(G))

Current through Register Vol. 48, No. 28, July 12, 2024
a) In calculating
				base income, taxpayers are entitled to subtract
an amount equal to all
				amounts included in such total which are exempt from taxation by this State
				either by reason of its statutes or Constitution or by reason of the
				Constitution, treaties or statutes of the United States; provided that, in the
				case of any statute of this State that exempts income derived from bonds or
				other obligations from the tax imposed under this Act, the amount exempted
				shall be the interest net of bond premium amortization
(IITA
				203(a)(2)(N)). There are also provisions of Illinois law that exempt the income
				of certain obligations of state and local governments from Illinois income
				taxation (see subsection (f)).
b)
				Interest on obligations of the United States. A federal statute exempts stocks
				and obligations of the United States Government, as well as the interest on the
				obligations, from state income taxation (see
				31 USC
				3124(a) ).
1) "Obligations of the United States" are
				those obligations issued "to secure credit to carry on the necessary functions
				of government." Smith v. Davis (1944) 323 U.S. 111, 119, 89 L. Ed. 107, 113, 65
				S. Ct. 157, 161. The exemption is aimed at protecting the "Borrowing" and
				"Supremacy" clauses of the Constitution. Society for Savings v. Bowers (1955)
				349 U.S. 143, 144, 99 L. Ed. 2d 950, 955, 75 S. Ct. 607, 608. Hibernia v. City
				and County of San Francisco (1906) 200 U.S. 310, 313, 50 L. Ed. 495, 496, 26 S.
				Ct. 265, 266.
A) Tax-exempt credit
				instruments possess the following characteristics:
i) they are written documents;
ii) they bear interest;
iii) they are binding promises by the United
				States to pay specified sums at specified dates;
iv) they have congressional authorization
				which also pledges the faith and credit of the United States in support of the
				promise to pay. Smith v. Davis, supra.
Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart E - ADDITIONS TO AND SUBTRACTIONS FROM TAXABLE INCOME OF INDIVIDUALS, CORPORATIONS, TRUSTS AND ESTATES AND PARTNERSHIPS › Section 100.2480 - Enterprise Zone and River Edge Redevelopment Zone Dividend Subtraction (IITA Sections 203(a)(2)(J), 203(b)(2)(K), 203(c)(2)(M) and 203(d)(2)(K))

Current through Register Vol. 48, No. 28, July 12, 2024
a) Taxpayers are
				entitled to subtract from taxable income (adjusted gross income, in the case of
				an individual) an amount equal to dividends paid by a corporation which
				conducts business operations in an enterprise zone or zones created under the
				Illinois Enterprise Zone Act or in a river edge redevelopment zone or zones
				created under the River Edge Redevelopment Zone Act, and conducts all or
				substantially all of its operations in the enterprise zone or zones or the
				river edge redevelopment zone or zones (IITA Section 203(a)(2)(J),
				203(b)(2)(K), 203(c)(2)(M) and 203(d)(2)(K)).
1) Dividends received from a corporation that
				conducts all or substantially all of its operations in a river edge
				redevelopment zone or zones are eligible for subtraction under this Section
				only if received after July 12, 2006, the effective date of PA 94-1021, which
				enacted this subtraction.
2)
				Dividends received from a corporation that conducts all or substantially all of
				its operations in an enterprise zone or zone are eligible for subtraction under
				this Section only if received prior to August 7, 2012, the effective date of PA
				97-905, which repealed this subtraction.
Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart E - ADDITIONS TO AND SUBTRACTIONS FROM TAXABLE INCOME OF INDIVIDUALS, CORPORATIONS, TRUSTS AND ESTATES AND PARTNERSHIPS › Section 100.2490 - Foreign Trade Zone/High Impact Business Dividend Subtraction (IITA Sections 203(a)(2)(K), 203(b)(2)(L), 203(c)(2)(O), 203(d)(2)(M))

Current through Register Vol. 48, No. 28, July 12, 2024
a) Taxpayers are entitled to subtract from
				taxable income (adjusted gross income, in the case of an individual) an amount
				equal to dividends paid by a corporation that:
1) conducts business operations in a
				federally designated Foreign Trade Zone or Sub-Zone, and
2) is designated by the Department of
				Commerce and Community Affairs as a High Impact Business located in Illinois.
However, only dividends not eligible for the subtraction
				  provided in Section
				  100.2480
				  of this Part may be subtracted under this Section.
Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart F - BASE INCOME OF INDIVIDUALS › Section 100.2510 - Subtraction for Contributions to Illinois Qualified Tuition Programs (Section 529 Plans) (IITA Section 203(a)(2)(Y))

Current through Register Vol. 48, No. 28, July 12, 2024
a) IITA Section 203(a)(2)(Y) allows
				individuals a subtraction modification in the computation of base income for
				taxable years beginning on and after January 1, 2002 equal to the amount
				contributed during the taxable year to an Illinois qualified tuition program,
				subject to the limitation described in subsection (b) of this Section. For
				purposes of this Section, "Illinois qualified tuition program" means:
1) A College Savings Pool Account under
				Section 16.5 of the State Treasurer Act [15 ILCS
				505/16.5 ].
2) For taxable years beginning on and after
				January 1, 2005, an Illinois Prepaid Tuition Trust Fund under the Illinois
				Prepaid Tuition Act [110 ILCS 979 ].
Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart F - BASE INCOME OF INDIVIDUALS › Section 100.2565 - Subtraction for Recovery of Itemized Deductions (IITA Section 203(a)(2)(I))

Current through Register Vol. 48, No. 28, July 12, 2024
a) In computing
				base income, an individual is allowed to subtract from his or her federal
				adjusted gross income
an amount equal to all amounts included in that
				total pursuant to the provisions of IRC section 111 as a recovery of items
				previously deducted from adjusted gross income in the computation of taxable
				income.
(IITA Section 203(a)(2)(I))
b) Under IRC section 111, a taxpayer who is
				allowed a deduction in computing federal taxable income in one taxable year,
				and recovers the deductible expenditure in a subsequent taxable year, includes
				the recovery in gross income in the year of recovery. For example, an
				individual who claims an itemized deduction for State income taxes paid in 2015
				on his or her 2015 federal income tax return, and in 2016 receives a refund of
				some of that tax, includes the refund in gross income for 2016. This procedure
				prevents the taxpayer from receiving a tax benefit for an expenditure that
				ultimately did not cost the taxpayer, without requiring the filing of an
				amended return to remove the deduction from the computation of taxable income
				in the year the deduction was taken.
c) Under IITA Section 203(a)(1), the
				computation of an individual's base income begins with his or her federal
				adjusted gross income, which is equal to taxable income before itemized
				deductions, the standard deduction and personal exemptions are taken into
				account. As a result, individuals receive no Illinois income tax benefit from
				federal itemized deductions. Accordingly, recoveries of federal itemized
				deductions do not need to be included in an individual's base income to prevent
				the individual receiving a tax benefit for the item. IITA Section 203(a)(2)(I)
				therefore allows individuals to subtract recoveries of itemized deductions that
				are included in their federal adjusted gross income.
d) IITA Section 203(a)(2)(I) was enacted
				before the September 16, 1994 effective date of PA 88-660, which enacted the
				automatic sunset provisions in IITA Section 250. The automatic sunset
				provisions therefore do not apply to this Section.
Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart F - BASE INCOME OF INDIVIDUALS › Section 100.2590 - Taxation of Certain Employees of Railroads, Motor Carriers, Air Carriers and Water Carriers

Current through Register Vol. 48, No. 28, July 12, 2024
a) Federal
				law affects the authority of the State of Illinois to subject certain employees
				of railroads, motor carriers, merchant mariners, and air carriers to Illinois
				income taxation. By virtue of the provisions of federal laws cited in this
				Section, compensation that would otherwise be subject to Illinois income
				taxation and withholding by virtue of IITA Sections 302(a) and 304(a)(2)(B) is
				subtracted from adjusted gross income in determining Illinois base income (and
				is not subject to Illinois income tax withholding) pursuant to IITA Section
				203(a)(2)(N), which provides a subtraction from adjusted gross income for
an amount equal to all amounts included in adjusted gross income that
				are exempt from taxation by this State by reason of the statutes of the United
				States.
1) Railroad Employees.
				49 USC
				11502(a) states that no part
				of the compensation paid by a rail carrier subject to the jurisdiction of the
				Surface Transportation Board to an employee who performs regularly assigned
				duties as an employee on a railroad in more than one state shall be subject to
				the income tax laws of any state or subdivision of that state, other than the
				state or subdivision thereof of the employee's residence.
2) Motor Carrier Employees.
				49 USC
				14503(a)(1) states that no
				part of the compensation paid by a motor carrier providing transportation
				subject to the jurisdiction of the Surface Transportation Board or by a motor
				private carrier to an employee who performs regularly assigned duties in 2 or
				more states as an employee with respect to a motor vehicle shall be subject to
				the income tax laws of any state or subdivision of that state, other than the
				state or subdivision thereof of the employee's residence.
3) Merchant Mariner Employees.
				46 USC
				11108 states that no part of the compensation
				paid by a merchant mariner to an employee who performs regularly assigned
				duties in more than one state shall be subject to the income tax laws of any
				state or subdivision of that state, other than the state or subdivision of the
				employee's residence.
4) Air
				Carrier Employees.
				49 USC
				40116(f)(2) states that no
				part of the compensation paid by an air carrier to an employee who performs
				regularly assigned duties as an employee on an aircraft in more than one state,
				shall be subject to the income tax laws of any state or its subdivision other
				than the state or subdivision of the employee's residence and the state or
				subdivision in which the employee's scheduled flight time would have been more
				than 50% of the employee's total scheduled flight time for the calendar
				year.
Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart G - BASE INCOME OF CORPORATIONS › Section 100.2655 - Subtraction Modification for Enterprise Zone and River Edge Redevelopment Zone Interest (IITA Section 203(b)(2)(M))

Current through Register Vol. 48, No. 28, July 12, 2024
a) A corporation that is a "financial
				organization" within the meaning of IITA Section 304(c) may subtract an amount
				included in its taxable income as interest income from a loan or loans made by
				such taxpayer to a borrower, to the extent that such a loan is secured by
				property which is eligible for the enterprise zone investment credit (IITA
				Section 203(b)(2)(M)) or the river edge redevelopment zone investment credit
				under IITA Section 201(f). The subtraction for interest from loans secured by
				property eligible for the enterprise zone investment credit is allowed only for
				interest received or accrued prior to August 7, 2012, the effective date of PA
				97-905, which repealed this subtraction.
b) Eligible Property. For purposes of this
				Section, "Eligible Property" shall mean:
1)
				for tax years ending prior to June 8, 1984 (the effective date of PA 83-1114),
				property for which the borrower had successfully claimed the credit under IITA
				Section 201(h) (prior to recodification as IITA Section 201(f) by PA 85-731);
				and
2) for tax years ending on or
				after June 8, 1984, property that is "qualified property" as defined under IITA
				Section 203(f)(2) and Section
				100.2110(e)
				or that would have been qualified property under those provisions if placed in
				service in an enterprise zone at the time it was new by a taxpayer otherwise
				eligible to claim the credit under IITA Section 203(f).
Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart G - BASE INCOME OF CORPORATIONS › Section 100.2665 - Subtraction for Payments to an Attorney-in-Fact (IITA Section 203(b)(2)(R))

Current through Register Vol. 48, No. 28, July 12, 2024
a) Under an
				interinsurance or reciprocal insurance arrangement, the members or subscribers
				are liable to reimburse each other for insured losses. The operations of an
				interinsurer or reciprocal insurer are conducted by an attorney-in-fact.
				Interinsurers and reciprocal insurers are subject to federal income tax as
				mutual insurance companies. (See Internal Revenue Code section 832(f).) Under
				IRC section 835, an interinsurer or reciprocal insurer can elect to limit its
				deduction for fees paid to its attorney-in-fact to the amount of deductible
				expenses incurred by the attorney-in-fact that are attributable to those fees.
				An interinsurer or reciprocal insurer that makes this election is allowed a
				credit equal to the federal income tax liability of its attorney-in-fact with
				respect to the fees received from the interinsurer or reciprocal
				insurer.
b) The effect of making an
				election under IRC section 835 is that the net income of the attorney-in-fact
				related to the interinsurer or reciprocal insurer that made the election is
				included in the federal taxable income of both the attorney-in-fact and the
				interinsurer or reciprocal insurer, but the interinsurer or reciprocal insurer
				is allowed a federal credit that eliminates the double taxation of that income.
				Prior to the enactment of PA 91-205, that income would be included in the base
				incomes of the interinsurer or reciprocal insurer and of the attorney-in-fact.
				On and after July 20, 1999 (the effective date of PA 91-205), in the case of an
				attorney-in-fact with respect to whom an interinsurer or a reciprocal insurer
				has made the election under IRC section 835, the attorney-in-fact is allowed to
				subtract
an amount equal to the excess, if any, of the amounts paid or
				incurred by that interinsurer or reciprocal insurer in the taxable year to the
				attorney-in-fact over the deduction allowed to that interinsurer or reciprocal
				insurer with respect to the attorney-in-fact under IRC section 835 for the
				taxable year.
(IITA Section 203(b)(2)(R)) The provisions of IITA
				Section 203(b)(2)(R) are exempt from automatic sunset under the provisions of
				Section 250.
Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart G - BASE INCOME OF CORPORATIONS › Section 100.2668 - Subtraction for Dividends from Controlled Foreign Corporations (IITA Section 203(b)(2)(Z))

Current through Register Vol. 48, No. 28, July 12, 2024
a)
				Under Internal Revenue Code section 965(e), the taxable income of a shareholder
				of a controlled foreign corporation (CFC) may not be less than the
				"nondeductible CFC dividends" received from that CFC, as defined in IRC section
				965(e)(3). If the shareholder's federal net income would otherwise be less than
				the nondeductible CFC dividends, the shareholder carries over the excess of its
				nondeductible CFC dividends over the amount of its federal taxable income
				computed without regard to IRC section 965(e) as a net operating loss under IRC
				section 172.
b) IITA Prior to PA
				97-507. Under IITA Section 203(b), the base income of a corporation for a
				taxable year is its taxable income for the year, as properly reportable for
				federal income tax purposes, after modifications in IITA Section 203(b)(2).
				Under IITA Section 203(b)(2)(D), any net operating loss deduction claimed by a
				corporation under IRC section 172 for a loss incurred in a taxable year ending
				on or after December 31, 1986, is added back to the corporation's taxable
				income. Under IITA Section 207, the net loss of a taxpayer (other than an
				individual) for a taxable year is its taxable income for the year, as properly
				reportable for federal income tax purposes, after modifications in IITA Section
				203(b)(2). As a result, a corporation whose nondeductible CFC dividends
				exceeded its federal taxable income computed without regard to IRC section
				965(e) for a taxable year would receive no tax benefit from the deductions or
				losses that caused the excess, because those deductions or losses could not
				reduce its federal taxable income in the year incurred and any resulting IRC
				section 172 deduction would be added back to taxable income in the carryover
				years under IITA Section 203(b)(2)(D).
c) In order to allow a corporation the
				benefit of deductions otherwise disallowed by IRC section 965(e) and IITA
				Section 203(b)(2)(D), PA 97-507 added IITA Section 203(b)(2)(Z) to allow a
				subtraction for
the difference between the nondeductible controlled
				foreign corporation dividends under IRC section 965(e)(3) over the taxable
				income of the taxpayer, computed without regard to IRC section 965(e)(2)(A),
				and without regard to any net operating loss deduction.
IITA Section
				203(b)(2)(Z) applies to all taxable years, and is exempt from automatic sunset
				under the provisions of Section 250
.
Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart H - BASE INCOME OF TRUSTS AND ESTATES › Section 100.2770 - Subtraction for Recovery of Itemized Deductions of a Decedent (IITA Section 203(c)(2)(W))

Current through Register Vol. 48, No. 28, July 12, 2024
a) In
				computing its base income, an estate is allowed to subtract from its federal
				taxable income
an amount equal to all amounts included in that total
				pursuant to the provisions of IRC section 111 as a recovery of items previously
				deducted by the decedent from adjusted gross income in the computation of
				taxable income.
(IITA Section 203(c)(2)(W))
b) Under IRC section 111, a taxpayer who is
				allowed a deduction in computing federal taxable income in one taxable year,
				and recovers the deductible expenditure in a subsequent taxable year, includes
				the recovery in gross income in the year of recovery. For example, an
				individual who claims an itemized deduction for State income taxes paid in 2015
				on his or her 2015 federal income tax return, and in 2016 receives a refund of
				some of that tax, includes the refund in gross income for 2016. This procedure
				prevents the taxpayer from receiving a tax benefit for an expenditure that
				ultimately did not cost the taxpayer, without requiring the filing of an
				amended return to remove the deduction from the computation of taxable income
				in the year the deduction was taken.
c) If the estate of a deceased individual
				recovers an item that the individual had deducted in a taxable year prior to
				his or her death, the estate must include the recovery in its taxable
				income.
d) Under IITA Section
				203(a)(1), the computation of an individual's base income begins with his or
				her federal adjusted gross income, which is equal to taxable income before
				itemized deductions, the standard deduction and personal exemptions are taken
				into account. As a result, individuals receive no Illinois income tax benefit
				from federal itemized deductions. Accordingly, recoveries of federal itemized
				deductions taken by a decedent do not need to be included in the base income of
				the decedent's estate to prevent receiving a tax benefit for the item. IITA
				Section 203(c)(2)(W) therefore allows an estate to subtract recoveries of
				itemized deductions taken by the decedent that are included in the estate's
				federal taxable income.
e) IITA
				Section 203(c)(2)(W) provides that it is exempt from the automatic sunset
				provisions of IITA Section 250.