Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart Q - COMBINED RETURNS › Section 100.5265 - Common Taxable Year

Current through Register Vol. 48, No. 28, July 12, 2024
a) The
				common taxable year of a combined group shall be the taxable year of the
				designated agent. However, if a combined group has been using the taxable year
				of the member of the combined group that, as of the time the combined group
				becomes eligible to file a combined return, would be expected to have the
				greatest Illinois income tax liability on a recurring basis if it were not a
				member of a unitary business group, it may continue to do so for taxable years
				ending prior to January 1, 1999. The combined group must thereafter use the
				taxable year of the designated agent.
b) For taxable years ending on or after
				December 31, 1987, members of a combined group may have different taxable
				years. In the case of a member having a taxable year different from the common
				taxable year determined in subsection (a) above, the separate company taxable
				income of that member used in computing the combined net income of the combined
				group shall be determined using one of the following methods:
1) Method 1. The member may compute its
				pro-forma taxable income from its books and records for the common taxable
				year.
2) Method 2. The member may
				use pro-rated shares of its taxable income for its taxable years ending in and
				beginning in a common taxable year. This method may be used only if the
				combined return for a common taxable year may be timely filed (including
				automatic extensions) after the close of such member's taxable year which
				begins in the common taxable year for which the return is filed, and such
				combined return may not be filed until after the close of such member's taxable
				year. To illustrate:
Example 1: Corporation A is a calendar-year member of a
				  combined group having a common taxable year ending July 31. If Corporation A
				  uses the method described in this subsection (b)(2), its taxable income for the
				  taxable year ending July 31, 1995 would be five-twelfths of its 1994 taxable
				  income and seven-twelfths of its 1995 taxable income. Rather than using months
				  to pro-rate its income, Corporation A may use the number of days in its taxable
				  year or (in the case of a corporation using a 52/53 week taxable year) the
				  number of weeks in the taxable year. The combined return for the common taxable
				  year ending July 31, 1995, may not be filed until after December 31, 1995, the
				  close of Corporation A's taxable year which begins during that common taxable
				  year.
Example 2. Corporation B uses a taxable year ending October
				  31, and is a member of a combined group with a calendar common taxable year.
				  Corporation B may not use the method described in this subsection (b)(2),
				  because, in applying this method for calendar year 1995, Corporation B would
				  have to include in its common taxable year income two-twelfths of its income
				  for its taxable year ending October 31, 1996, and the group's 1995 return
				  (including automatic extensions) would be due on October 15, 1996, before the
				  close of Corporation B's taxable year.
3) Method 3. The separate company taxable
				income of such member for any taxable year ending in the common taxable year
				shall be included in combined net income of the combined group.