Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart P - COMPOSITE RETURNS › Section 100.5130 - Composite Returns: Required forms and computation of Income (IITA Section 502(f))

Current through Register Vol. 48, No. 28, July 12, 2024
a)
				Composite Returns of Partners and Shareholders
1) Required form and information. Composite
				returns of shareholders and partners shall be filed using forms prescribed by
				the Department. The following information shall be attached to the composite
				returns: the name, address, social security number and amount of income
				apportionable and allocable to Illinois for each individual included in the
				composite return; and the computation of the proper amount of composite income
				reportable to Illinois.
2)
				Composite income. The amount of composite income apportionable and allocable to
				Illinois shall be the sum of the income earned or received for the taxable year
				from the authorized agent by the persons included in the composite return.
A) The composite income of a partnership
				shall be computed by first computing the partnership's base income, and then
				including in composite income the entire partnership share of the base income
				of each resident partner joining in the composite return and the partnership
				share of the portion of the base income allocable to Illinois per Form IL-1065
				of each nonresident partner joining in the composite return. However, the base
				income of the partnership for this purpose shall be computed without regard to:
i) the addition modification under IITA
				Section 203(d)(2)(C) for guaranteed payments to partners other than those
				partners included in the composite return;
ii) the subtraction modification under IITA
				Section 203(d)(2)(H) for personal service income or for a reasonable allowance
				for compensation paid or accrued to partners; or
iii) the subtraction (or addition)
				modification under IITA Section 203(d)(2)(I) for the share of income (or loss)
				distributable to a partner subject to Personal Property Tax Replacement Income
				Tax.
B) The authorized
				agent shall pay income tax on the composite income that is attributable to the
				partners included in the composite return and Personal Property Tax Replacement
				Income Tax on the portion of the composite income which is attributable to
				trusts included in the composite return.
C) The composite income of a Subchapter S
				corporation shall be computed by first computing the Subchapter S corporation's
				base income, and then including in composite income the entire share of the
				base income distributable to each resident shareholder joining in the composite
				return and the share of the portion of the base income allocable to Illinois
				per Form IL-1120-ST distributable to each nonresident shareholder. (Line 1 of
				Part II of the Subchapter S corporation's IL-1120-ST) However, the base income
				of the Subchapter S corporation for this purpose shall be computed without
				regard to:
i) the subtraction modification
				under IITA Section 203(b)(2)(G) for amounts included in federal taxable income
				under IRC section 78;
ii) the
				subtraction modification under IITA Section 203(b)(2)(M) for interest income
				from loans secured by property eligible for the Enterprise Zone Investment
				Credit;
iii) the subtraction
				modification under IITA Section 203(b)(2)(M-1) for interest income from loans
				secured by property eligible for the High Impact Business Investment
				Credit;
iv) the subtraction
				modification under IITA Section 203(b)(2)(N) for contributions to eligible
				Enterprise Zone projects;
v) the
				subtraction modification under IITA Section 203(b)(2)(O) for dividends received
				from foreign corporations;
vi) the
				subtraction modification under IITA Section 203(b)(2)(P) for contributions to
				job training projects; or
vii) the
				subtraction modification under IITA Section 203(b)(2)(S) for the share of
				income (or loss) distributable to a shareholder subject to Personal Property
				Tax Replacement Income Tax.
D) The authorized agent will pay income tax
				on the amount of the composite income distributable to shareholders included in
				the composite return and pay Personal Property Tax Replacement Income Tax on
				the amount distributable to trusts included in the composite return.