The Illinois corporation income tax return is prepared for calendar, fiscal, and short-year corporations. Using entries from the federal tax return and on Illinois Worksheets, the following forms and schedules are prepared for the Illinois return:
Form IL-505-B, Automatic Extension Payment
Form IL-1120-ES, Illinois Estimated Income and Replacement Tax Payment for Corporations
Form IL-1120-X-V, Amended Payment Voucher for Corporation
Form IL-1120-V, Payment Voucher for Corporation Income and Replacement Tax
Form IL-1120-X, Illinois Amended Corporation Income and Replacement Tax Return
Form IL-1120, Illinois Corporation Income and Replacement Tax Return
Schedule SA, Specific Accounting Method of Accounting
Schedule 1299-D, Income Tax Credits
Schedule 4255, Recapture of Investment Tax Credits
Schedule NLD, Net Loss Deduction (regular returns)
Schedule INS, Tax for Foreign Insures
Schedule 1299-B, Enterprise Zone or Foreign Trade Zone Subtractions
Schedule J, Foreign Dividends
Form IL-4562, Special Depreciation
Schedule 80/20, Related Party Expenses
Schedule M, Other Additions and Subtractions
Schedule NB, Nonbusiness Income
Form IL-477, Replacement Tax Investment Credits
Form IL-2220, Computation of Penalties by Businesses
Form IL-2848, Power of Attorney
Schedule K-1-P Received from Passthrough, Electronic Filing
Schedule K-1-T Received from Passthrough, Electronic Filing
ELFINFO, Additional Electronic Filing Information
Schedule UB, Combined Apportionment for Unitary Business Group (combined returns)
Schedule UB/NLD, Unitary Illinois Net Loss Deduction (combined returns)
Schedule UB/INS, Tax for a Unitary Business Group with Foreign Insurer Members (combined returns)
Subgroup Schedule (combined returns)
We include the required federal attachments with the government copy of the Illinois return.
Message from the IL DOR:
State Refund Expectations
The Illinois Department of Revenue (IDOR) is required to review returns and ensure the amounts requested as refunds are issued accurately and to the legitimate recipient. Once a return is received by IDOR, many different factors can affect the timing of a refund.
Please check your refund status at this website: https://www2.illinois.gov/rev/individuals/Pages/refunds.aspx
Illinois Combined Unitary Return Processing Information
In the corporate tax program, the Illinois Unitary Business Group return can be prepared using one of the two methods described below.
In the S Corporation program, Illinois Unitary Business Group returns are prepared using Method 1.
Method 1
This method is selected when using the Unitary Business Group Return Automated Feature. This feature uses Illinois Unitary Return Auto Automated worksheet to select the unitary business group members that are to be included in the unitary return. The unitary business group members can be corporations or S Corporations. You must process each separate company return before processing the combined unitary business group return. If a company is to be included in the combined group you MUST enter an "X" in the Illinois General Worksheet > Basic Data Section > Member included in IL Unitary Business Group field.
The recommended input to complete "Method 1" is the same as method 2 except: The unitary combined returns state tax payments entered on the federal State Tax Payments and/or the City Tax Payments worksheet will not be accumulated from the separate companies and must be reentered with the combined unit.
You may make for the Illinois combined Eliminations and Adjustments on the Schedule UB, Part II, by using Illinois Unitary/Combined Worksheet > Unitary Eliminations and Adjustments Section.
Method 2
Illinois combined corporation tax returns are processed with minimum entries. You must process the Illinois return for the parent company and all subsidiaries (individual companies) before processing the consolidating return. Process each individual company as though it is not a part of the Illinois combined return. On General category > Basic Data worksheet > Consolidated Return Information section of each individual company, enter an "X" in the "X if Return May be Included in a Consolidated Return" box. You must enter an "X" in this box if the return is part of a group that might be combined. While this election does not lock the return into being included in an Illinois combined return, it is a mandatory entry to save the information necessary to complete the combined return. An entry in the box entitled "Code for Consolidated Return" has no effect in including a separate company in the Illinois combined return. This box is for printing purposes only.
Once you have processed the Illinois return for the individual companies, you can process the consolidating return. You must submit the consolidated category data with the consolidating return to identify the individual companies to include in the consolidation. For additional information of which federal forms to submit with the returns, see the instruction guide for the consolidated corporation return.
The membership of the Illinois unitary group can be different than that of the federal consolidated group. If any of the companies listed on the federal Consolidated Tab, Membership Information worksheet are not to be included in the Illinois unitary combined return, enter "IL" on the federal State/City Common Data worksheet > General Information section > State/City code field and "Yes" on the Consolidated/Combined Return Information section > Member of federal consolidated but not for state field.
Type of Information to be Shown and Recommended Input
Worksheet Illinois > Unitary/Combined Returns (if applicable) should be used with the consolidating company. The information below explains which information on the Illinois combined return should be submitted with the separate company input and which information should be submitted with the consolidating company input.
Estimated Tax Payments: State tax payments entered on federal Payments > State Quarterly Payments will be accumulated for all states and cities. To suppress this accumulation you may make an entry on the field entitled "Options to suppress separate company tax payments" on federal Worksheet Consolidated > Membership Information. If you elect to suppress, you may enter your state tax payments at the consolidated level.
Disclosure information at the top of IL-1120: Enter the information on federal Worksheet Common State > State/City Common Data submitted with the consolidating unit.
Late payment interest and all penalties: Enter the information on federal submitted with the consolidating unit.
Form IL-1120, Step 2 additions to base income and Schedule UB, Part III: Some additions are automatic from information submitted with the federal units. The tax addback can be overridden by entering the information on Worksheet Illinois > Income/Deductions > Schedule M Additions and Subtractions submitted with the separate companies. Schedule M other additions may be entered on Worksheet Illinois > Income/Deductions submitted with the separate companies. In addition, you may use Worksheet Illinois > Unitary/Combined Returns, submitted with the consolidating unit, to eliminate or adjust these amounts.
Form IL-1120, Step 3 and Schedule UB, Part III subtractions from base income: Interest from U.S. Treasury obligations is automatic from the federal return. It can be overridden by entering the information on Worksheet Illinois > Income/Deductions> Subtractions submitted with the separate companies. Step 3 may be completed from entries on Worksheet Illinois > Income/Deductions submitted with the separate companies. Other subtractions may be completed from entries on Worksheet Illinois > Income/Deductions > Subtractions submitted with the separate companies. In addition, you may submit Worksheet Illinois > Unitary/Combined Returns with the consolidating unit to eliminate or adjust the above items. Special Depreciation on Form IL-4562 is accumulated from the operating companies and carried to the consolidating unit. If entries are made on Worksheet Illinois > Income/Deductions > Other Overrides, then those entries override the Form IL-4562 produced with the consolidating return.
Form IL-1120, Step 8: Enter the estimated tax payments made on federal Payments > State Quarterly Payments submitted with the consolidating unit.
Form IL-1120, Step 4, Schedule NB, Schedule UB, Part III, Lines 8 and 9, and Schedule UB, Part IV information when a portion of base income or loss is derived outside Illinois, is completed from federal apportionment input submitted with the separate companies. To eliminate or adjust the amounts for nonbusiness income, submit Worksheet Illinois > Unitary/Combined Returns with the consolidating company. Intercompany eliminations for apportionment information must be adjusted on the separate company apportionment entries.
Form IL-1120, Steps 6 and 7, Recapture of Investment Credits can be completed from information entered on of the consolidating unit.
Form IL-1120, Step 5, Illinois Net Loss Deduction, can be completed from information entered on federal submitted with the separate companies. We also use this information to complete Schedule UB/NLD. If the loss relates to a time before the member joined the unitary group, and such loss is eligible for application against income of all members of this year's combined group, check State Use Check mark 2 on federal Worksheet Income/Deductions > NOL Carryover/Carryback > Detail > State Carryover Companion Information.
Form IL-1120, Step 6, Investment Credits, and Form IL-477 can be completed from Worksheet Illinois > Credits > Replacement Tax Investment Credit submitted with the consolidating company only. Do not submit Worksheet Illinois > Credits > Replacement Tax Investment Credit with the separate company input. To override the credit on Form IL-1120, Part IV, use Interview Form IL1, Box 52 with the consolidating unit.
Income Tax Credits on Schedule 1299-D can be completed from Worksheet Illinois > Credits > Income Tax Credits submitted with the consolidating company only. Do not submit Worksheet Illinois > Credits > Income Tax Credits with the separate company input. To override Schedule 1299-D credits on Form IL-1120, use Worksheet Illinois > Credits > Income Tax Credits > Income tax credits from Schedule 1299-Dwith the consolidating unit. See the Illinois combined return help for additional information.
Illinois Frequently Asked Questions
Q. How are Illinois returns impacted by the depreciation provision of the new federal Tax Cuts and Jobs Act of 2018?
A. No adjustment or other modification is generated on Form IL-4562 for assets with 100% bonus depreciation. All other bonus differences carry to IL-4562.
Q. How do I enter information for Schedule NLD?
A. Use Income/Deductions category > NOL Carryover worksheet > State Carryover for NOL section to enter information for Schedule NLD. Unless dates of origination of the loss, years and amounts of loss application match federal amounts and dates, you will need to enter "S" in the FS code box and "IL" in the state box before entering detail for Schedule NLD. The federal NOL deduction entries are used if the FS and state boxes are blank. Information for originating company other than this entity and combined return information is entered on Income/Deductions category > NOL Carryover worksheet > State Carryover for NOL section.
Q. Why will my Schedule NLD not highlight when I have a loss?
A. According to the form instructions, this form is not to be used when there is a loss in the current year.
Q. Why does my Schedule NLD not show all of my losses?
A. The Illinois Department of Revenue only wants losses being used against current year income to show on this form. Marking Worksheet Illinois > General > Options > Show all Illinois net loss carryforward amounts on Schedule NLD will change this default.
Q. How can I enter property and payroll apportionment information?
A. Property and payroll apportionment factors have been eliminated. Apportionment is based either on sales or special apportionment formula. To use special apportionment use Income/Deductions category > Allocation and Apportionment worksheet > Special Apportionment section.
Q. Why do payment vouchers and estimated tax vouchers show ".00" (pennies)?
A. The Illinois Department of Revenue requests pennies or zeros ".00" be included on the amount boxes on scannable vouchers.
Q. How do I request an Illinois Amended Corporation Income and Replacement Tax Return, Form IL-1120-X?
A. The Illinois amended return (Form IL-1120-X) can be processed using Other category > Amended Returns worksheet.
Q. How do I generate an Illinois extension, Form IL-505-B?
A. State extensions are requested on Other category > Extensions worksheet > State Extensions section. The state code must be entered, and any applicable overrides for tentative tax, overpayment credited from prior year, or estimated payments for the tax year.
Illinois Combined Frequently Asked Questions
Q. Why are some members which were included in the federal consolidated return missing from the Illinois combined return?
A. In order for the member to be included in the Illinois combined return, the member (parent or subsidiary) must have an Illinois return created. There are three methods that can be used to create an Illinois return. The Illinois return can be created by using Federal Common State category, State/City Generation worksheet. The return can also be created by the presence of data on any Illinois worksheet section. The return can be created by entering "IL" in the "State Code" box on Federal General category, Basic Data Section.
Q. When the depreciation totals section have entries at the separate company level, including bonus depreciation, can Form IL-4562 be prepared without additional entries at the combined return level?
A. You must use Income/Deductions category > Special Depreciation worksheet to have Form IL-4562 be prepared. We do not accumulate the adjustments from separate company Forms IL-4562. The adjustment for depreciation on Schedule UB, Part III, lines 2c and 5f as well as the adjustment on Form IL-1120 of the combined company are prepared without any additional entries at the combined level, based on adjustments determined at the separate company level.
Q. Where do I enter the apportionment information for Schedule UB, Part IV?
A. The apportionment information must be entered with the separate companies. For sales factor apportionment, use Common State category > Apportionment and Allocation worksheet > Sales Factor section. For a special apportionment method, use Income/Deductions category > Allocation and Apportionment worksheet > Special Apportionment section. If the apportionment information is not entered, we will default to the federal return to compute the sales factor on the separate company return. Companies with different typesof apportionment must use the Subgroup Schedule. Sales everywhere must be entered for returns other than sales companies.
Q. How do I process a return with different members for the Illinois unitary business group than the federal consolidated group?
A. If the membership of the federal consolidated group and the Illinois combined group are different, you must process the two returns separately. After processing the federal consolidated return, add or delete members on Consolidated category > Membership Information worksheet to reflect the proper membership in the Illinois combined group.
Q. Why does the Tax Payments Worksheet not print with the combined return?
A. The Department of Revenue has requested for a number of years that payments be made by only one company.
Q. How do I indicate that I do not want my separate entity to be a part of the Federal consolidated Group?
A. At the separate entity level, with an 'IL' on Federal Worksheet > Common State > State/City Common Data > General Information State/City code 'IL' and Consolidated/Combined Return Information > Member of consolidated but not for state 'Yes'.
Q. On Schedule UB/NLD, why are some losses originating in later years claimed before those originating in earlier years?
A. The instructions to Schedule UB/NLD direct that losses be claimed in the order of expiration (earliest-expiring first). Losses incurred by members for periods on or after December, 2003 are subject to a 12 year carryforward period and may expire before earlier losses which were subject to a 20 year carryforward (origination period on or after August, 1997) or a 15 year carryforward (origination period before August, 1997).
Q. How can an S Corporation member be included on Schedule UB?