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1 | | this Act to the extent deducted from gross income in |
2 | | the computation of adjusted gross income for the |
3 | | taxable year; |
4 | | (C) An amount equal to the amount received during |
5 | | the taxable year as a recovery or refund of real |
6 | | property taxes paid with respect to the taxpayer's |
7 | | principal residence under the Revenue Act of 1939 and |
8 | | for which a deduction was previously taken under |
9 | | subparagraph (L) of this paragraph (2) prior to July |
10 | | 1, 1991, the retrospective application date of Article |
11 | | 4 of Public Act 87-17. In the case of multi-unit or |
12 | | multi-use structures and farm dwellings, the taxes on |
13 | | the taxpayer's principal residence shall be that |
14 | | portion of the total taxes for the entire property |
15 | | which is attributable to such principal residence; |
16 | | (D) An amount equal to the amount of the capital |
17 | | gain deduction allowable under the Internal Revenue |
18 | | Code, to the extent deducted from gross income in the |
19 | | computation of adjusted gross income; |
20 | | (D-5) An amount, to the extent not included in |
21 | | adjusted gross income, equal to the amount of money |
22 | | withdrawn by the taxpayer in the taxable year from a |
23 | | medical care savings account and the interest earned |
24 | | on the account in the taxable year of a withdrawal |
25 | | pursuant to subsection (b) of Section 20 of the |
26 | | Medical Care Savings Account Act or subsection (b) of |
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1 | | Section 20 of the Medical Care Savings Account Act of |
2 | | 2000; |
3 | | (D-10) For taxable years ending after December 31, |
4 | | 1997, an amount equal to any eligible remediation |
5 | | costs that the individual deducted in computing |
6 | | adjusted gross income and for which the individual |
7 | | claims a credit under subsection (l) of Section 201; |
8 | | (D-15) For taxable years 2001 and thereafter, an |
9 | | amount equal to the bonus depreciation deduction taken |
10 | | on the taxpayer's federal income tax return for the |
11 | | taxable year under subsection (k) of Section 168 of |
12 | | the Internal Revenue Code; |
13 | | (D-16) If the taxpayer sells, transfers, abandons, |
14 | | or otherwise disposes of property for which the |
15 | | taxpayer was required in any taxable year to make an |
16 | | addition modification under subparagraph (D-15), then |
17 | | an amount equal to the aggregate amount of the |
18 | | deductions taken in all taxable years under |
19 | | subparagraph (Z) with respect to that property. |
20 | | If the taxpayer continues to own property through |
21 | | the last day of the last tax year for which a |
22 | | subtraction is allowed with respect to that property |
23 | | under subparagraph (Z) and for which the taxpayer was |
24 | | allowed in any taxable year to make a subtraction |
25 | | modification under subparagraph (Z), then an amount |
26 | | equal to that subtraction modification. |
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1 | | The taxpayer is required to make the addition |
2 | | modification under this subparagraph only once with |
3 | | respect to any one piece of property; |
4 | | (D-17) An amount equal to the amount otherwise |
5 | | allowed as a deduction in computing base income for |
6 | | interest paid, accrued, or incurred, directly or |
7 | | indirectly, (i) for taxable years ending on or after |
8 | | December 31, 2004, to a foreign person who would be a |
9 | | member of the same unitary business group but for the |
10 | | fact that foreign person's business activity outside |
11 | | the United States is 80% or more of the foreign |
12 | | person's total business activity and (ii) for taxable |
13 | | years ending on or after December 31, 2008, to a person |
14 | | who would be a member of the same unitary business |
15 | | group but for the fact that the person is prohibited |
16 | | under Section 1501(a)(27) from being included in the |
17 | | unitary business group because he or she is ordinarily |
18 | | required to apportion business income under different |
19 | | subsections of Section 304. The addition modification |
20 | | required by this subparagraph shall be reduced to the |
21 | | extent that dividends were included in base income of |
22 | | the unitary group for the same taxable year and |
23 | | received by the taxpayer or by a member of the |
24 | | taxpayer's unitary business group (including amounts |
25 | | included in gross income under Sections 951 through |
26 | | 964 of the Internal Revenue Code and amounts included |
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1 | | in gross income under Section 78 of the Internal |
2 | | Revenue Code) with respect to the stock of the same |
3 | | person to whom the interest was paid, accrued, or |
4 | | incurred. |
5 | | This paragraph shall not apply to the following: |
6 | | (i) an item of interest paid, accrued, or |
7 | | incurred, directly or indirectly, to a person who |
8 | | is subject in a foreign country or state, other |
9 | | than a state which requires mandatory unitary |
10 | | reporting, to a tax on or measured by net income |
11 | | with respect to such interest; or |
12 | | (ii) an item of interest paid, accrued, or |
13 | | incurred, directly or indirectly, to a person if |
14 | | the taxpayer can establish, based on a |
15 | | preponderance of the evidence, both of the |
16 | | following: |
17 | | (a) the person, during the same taxable |
18 | | year, paid, accrued, or incurred, the interest |
19 | | to a person that is not a related member, and |
20 | | (b) the transaction giving rise to the |
21 | | interest expense between the taxpayer and the |
22 | | person did not have as a principal purpose the |
23 | | avoidance of Illinois income tax, and is paid |
24 | | pursuant to a contract or agreement that |
25 | | reflects an arm's-length interest rate and |
26 | | terms; or |
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1 | | (iii) the taxpayer can establish, based on |
2 | | clear and convincing evidence, that the interest |
3 | | paid, accrued, or incurred relates to a contract |
4 | | or agreement entered into at arm's-length rates |
5 | | and terms and the principal purpose for the |
6 | | payment is not federal or Illinois tax avoidance; |
7 | | or |
8 | | (iv) an item of interest paid, accrued, or |
9 | | incurred, directly or indirectly, to a person if |
10 | | the taxpayer establishes by clear and convincing |
11 | | evidence that the adjustments are unreasonable; or |
12 | | if the taxpayer and the Director agree in writing |
13 | | to the application or use of an alternative method |
14 | | of apportionment under Section 304(f). |
15 | | Nothing in this subsection shall preclude the |
16 | | Director from making any other adjustment |
17 | | otherwise allowed under Section 404 of this Act |
18 | | for any tax year beginning after the effective |
19 | | date of this amendment provided such adjustment is |
20 | | made pursuant to regulation adopted by the |
21 | | Department and such regulations provide methods |
22 | | and standards by which the Department will utilize |
23 | | its authority under Section 404 of this Act; |
24 | | (D-18) An amount equal to the amount of intangible |
25 | | expenses and costs otherwise allowed as a deduction in |
26 | | computing base income, and that were paid, accrued, or |
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1 | | incurred, directly or indirectly, (i) for taxable |
2 | | years ending on or after December 31, 2004, to a |
3 | | foreign person who would be a member of the same |
4 | | unitary business group but for the fact that the |
5 | | foreign person's business activity outside the United |
6 | | States is 80% or more of that person's total business |
7 | | activity and (ii) for taxable years ending on or after |
8 | | December 31, 2008, to a person who would be a member of |
9 | | the same unitary business group but for the fact that |
10 | | the person is prohibited under Section 1501(a)(27) |
11 | | from being included in the unitary business group |
12 | | because he or she is ordinarily required to apportion |
13 | | business income under different subsections of Section |
14 | | 304. The addition modification required by this |
15 | | subparagraph shall be reduced to the extent that |
16 | | dividends were included in base income of the unitary |
17 | | group for the same taxable year and received by the |
18 | | taxpayer or by a member of the taxpayer's unitary |
19 | | business group (including amounts included in gross |
20 | | income under Sections 951 through 964 of the Internal |
21 | | Revenue Code and amounts included in gross income |
22 | | under Section 78 of the Internal Revenue Code) with |
23 | | respect to the stock of the same person to whom the |
24 | | intangible expenses and costs were directly or |
25 | | indirectly paid, incurred, or accrued. The preceding |
26 | | sentence does not apply to the extent that the same |
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1 | | dividends caused a reduction to the addition |
2 | | modification required under Section 203(a)(2)(D-17) of |
3 | | this Act. As used in this subparagraph, the term |
4 | | "intangible expenses and costs" includes (1) expenses, |
5 | | losses, and costs for, or related to, the direct or |
6 | | indirect acquisition, use, maintenance or management, |
7 | | ownership, sale, exchange, or any other disposition of |
8 | | intangible property; (2) losses incurred, directly or |
9 | | indirectly, from factoring transactions or discounting |
10 | | transactions; (3) royalty, patent, technical, and |
11 | | copyright fees; (4) licensing fees; and (5) other |
12 | | similar expenses and costs. For purposes of this |
13 | | subparagraph, "intangible property" includes patents, |
14 | | patent applications, trade names, trademarks, service |
15 | | marks, copyrights, mask works, trade secrets, and |
16 | | similar types of intangible assets. |
17 | | This paragraph shall not apply to the following: |
18 | | (i) any item of intangible expenses or costs |
19 | | paid, accrued, or incurred, directly or |
20 | | indirectly, from a transaction with a person who |
21 | | is subject in a foreign country or state, other |
22 | | than a state which requires mandatory unitary |
23 | | reporting, to a tax on or measured by net income |
24 | | with respect to such item; or |
25 | | (ii) any item of intangible expense or cost |
26 | | paid, accrued, or incurred, directly or |
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1 | | indirectly, if the taxpayer can establish, based |
2 | | on a preponderance of the evidence, both of the |
3 | | following: |
4 | | (a) the person during the same taxable |
5 | | year paid, accrued, or incurred, the |
6 | | intangible expense or cost to a person that is |
7 | | not a related member, and |
8 | | (b) the transaction giving rise to the |
9 | | intangible expense or cost between the |
10 | | taxpayer and the person did not have as a |
11 | | principal purpose the avoidance of Illinois |
12 | | income tax, and is paid pursuant to a contract |
13 | | or agreement that reflects arm's-length terms; |
14 | | or |
15 | | (iii) any item of intangible expense or cost |
16 | | paid, accrued, or incurred, directly or |
17 | | indirectly, from a transaction with a person if |
18 | | the taxpayer establishes by clear and convincing |
19 | | evidence, that the adjustments are unreasonable; |
20 | | or if the taxpayer and the Director agree in |
21 | | writing to the application or use of an |
22 | | alternative method of apportionment under Section |
23 | | 304(f); |
24 | | Nothing in this subsection shall preclude the |
25 | | Director from making any other adjustment |
26 | | otherwise allowed under Section 404 of this Act |
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1 | | for any tax year beginning after the effective |
2 | | date of this amendment provided such adjustment is |
3 | | made pursuant to regulation adopted by the |
4 | | Department and such regulations provide methods |
5 | | and standards by which the Department will utilize |
6 | | its authority under Section 404 of this Act; |
7 | | (D-19) For taxable years ending on or after |
8 | | December 31, 2008, an amount equal to the amount of |
9 | | insurance premium expenses and costs otherwise allowed |
10 | | as a deduction in computing base income, and that were |
11 | | paid, accrued, or incurred, directly or indirectly, to |
12 | | a person who would be a member of the same unitary |
13 | | business group but for the fact that the person is |
14 | | prohibited under Section 1501(a)(27) from being |
15 | | included in the unitary business group because he or |
16 | | she is ordinarily required to apportion business |
17 | | income under different subsections of Section 304. The |
18 | | addition modification required by this subparagraph |
19 | | shall be reduced to the extent that dividends were |
20 | | included in base income of the unitary group for the |
21 | | same taxable year and received by the taxpayer or by a |
22 | | member of the taxpayer's unitary business group |
23 | | (including amounts included in gross income under |
24 | | Sections 951 through 964 of the Internal Revenue Code |
25 | | and amounts included in gross income under Section 78 |
26 | | of the Internal Revenue Code) with respect to the |
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1 | | stock of the same person to whom the premiums and costs |
2 | | were directly or indirectly paid, incurred, or |
3 | | accrued. The preceding sentence does not apply to the |
4 | | extent that the same dividends caused a reduction to |
5 | | the addition modification required under Section |
6 | | 203(a)(2)(D-17) or Section 203(a)(2)(D-18) of this |
7 | | Act; |
8 | | (D-20) For taxable years beginning on or after |
9 | | January 1, 2002 and ending on or before December 31, |
10 | | 2006, in the case of a distribution from a qualified |
11 | | tuition program under Section 529 of the Internal |
12 | | Revenue Code, other than (i) a distribution from a |
13 | | College Savings Pool created under Section 16.5 of the |
14 | | State Treasurer Act or (ii) a distribution from the |
15 | | Illinois Prepaid Tuition Trust Fund, an amount equal |
16 | | to the amount excluded from gross income under Section |
17 | | 529(c)(3)(B). For taxable years beginning on or after |
18 | | January 1, 2007, in the case of a distribution from a |
19 | | qualified tuition program under Section 529 of the |
20 | | Internal Revenue Code, other than (i) a distribution |
21 | | from a College Savings Pool created under Section 16.5 |
22 | | of the State Treasurer Act, (ii) a distribution from |
23 | | the Illinois Prepaid Tuition Trust Fund, or (iii) a |
24 | | distribution from a qualified tuition program under |
25 | | Section 529 of the Internal Revenue Code that (I) |
26 | | adopts and determines that its offering materials |
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1 | | comply with the College Savings Plans Network's |
2 | | disclosure principles and (II) has made reasonable |
3 | | efforts to inform in-state residents of the existence |
4 | | of in-state qualified tuition programs by informing |
5 | | Illinois residents directly and, where applicable, to |
6 | | inform financial intermediaries distributing the |
7 | | program to inform in-state residents of the existence |
8 | | of in-state qualified tuition programs at least |
9 | | annually, an amount equal to the amount excluded from |
10 | | gross income under Section 529(c)(3)(B). |
11 | | For the purposes of this subparagraph (D-20), a |
12 | | qualified tuition program has made reasonable efforts |
13 | | if it makes disclosures (which may use the term |
14 | | "in-state program" or "in-state plan" and need not |
15 | | specifically refer to Illinois or its qualified |
16 | | programs by name) (i) directly to prospective |
17 | | participants in its offering materials or makes a |
18 | | public disclosure, such as a website posting; and (ii) |
19 | | where applicable, to intermediaries selling the |
20 | | out-of-state program in the same manner that the |
21 | | out-of-state program distributes its offering |
22 | | materials; |
23 | | (D-20.5) For taxable years beginning on or after |
24 | | January 1, 2018, in the case of a distribution from a |
25 | | qualified ABLE program under Section 529A of the |
26 | | Internal Revenue Code, other than a distribution from |
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1 | | a qualified ABLE program created under Section 16.6 of |
2 | | the State Treasurer Act, an amount equal to the amount |
3 | | excluded from gross income under Section 529A(c)(1)(B) |
4 | | of the Internal Revenue Code; |
5 | | (D-21) For taxable years beginning on or after |
6 | | January 1, 2007, in the case of transfer of moneys from |
7 | | a qualified tuition program under Section 529 of the |
8 | | Internal Revenue Code that is administered by the |
9 | | State to an out-of-state program, an amount equal to |
10 | | the amount of moneys previously deducted from base |
11 | | income under subsection (a)(2)(Y) of this Section; |
12 | | (D-21.5) For taxable years beginning on or after |
13 | | January 1, 2018, in the case of the transfer of moneys |
14 | | from a qualified tuition program under Section 529 or |
15 | | a qualified ABLE program under Section 529A of the |
16 | | Internal Revenue Code that is administered by this |
17 | | State to an ABLE account established under an |
18 | | out-of-state ABLE account program, an amount equal to |
19 | | the contribution component of the transferred amount |
20 | | that was previously deducted from base income under |
21 | | subsection (a)(2)(Y) or subsection (a)(2)(HH) of this |
22 | | Section; |
23 | | (D-22) For taxable years beginning on or after |
24 | | January 1, 2009, and prior to January 1, 2018, in the |
25 | | case of a nonqualified withdrawal or refund of moneys |
26 | | from a qualified tuition program under Section 529 of |
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1 | | the Internal Revenue Code administered by the State |
2 | | that is not used for qualified expenses at an eligible |
3 | | education institution, an amount equal to the |
4 | | contribution component of the nonqualified withdrawal |
5 | | or refund that was previously deducted from base |
6 | | income under subsection (a)(2)(y) of this Section, |
7 | | provided that the withdrawal or refund did not result |
8 | | from the beneficiary's death or disability. For |
9 | | taxable years beginning on or after January 1, 2018: |
10 | | (1) in the case of a nonqualified withdrawal or |
11 | | refund, as defined under Section 16.5 of the State |
12 | | Treasurer Act, of moneys from a qualified tuition |
13 | | program under Section 529 of the Internal Revenue Code |
14 | | administered by the State, an amount equal to the |
15 | | contribution component of the nonqualified withdrawal |
16 | | or refund that was previously deducted from base |
17 | | income under subsection (a)(2)(Y) of this Section, and |
18 | | (2) in the case of a nonqualified withdrawal or refund |
19 | | from a qualified ABLE program under Section 529A of |
20 | | the Internal Revenue Code administered by the State |
21 | | that is not used for qualified disability expenses, an |
22 | | amount equal to the contribution component of the |
23 | | nonqualified withdrawal or refund that was previously |
24 | | deducted from base income under subsection (a)(2)(HH) |
25 | | of this Section; |
26 | | (D-23) An amount equal to the credit allowable to |
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1 | | the taxpayer under Section 218(a) of this Act, |
2 | | determined without regard to Section 218(c) of this |
3 | | Act; |
4 | | (D-24) For taxable years ending on or after |
5 | | December 31, 2017, an amount equal to the deduction |
6 | | allowed under Section 199 of the Internal Revenue Code |
7 | | for the taxable year; |
8 | | (D-25) In the case of a resident, an amount equal |
9 | | to the amount of tax for which a credit is allowed |
10 | | pursuant to Section 201(p)(7) of this Act; |
11 | | and by deducting from the total so obtained the sum of the |
12 | | following amounts: |
13 | | (E) For taxable years ending before December 31, |
14 | | 2001, any amount included in such total in respect of |
15 | | any compensation (including but not limited to any |
16 | | compensation paid or accrued to a serviceman while a |
17 | | prisoner of war or missing in action) paid to a |
18 | | resident by reason of being on active duty in the Armed |
19 | | Forces of the United States and in respect of any |
20 | | compensation paid or accrued to a resident who as a |
21 | | governmental employee was a prisoner of war or missing |
22 | | in action, and in respect of any compensation paid to a |
23 | | resident in 1971 or thereafter for annual training |
24 | | performed pursuant to Sections 502 and 503, Title 32, |
25 | | United States Code as a member of the Illinois |
26 | | National Guard or, beginning with taxable years ending |
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1 | | on or after December 31, 2007, the National Guard of |
2 | | any other state. For taxable years ending on or after |
3 | | December 31, 2001, any amount included in such total |
4 | | in respect of any compensation (including but not |
5 | | limited to any compensation paid or accrued to a |
6 | | serviceman while a prisoner of war or missing in |
7 | | action) paid to a resident by reason of being a member |
8 | | of any component of the Armed Forces of the United |
9 | | States and in respect of any compensation paid or |
10 | | accrued to a resident who as a governmental employee |
11 | | was a prisoner of war or missing in action, and in |
12 | | respect of any compensation paid to a resident in 2001 |
13 | | or thereafter by reason of being a member of the |
14 | | Illinois National Guard or, beginning with taxable |
15 | | years ending on or after December 31, 2007, the |
16 | | National Guard of any other state. The provisions of |
17 | | this subparagraph (E) are exempt from the provisions |
18 | | of Section 250; |
19 | | (F) An amount equal to all amounts included in |
20 | | such total pursuant to the provisions of Sections |
21 | | 402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and |
22 | | 408 of the Internal Revenue Code, or included in such |
23 | | total as distributions under the provisions of any |
24 | | retirement or disability plan for employees of any |
25 | | governmental agency or unit, or retirement payments to |
26 | | retired partners, which payments are excluded in |
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1 | | computing net earnings from self employment by Section |
2 | | 1402 of the Internal Revenue Code and regulations |
3 | | adopted pursuant thereto; |
4 | | (G) The valuation limitation amount; |
5 | | (H) An amount equal to the amount of any tax |
6 | | imposed by this Act which was refunded to the taxpayer |
7 | | and included in such total for the taxable year; |
8 | | (I) An amount equal to all amounts included in |
9 | | such total pursuant to the provisions of Section 111 |
10 | | of the Internal Revenue Code as a recovery of items |
11 | | previously deducted from adjusted gross income in the |
12 | | computation of taxable income; |
13 | | (J) An amount equal to those dividends included in |
14 | | such total which were paid by a corporation which |
15 | | conducts business operations in a River Edge |
16 | | Redevelopment Zone or zones created under the River |
17 | | Edge Redevelopment Zone Act, and conducts |
18 | | substantially all of its operations in a River Edge |
19 | | Redevelopment Zone or zones. This subparagraph (J) is |
20 | | exempt from the provisions of Section 250; |
21 | | (K) An amount equal to those dividends included in |
22 | | such total that were paid by a corporation that |
23 | | conducts business operations in a federally designated |
24 | | Foreign Trade Zone or Sub-Zone and that is designated |
25 | | a High Impact Business located in Illinois; provided |
26 | | that dividends eligible for the deduction provided in |
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1 | | subparagraph (J) of paragraph (2) of this subsection |
2 | | shall not be eligible for the deduction provided under |
3 | | this subparagraph (K); |
4 | | (L) For taxable years ending after December 31, |
5 | | 1983, an amount equal to all social security benefits |
6 | | and railroad retirement benefits included in such |
7 | | total pursuant to Sections 72(r) and 86 of the |
8 | | Internal Revenue Code; |
9 | | (M) With the exception of any amounts subtracted |
10 | | under subparagraph (N), an amount equal to the sum of |
11 | | all amounts disallowed as deductions by (i) Sections |
12 | | 171(a)(2) and 265(a)(2) of the Internal Revenue Code, |
13 | | and all amounts of expenses allocable to interest and |
14 | | disallowed as deductions by Section 265(a)(1) of the |
15 | | Internal Revenue Code; and (ii) for taxable years |
16 | | ending on or after August 13, 1999, Sections |
17 | | 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the |
18 | | Internal Revenue Code, plus, for taxable years ending |
19 | | on or after December 31, 2011, Section 45G(e)(3) of |
20 | | the Internal Revenue Code and, for taxable years |
21 | | ending on or after December 31, 2008, any amount |
22 | | included in gross income under Section 87 of the |
23 | | Internal Revenue Code; the provisions of this |
24 | | subparagraph are exempt from the provisions of Section |
25 | | 250; |
26 | | (N) An amount equal to all amounts included in |
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1 | | such total which are exempt from taxation by this |
2 | | State either by reason of its statutes or Constitution |
3 | | or by reason of the Constitution, treaties or statutes |
4 | | of the United States; provided that, in the case of any |
5 | | statute of this State that exempts income derived from |
6 | | bonds or other obligations from the tax imposed under |
7 | | this Act, the amount exempted shall be the interest |
8 | | net of bond premium amortization; |
9 | | (O) An amount equal to any contribution made to a |
10 | | job training project established pursuant to the Tax |
11 | | Increment Allocation Redevelopment Act; |
12 | | (P) An amount equal to the amount of the deduction |
13 | | used to compute the federal income tax credit for |
14 | | restoration of substantial amounts held under claim of |
15 | | right for the taxable year pursuant to Section 1341 of |
16 | | the Internal Revenue Code or of any itemized deduction |
17 | | taken from adjusted gross income in the computation of |
18 | | taxable income for restoration of substantial amounts |
19 | | held under claim of right for the taxable year; |
20 | | (Q) An amount equal to any amounts included in |
21 | | such total, received by the taxpayer as an |
22 | | acceleration in the payment of life, endowment or |
23 | | annuity benefits in advance of the time they would |
24 | | otherwise be payable as an indemnity for a terminal |
25 | | illness; |
26 | | (R) An amount equal to the amount of any federal or |
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1 | | State bonus paid to veterans of the Persian Gulf War; |
2 | | (S) An amount, to the extent included in adjusted |
3 | | gross income, equal to the amount of a contribution |
4 | | made in the taxable year on behalf of the taxpayer to a |
5 | | medical care savings account established under the |
6 | | Medical Care Savings Account Act or the Medical Care |
7 | | Savings Account Act of 2000 to the extent the |
8 | | contribution is accepted by the account administrator |
9 | | as provided in that Act; |
10 | | (T) An amount, to the extent included in adjusted |
11 | | gross income, equal to the amount of interest earned |
12 | | in the taxable year on a medical care savings account |
13 | | established under the Medical Care Savings Account Act |
14 | | or the Medical Care Savings Account Act of 2000 on |
15 | | behalf of the taxpayer, other than interest added |
16 | | pursuant to item (D-5) of this paragraph (2); |
17 | | (U) For one taxable year beginning on or after |
18 | | January 1, 1994, an amount equal to the total amount of |
19 | | tax imposed and paid under subsections (a) and (b) of |
20 | | Section 201 of this Act on grant amounts received by |
21 | | the taxpayer under the Nursing Home Grant Assistance |
22 | | Act during the taxpayer's taxable years 1992 and 1993; |
23 | | (V) Beginning with tax years ending on or after |
24 | | December 31, 1995 and ending with tax years ending on |
25 | | or before December 31, 2004, an amount equal to the |
26 | | amount paid by a taxpayer who is a self-employed |
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1 | | taxpayer, a partner of a partnership, or a shareholder |
2 | | in a Subchapter S corporation for health insurance or |
3 | | long-term care insurance for that taxpayer or that |
4 | | taxpayer's spouse or dependents, to the extent that |
5 | | the amount paid for that health insurance or long-term |
6 | | care insurance may be deducted under Section 213 of |
7 | | the Internal Revenue Code, has not been deducted on |
8 | | the federal income tax return of the taxpayer, and |
9 | | does not exceed the taxable income attributable to |
10 | | that taxpayer's income, self-employment income, or |
11 | | Subchapter S corporation income; except that no |
12 | | deduction shall be allowed under this item (V) if the |
13 | | taxpayer is eligible to participate in any health |
14 | | insurance or long-term care insurance plan of an |
15 | | employer of the taxpayer or the taxpayer's spouse. The |
16 | | amount of the health insurance and long-term care |
17 | | insurance subtracted under this item (V) shall be |
18 | | determined by multiplying total health insurance and |
19 | | long-term care insurance premiums paid by the taxpayer |
20 | | times a number that represents the fractional |
21 | | percentage of eligible medical expenses under Section |
22 | | 213 of the Internal Revenue Code of 1986 not actually |
23 | | deducted on the taxpayer's federal income tax return; |
24 | | (W) For taxable years beginning on or after |
25 | | January 1, 1998, all amounts included in the |
26 | | taxpayer's federal gross income in the taxable year |
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1 | | from amounts converted from a regular IRA to a Roth |
2 | | IRA. This paragraph is exempt from the provisions of |
3 | | Section 250; |
4 | | (X) For taxable year 1999 and thereafter, an |
5 | | amount equal to the amount of any (i) distributions, |
6 | | to the extent includible in gross income for federal |
7 | | income tax purposes, made to the taxpayer because of |
8 | | his or her status as a victim of persecution for racial |
9 | | or religious reasons by Nazi Germany or any other Axis |
10 | | regime or as an heir of the victim and (ii) items of |
11 | | income, to the extent includible in gross income for |
12 | | federal income tax purposes, attributable to, derived |
13 | | from or in any way related to assets stolen from, |
14 | | hidden from, or otherwise lost to a victim of |
15 | | persecution for racial or religious reasons by Nazi |
16 | | Germany or any other Axis regime immediately prior to, |
17 | | during, and immediately after World War II, including, |
18 | | but not limited to, interest on the proceeds |
19 | | receivable as insurance under policies issued to a |
20 | | victim of persecution for racial or religious reasons |
21 | | by Nazi Germany or any other Axis regime by European |
22 | | insurance companies immediately prior to and during |
23 | | World War II; provided, however, this subtraction from |
24 | | federal adjusted gross income does not apply to assets |
25 | | acquired with such assets or with the proceeds from |
26 | | the sale of such assets; provided, further, this |
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1 | | paragraph shall only apply to a taxpayer who was the |
2 | | first recipient of such assets after their recovery |
3 | | and who is a victim of persecution for racial or |
4 | | religious reasons by Nazi Germany or any other Axis |
5 | | regime or as an heir of the victim. The amount of and |
6 | | the eligibility for any public assistance, benefit, or |
7 | | similar entitlement is not affected by the inclusion |
8 | | of items (i) and (ii) of this paragraph in gross income |
9 | | for federal income tax purposes. This paragraph is |
10 | | exempt from the provisions of Section 250; |
11 | | (Y) For taxable years beginning on or after |
12 | | January 1, 2002 and ending on or before December 31, |
13 | | 2004, moneys contributed in the taxable year to a |
14 | | College Savings Pool account under Section 16.5 of the |
15 | | State Treasurer Act, except that amounts excluded from |
16 | | gross income under Section 529(c)(3)(C)(i) of the |
17 | | Internal Revenue Code shall not be considered moneys |
18 | | contributed under this subparagraph (Y). For taxable |
19 | | years beginning on or after January 1, 2005, a maximum |
20 | | of $10,000 contributed in the taxable year to (i) a |
21 | | College Savings Pool account under Section 16.5 of the |
22 | | State Treasurer Act or (ii) the Illinois Prepaid |
23 | | Tuition Trust Fund, except that amounts excluded from |
24 | | gross income under Section 529(c)(3)(C)(i) of the |
25 | | Internal Revenue Code shall not be considered moneys |
26 | | contributed under this subparagraph (Y). For purposes |
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1 | | of this subparagraph, contributions made by an |
2 | | employer on behalf of an employee, or matching |
3 | | contributions made by an employee, shall be treated as |
4 | | made by the employee. This subparagraph (Y) is exempt |
5 | | from the provisions of Section 250; |
6 | | (Z) For taxable years 2001 and thereafter, for the |
7 | | taxable year in which the bonus depreciation deduction |
8 | | is taken on the taxpayer's federal income tax return |
9 | | under subsection (k) of Section 168 of the Internal |
10 | | Revenue Code and for each applicable taxable year |
11 | | thereafter, an amount equal to "x", where: |
12 | | (1) "y" equals the amount of the depreciation |
13 | | deduction taken for the taxable year on the |
14 | | taxpayer's federal income tax return on property |
15 | | for which the bonus depreciation deduction was |
16 | | taken in any year under subsection (k) of Section |
17 | | 168 of the Internal Revenue Code, but not |
18 | | including the bonus depreciation deduction; |
19 | | (2) for taxable years ending on or before |
20 | | December 31, 2005, "x" equals "y" multiplied by 30 |
21 | | and then divided by 70 (or "y" multiplied by |
22 | | 0.429); and |
23 | | (3) for taxable years ending after December |
24 | | 31, 2005: |
25 | | (i) for property on which a bonus |
26 | | depreciation deduction of 30% of the adjusted |
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1 | | basis was taken, "x" equals "y" multiplied by |
2 | | 30 and then divided by 70 (or "y" multiplied |
3 | | by 0.429); |
4 | | (ii) for property on which a bonus |
5 | | depreciation deduction of 50% of the adjusted |
6 | | basis was taken, "x" equals "y" multiplied by |
7 | | 1.0; |
8 | | (iii) for property on which a bonus |
9 | | depreciation deduction of 100% of the adjusted |
10 | | basis was taken in a taxable year ending on or |
11 | | after December 31, 2021, "x" equals the |
12 | | depreciation deduction that would be allowed |
13 | | on that property if the taxpayer had made the |
14 | | election under Section 168(k)(7) of the |
15 | | Internal Revenue Code to not claim bonus |
16 | | depreciation on that property; and |
17 | | (iv) for property on which a bonus |
18 | | depreciation deduction of a percentage other |
19 | | than 30%, 50% or 100% of the adjusted basis |
20 | | was taken in a taxable year ending on or after |
21 | | December 31, 2021, "x" equals "y" multiplied |
22 | | by 100 times the percentage bonus depreciation |
23 | | on the property (that is, 100(bonus%)) and |
24 | | then divided by 100 times 1 minus the |
25 | | percentage bonus depreciation on the property |
26 | | (that is, 100(1-bonus%)). |
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1 | | The aggregate amount deducted under this |
2 | | subparagraph in all taxable years for any one piece of |
3 | | property may not exceed the amount of the bonus |
4 | | depreciation deduction taken on that property on the |
5 | | taxpayer's federal income tax return under subsection |
6 | | (k) of Section 168 of the Internal Revenue Code. This |
7 | | subparagraph (Z) is exempt from the provisions of |
8 | | Section 250; |
9 | | (AA) If the taxpayer sells, transfers, abandons, |
10 | | or otherwise disposes of property for which the |
11 | | taxpayer was required in any taxable year to make an |
12 | | addition modification under subparagraph (D-15), then |
13 | | an amount equal to that addition modification. |
14 | | If the taxpayer continues to own property through |
15 | | the last day of the last tax year for which a |
16 | | subtraction is allowed with respect to that property |
17 | | under subparagraph (Z) and for which the taxpayer was |
18 | | required in any taxable year to make an addition |
19 | | modification under subparagraph (D-15), then an amount |
20 | | equal to that addition modification. |
21 | | The taxpayer is allowed to take the deduction |
22 | | under this subparagraph only once with respect to any |
23 | | one piece of property. |
24 | | This subparagraph (AA) is exempt from the |
25 | | provisions of Section 250; |
26 | | (BB) Any amount included in adjusted gross income, |
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1 | | other than salary, received by a driver in a |
2 | | ridesharing arrangement using a motor vehicle; |
3 | | (CC) The amount of (i) any interest income (net of |
4 | | the deductions allocable thereto) taken into account |
5 | | for the taxable year with respect to a transaction |
6 | | with a taxpayer that is required to make an addition |
7 | | modification with respect to such transaction under |
8 | | Section 203(a)(2)(D-17), 203(b)(2)(E-12), |
9 | | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed |
10 | | the amount of that addition modification, and (ii) any |
11 | | income from intangible property (net of the deductions |
12 | | allocable thereto) taken into account for the taxable |
13 | | year with respect to a transaction with a taxpayer |
14 | | that is required to make an addition modification with |
15 | | respect to such transaction under Section |
16 | | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or |
17 | | 203(d)(2)(D-8), but not to exceed the amount of that |
18 | | addition modification. This subparagraph (CC) is |
19 | | exempt from the provisions of Section 250; |
20 | | (DD) An amount equal to the interest income taken |
21 | | into account for the taxable year (net of the |
22 | | deductions allocable thereto) with respect to |
23 | | transactions with (i) a foreign person who would be a |
24 | | member of the taxpayer's unitary business group but |
25 | | for the fact that the foreign person's business |
26 | | activity outside the United States is 80% or more of |
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1 | | that person's total business activity and (ii) for |
2 | | taxable years ending on or after December 31, 2008, to |
3 | | a person who would be a member of the same unitary |
4 | | business group but for the fact that the person is |
5 | | prohibited under Section 1501(a)(27) from being |
6 | | included in the unitary business group because he or |
7 | | she is ordinarily required to apportion business |
8 | | income under different subsections of Section 304, but |
9 | | not to exceed the addition modification required to be |
10 | | made for the same taxable year under Section |
11 | | 203(a)(2)(D-17) for interest paid, accrued, or |
12 | | incurred, directly or indirectly, to the same person. |
13 | | This subparagraph (DD) is exempt from the provisions |
14 | | of Section 250; |
15 | | (EE) An amount equal to the income from intangible |
16 | | property taken into account for the taxable year (net |
17 | | of the deductions allocable thereto) with respect to |
18 | | transactions with (i) a foreign person who would be a |
19 | | member of the taxpayer's unitary business group but |
20 | | for the fact that the foreign person's business |
21 | | activity outside the United States is 80% or more of |
22 | | that person's total business activity and (ii) for |
23 | | taxable years ending on or after December 31, 2008, to |
24 | | a person who would be a member of the same unitary |
25 | | business group but for the fact that the person is |
26 | | prohibited under Section 1501(a)(27) from being |
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1 | | included in the unitary business group because he or |
2 | | she is ordinarily required to apportion business |
3 | | income under different subsections of Section 304, but |
4 | | not to exceed the addition modification required to be |
5 | | made for the same taxable year under Section |
6 | | 203(a)(2)(D-18) for intangible expenses and costs |
7 | | paid, accrued, or incurred, directly or indirectly, to |
8 | | the same foreign person. This subparagraph (EE) is |
9 | | exempt from the provisions of Section 250; |
10 | | (FF) An amount equal to any amount awarded to the |
11 | | taxpayer during the taxable year by the Court of |
12 | | Claims under subsection (c) of Section 8 of the Court |
13 | | of Claims Act for time unjustly served in a State |
14 | | prison. This subparagraph (FF) is exempt from the |
15 | | provisions of Section 250; |
16 | | (GG) For taxable years ending on or after December |
17 | | 31, 2011, in the case of a taxpayer who was required to |
18 | | add back any insurance premiums under Section |
19 | | 203(a)(2)(D-19), such taxpayer may elect to subtract |
20 | | that part of a reimbursement received from the |
21 | | insurance company equal to the amount of the expense |
22 | | or loss (including expenses incurred by the insurance |
23 | | company) that would have been taken into account as a |
24 | | deduction for federal income tax purposes if the |
25 | | expense or loss had been uninsured. If a taxpayer |
26 | | makes the election provided for by this subparagraph |
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1 | | (GG), the insurer to which the premiums were paid must |
2 | | add back to income the amount subtracted by the |
3 | | taxpayer pursuant to this subparagraph (GG). This |
4 | | subparagraph (GG) is exempt from the provisions of |
5 | | Section 250; |
6 | | (HH) For taxable years beginning on or after |
7 | | January 1, 2018 and prior to January 1, 2028, a maximum |
8 | | of $10,000 contributed in the taxable year to a |
9 | | qualified ABLE account under Section 16.6 of the State |
10 | | Treasurer Act, except that amounts excluded from gross |
11 | | income under Section 529(c)(3)(C)(i) or Section |
12 | | 529A(c)(1)(C) of the Internal Revenue Code shall not |
13 | | be considered moneys contributed under this |
14 | | subparagraph (HH). For purposes of this subparagraph |
15 | | (HH), contributions made by an employer on behalf of |
16 | | an employee, or matching contributions made by an |
17 | | employee, shall be treated as made by the employee; |
18 | | (II) For taxable years that begin on or after |
19 | | January 1, 2021 and begin before January 1, 2026, the |
20 | | amount that is included in the taxpayer's federal |
21 | | adjusted gross income pursuant to Section 61 of the |
22 | | Internal Revenue Code as discharge of indebtedness |
23 | | attributable to student loan forgiveness and that is |
24 | | not excluded from the taxpayer's federal adjusted |
25 | | gross income pursuant to paragraph (5) of subsection |
26 | | (f) of Section 108 of the Internal Revenue Code; and |
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1 | | (JJ) For taxable years beginning on or after |
2 | | January 1, 2023, for any cannabis establishment |
3 | | operating in this State and licensed under the |
4 | | Cannabis Regulation and Tax Act or any cannabis |
5 | | cultivation center or medical cannabis dispensing |
6 | | organization operating in this State and licensed |
7 | | under the Compassionate Use of Medical Cannabis |
8 | | Program Act, an amount equal to the deductions that |
9 | | were disallowed under Section 280E of the Internal |
10 | | Revenue Code for the taxable year and that would not be |
11 | | added back under this subsection. The provisions of |
12 | | this subparagraph (JJ) are exempt from the provisions |
13 | | of Section 250 ; . |
14 | | (KK) (JJ) To the extent includible in gross income |
15 | | for federal income tax purposes, any amount awarded or |
16 | | paid to the taxpayer as a result of a judgment or |
17 | | settlement for fertility fraud as provided in Section |
18 | | 15 of the Illinois Fertility Fraud Act, donor |
19 | | fertility fraud as provided in Section 20 of the |
20 | | Illinois Fertility Fraud Act, or similar action in |
21 | | another state ; and . |
22 | | (LL) For taxable years beginning on or after |
23 | | January 1, 2025, if the taxpayer is a qualified |
24 | | worker, an amount equal to the amount included in the |
25 | | taxpayer's federal adjusted gross income that is |
26 | | attributable to student loan repayment assistance |
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1 | | received by the taxpayer during the taxable year from |
2 | | a qualified community foundation. |
3 | | As used in this paragraph (LL): |
4 | | "Full-time employee" means an individual who is |
5 | | employed for consideration for at least 35 hours each |
6 | | week or who renders any other standard of service |
7 | | generally accepted by industry custom or practice as |
8 | | full-time employment. |
9 | | "Qualified community foundation" means a community |
10 | | foundation or similar publicly supported organization |
11 | | described in Section 170(b)(1)(A)(vi) of the Internal |
12 | | Revenue Code of 1986 that is organized or operating in |
13 | | this State and that substantially complies, as |
14 | | determined by the Department of Revenue, with the |
15 | | national standards for United States community |
16 | | foundations established by the National Council on |
17 | | Foundations. |
18 | | "Qualified worker" means an individual who meets |
19 | | all of the following: |
20 | | (1) the individual is a full-time employee of |
21 | | a business that meets one or more of the |
22 | | following: |
23 | | (A) the business is a qualified new |
24 | | business venture that is registered with the |
25 | | Department of Commerce and Economic |
26 | | Opportunity under Section 220 of the Illinois |
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1 | | Income Tax Act; |
2 | | (B) the business is primarily engaged in a |
3 | | targeted growth industry; |
4 | | (C) the business is a minority-owned |
5 | | business, a women-owned business, or a |
6 | | business owned by a person with a disability, |
7 | | as those terms are defined in the Business |
8 | | Enterprise for Minorities, Women, and Persons |
9 | | with Disabilities Act; or |
10 | | (D) the business is a not-for-profit |
11 | | corporation, as defined in the General Not For |
12 | | Profit Corporation Act of 1986; |
13 | | (2) the individual is employed by the business |
14 | | described in paragraph (1) at a job site that is |
15 | | located in an Enterprise Zone, an Opportunity |
16 | | Zone, an underserved area, or an area that has a |
17 | | bachelor's degree attainment rate for the |
18 | | population that is below the State or national |
19 | | average for the population, as determined by the |
20 | | United States Census Bureau; |
21 | | (3) the individual is a United States citizen |
22 | | or an eligible non-citizen; |
23 | | (4) the individual (i) received a bachelor's |
24 | | degree or higher and has an outstanding balance |
25 | | due on a qualified education loan, as defined in |
26 | | Section 221 of the Internal Revenue Code, or (ii) |
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1 | | the individual accrued educational debt while |
2 | | pursuing skilled trades and related schooling; and |
3 | | (5) the individual does not receive any other |
4 | | student loan forgiveness. |
5 | | "Student loan repayment assistance" means grants |
6 | | or post-graduation scholarships made by a community |
7 | | foundation directly to a student loan servicer on |
8 | | behalf of a qualified worker. |
9 | | "Targeted growth industry means one or more of the |
10 | | following: |
11 | | (1) advanced manufacturing; |
12 | | (2) agribusiness and food processing; |
13 | | (3) transportation distribution and logistics; |
14 | | (4) life sciences and biotechnology; |
15 | | (5) business and professional services; or |
16 | | (6) energy. |
17 | | "Underserved area" has the meaning given to that |
18 | | term in Section 5-5 of the Economic Development for a |
19 | | Growing Economy Tax Credit Act. |
20 | | This subparagraph (LL) is exempt from the |
21 | | provisions of Section 250. |
22 | | (b) Corporations. |
23 | | (1) In general. In the case of a corporation, base |
24 | | income means an amount equal to the taxpayer's taxable |
25 | | income for the taxable year as modified by paragraph (2). |
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1 | | (2) Modifications. The taxable income referred to in |
2 | | paragraph (1) shall be modified by adding thereto the sum |
3 | | of the following amounts: |
4 | | (A) An amount equal to all amounts paid or accrued |
5 | | to the taxpayer as interest and all distributions |
6 | | received from regulated investment companies during |
7 | | the taxable year to the extent excluded from gross |
8 | | income in the computation of taxable income; |
9 | | (B) An amount equal to the amount of tax imposed by |
10 | | this Act to the extent deducted from gross income in |
11 | | the computation of taxable income for the taxable |
12 | | year; |
13 | | (C) In the case of a regulated investment company, |
14 | | an amount equal to the excess of (i) the net long-term |
15 | | capital gain for the taxable year, over (ii) the |
16 | | amount of the capital gain dividends designated as |
17 | | such in accordance with Section 852(b)(3)(C) of the |
18 | | Internal Revenue Code and any amount designated under |
19 | | Section 852(b)(3)(D) of the Internal Revenue Code, |
20 | | attributable to the taxable year (this amendatory Act |
21 | | of 1995 (Public Act 89-89) is declarative of existing |
22 | | law and is not a new enactment); |
23 | | (D) The amount of any net operating loss deduction |
24 | | taken in arriving at taxable income, other than a net |
25 | | operating loss carried forward from a taxable year |
26 | | ending prior to December 31, 1986; |
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1 | | (E) For taxable years in which a net operating |
2 | | loss carryback or carryforward from a taxable year |
3 | | ending prior to December 31, 1986 is an element of |
4 | | taxable income under paragraph (1) of subsection (e) |
5 | | or subparagraph (E) of paragraph (2) of subsection |
6 | | (e), the amount by which addition modifications other |
7 | | than those provided by this subparagraph (E) exceeded |
8 | | subtraction modifications in such earlier taxable |
9 | | year, with the following limitations applied in the |
10 | | order that they are listed: |
11 | | (i) the addition modification relating to the |
12 | | net operating loss carried back or forward to the |
13 | | taxable year from any taxable year ending prior to |
14 | | December 31, 1986 shall be reduced by the amount |
15 | | of addition modification under this subparagraph |
16 | | (E) which related to that net operating loss and |
17 | | which was taken into account in calculating the |
18 | | base income of an earlier taxable year, and |
19 | | (ii) the addition modification relating to the |
20 | | net operating loss carried back or forward to the |
21 | | taxable year from any taxable year ending prior to |
22 | | December 31, 1986 shall not exceed the amount of |
23 | | such carryback or carryforward; |
24 | | For taxable years in which there is a net |
25 | | operating loss carryback or carryforward from more |
26 | | than one other taxable year ending prior to December |
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1 | | 31, 1986, the addition modification provided in this |
2 | | subparagraph (E) shall be the sum of the amounts |
3 | | computed independently under the preceding provisions |
4 | | of this subparagraph (E) for each such taxable year; |
5 | | (E-5) For taxable years ending after December 31, |
6 | | 1997, an amount equal to any eligible remediation |
7 | | costs that the corporation deducted in computing |
8 | | adjusted gross income and for which the corporation |
9 | | claims a credit under subsection (l) of Section 201; |
10 | | (E-10) For taxable years 2001 and thereafter, an |
11 | | amount equal to the bonus depreciation deduction taken |
12 | | on the taxpayer's federal income tax return for the |
13 | | taxable year under subsection (k) of Section 168 of |
14 | | the Internal Revenue Code; |
15 | | (E-11) If the taxpayer sells, transfers, abandons, |
16 | | or otherwise disposes of property for which the |
17 | | taxpayer was required in any taxable year to make an |
18 | | addition modification under subparagraph (E-10), then |
19 | | an amount equal to the aggregate amount of the |
20 | | deductions taken in all taxable years under |
21 | | subparagraph (T) with respect to that property. |
22 | | If the taxpayer continues to own property through |
23 | | the last day of the last tax year for which a |
24 | | subtraction is allowed with respect to that property |
25 | | under subparagraph (T) and for which the taxpayer was |
26 | | allowed in any taxable year to make a subtraction |
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1 | | modification under subparagraph (T), then an amount |
2 | | equal to that subtraction modification. |
3 | | The taxpayer is required to make the addition |
4 | | modification under this subparagraph only once with |
5 | | respect to any one piece of property; |
6 | | (E-12) An amount equal to the amount otherwise |
7 | | allowed as a deduction in computing base income for |
8 | | interest paid, accrued, or incurred, directly or |
9 | | indirectly, (i) for taxable years ending on or after |
10 | | December 31, 2004, to a foreign person who would be a |
11 | | member of the same unitary business group but for the |
12 | | fact the foreign person's business activity outside |
13 | | the United States is 80% or more of the foreign |
14 | | person's total business activity and (ii) for taxable |
15 | | years ending on or after December 31, 2008, to a person |
16 | | who would be a member of the same unitary business |
17 | | group but for the fact that the person is prohibited |
18 | | under Section 1501(a)(27) from being included in the |
19 | | unitary business group because he or she is ordinarily |
20 | | required to apportion business income under different |
21 | | subsections of Section 304. The addition modification |
22 | | required by this subparagraph shall be reduced to the |
23 | | extent that dividends were included in base income of |
24 | | the unitary group for the same taxable year and |
25 | | received by the taxpayer or by a member of the |
26 | | taxpayer's unitary business group (including amounts |
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1 | | included in gross income pursuant to Sections 951 |
2 | | through 964 of the Internal Revenue Code and amounts |
3 | | included in gross income under Section 78 of the |
4 | | Internal Revenue Code) with respect to the stock of |
5 | | the same person to whom the interest was paid, |
6 | | accrued, or incurred. |
7 | | This paragraph shall not apply to the following: |
8 | | (i) an item of interest paid, accrued, or |
9 | | incurred, directly or indirectly, to a person who |
10 | | is subject in a foreign country or state, other |
11 | | than a state which requires mandatory unitary |
12 | | reporting, to a tax on or measured by net income |
13 | | with respect to such interest; or |
14 | | (ii) an item of interest paid, accrued, or |
15 | | incurred, directly or indirectly, to a person if |
16 | | the taxpayer can establish, based on a |
17 | | preponderance of the evidence, both of the |
18 | | following: |
19 | | (a) the person, during the same taxable |
20 | | year, paid, accrued, or incurred, the interest |
21 | | to a person that is not a related member, and |
22 | | (b) the transaction giving rise to the |
23 | | interest expense between the taxpayer and the |
24 | | person did not have as a principal purpose the |
25 | | avoidance of Illinois income tax, and is paid |
26 | | pursuant to a contract or agreement that |
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1 | | reflects an arm's-length interest rate and |
2 | | terms; or |
3 | | (iii) the taxpayer can establish, based on |
4 | | clear and convincing evidence, that the interest |
5 | | paid, accrued, or incurred relates to a contract |
6 | | or agreement entered into at arm's-length rates |
7 | | and terms and the principal purpose for the |
8 | | payment is not federal or Illinois tax avoidance; |
9 | | or |
10 | | (iv) an item of interest paid, accrued, or |
11 | | incurred, directly or indirectly, to a person if |
12 | | the taxpayer establishes by clear and convincing |
13 | | evidence that the adjustments are unreasonable; or |
14 | | if the taxpayer and the Director agree in writing |
15 | | to the application or use of an alternative method |
16 | | of apportionment under Section 304(f). |
17 | | Nothing in this subsection shall preclude the |
18 | | Director from making any other adjustment |
19 | | otherwise allowed under Section 404 of this Act |
20 | | for any tax year beginning after the effective |
21 | | date of this amendment provided such adjustment is |
22 | | made pursuant to regulation adopted by the |
23 | | Department and such regulations provide methods |
24 | | and standards by which the Department will utilize |
25 | | its authority under Section 404 of this Act; |
26 | | (E-13) An amount equal to the amount of intangible |
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1 | | expenses and costs otherwise allowed as a deduction in |
2 | | computing base income, and that were paid, accrued, or |
3 | | incurred, directly or indirectly, (i) for taxable |
4 | | years ending on or after December 31, 2004, to a |
5 | | foreign person who would be a member of the same |
6 | | unitary business group but for the fact that the |
7 | | foreign person's business activity outside the United |
8 | | States is 80% or more of that person's total business |
9 | | activity and (ii) for taxable years ending on or after |
10 | | December 31, 2008, to a person who would be a member of |
11 | | the same unitary business group but for the fact that |
12 | | the person is prohibited under Section 1501(a)(27) |
13 | | from being included in the unitary business group |
14 | | because he or she is ordinarily required to apportion |
15 | | business income under different subsections of Section |
16 | | 304. The addition modification required by this |
17 | | subparagraph shall be reduced to the extent that |
18 | | dividends were included in base income of the unitary |
19 | | group for the same taxable year and received by the |
20 | | taxpayer or by a member of the taxpayer's unitary |
21 | | business group (including amounts included in gross |
22 | | income pursuant to Sections 951 through 964 of the |
23 | | Internal Revenue Code and amounts included in gross |
24 | | income under Section 78 of the Internal Revenue Code) |
25 | | with respect to the stock of the same person to whom |
26 | | the intangible expenses and costs were directly or |
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1 | | indirectly paid, incurred, or accrued. The preceding |
2 | | sentence shall not apply to the extent that the same |
3 | | dividends caused a reduction to the addition |
4 | | modification required under Section 203(b)(2)(E-12) of |
5 | | this Act. As used in this subparagraph, the term |
6 | | "intangible expenses and costs" includes (1) expenses, |
7 | | losses, and costs for, or related to, the direct or |
8 | | indirect acquisition, use, maintenance or management, |
9 | | ownership, sale, exchange, or any other disposition of |
10 | | intangible property; (2) losses incurred, directly or |
11 | | indirectly, from factoring transactions or discounting |
12 | | transactions; (3) royalty, patent, technical, and |
13 | | copyright fees; (4) licensing fees; and (5) other |
14 | | similar expenses and costs. For purposes of this |
15 | | subparagraph, "intangible property" includes patents, |
16 | | patent applications, trade names, trademarks, service |
17 | | marks, copyrights, mask works, trade secrets, and |
18 | | similar types of intangible assets. |
19 | | This paragraph shall not apply to the following: |
20 | | (i) any item of intangible expenses or costs |
21 | | paid, accrued, or incurred, directly or |
22 | | indirectly, from a transaction with a person who |
23 | | is subject in a foreign country or state, other |
24 | | than a state which requires mandatory unitary |
25 | | reporting, to a tax on or measured by net income |
26 | | with respect to such item; or |
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1 | | (ii) any item of intangible expense or cost |
2 | | paid, accrued, or incurred, directly or |
3 | | indirectly, if the taxpayer can establish, based |
4 | | on a preponderance of the evidence, both of the |
5 | | following: |
6 | | (a) the person during the same taxable |
7 | | year paid, accrued, or incurred, the |
8 | | intangible expense or cost to a person that is |
9 | | not a related member, and |
10 | | (b) the transaction giving rise to the |
11 | | intangible expense or cost between the |
12 | | taxpayer and the person did not have as a |
13 | | principal purpose the avoidance of Illinois |
14 | | income tax, and is paid pursuant to a contract |
15 | | or agreement that reflects arm's-length terms; |
16 | | or |
17 | | (iii) any item of intangible expense or cost |
18 | | paid, accrued, or incurred, directly or |
19 | | indirectly, from a transaction with a person if |
20 | | the taxpayer establishes by clear and convincing |
21 | | evidence, that the adjustments are unreasonable; |
22 | | or if the taxpayer and the Director agree in |
23 | | writing to the application or use of an |
24 | | alternative method of apportionment under Section |
25 | | 304(f); |
26 | | Nothing in this subsection shall preclude the |
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1 | | Director from making any other adjustment |
2 | | otherwise allowed under Section 404 of this Act |
3 | | for any tax year beginning after the effective |
4 | | date of this amendment provided such adjustment is |
5 | | made pursuant to regulation adopted by the |
6 | | Department and such regulations provide methods |
7 | | and standards by which the Department will utilize |
8 | | its authority under Section 404 of this Act; |
9 | | (E-14) For taxable years ending on or after |
10 | | December 31, 2008, an amount equal to the amount of |
11 | | insurance premium expenses and costs otherwise allowed |
12 | | as a deduction in computing base income, and that were |
13 | | paid, accrued, or incurred, directly or indirectly, to |
14 | | a person who would be a member of the same unitary |
15 | | business group but for the fact that the person is |
16 | | prohibited under Section 1501(a)(27) from being |
17 | | included in the unitary business group because he or |
18 | | she is ordinarily required to apportion business |
19 | | income under different subsections of Section 304. The |
20 | | addition modification required by this subparagraph |
21 | | shall be reduced to the extent that dividends were |
22 | | included in base income of the unitary group for the |
23 | | same taxable year and received by the taxpayer or by a |
24 | | member of the taxpayer's unitary business group |
25 | | (including amounts included in gross income under |
26 | | Sections 951 through 964 of the Internal Revenue Code |
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1 | | and amounts included in gross income under Section 78 |
2 | | of the Internal Revenue Code) with respect to the |
3 | | stock of the same person to whom the premiums and costs |
4 | | were directly or indirectly paid, incurred, or |
5 | | accrued. The preceding sentence does not apply to the |
6 | | extent that the same dividends caused a reduction to |
7 | | the addition modification required under Section |
8 | | 203(b)(2)(E-12) or Section 203(b)(2)(E-13) of this |
9 | | Act; |
10 | | (E-15) For taxable years beginning after December |
11 | | 31, 2008, any deduction for dividends paid by a |
12 | | captive real estate investment trust that is allowed |
13 | | to a real estate investment trust under Section |
14 | | 857(b)(2)(B) of the Internal Revenue Code for |
15 | | dividends paid; |
16 | | (E-16) An amount equal to the credit allowable to |
17 | | the taxpayer under Section 218(a) of this Act, |
18 | | determined without regard to Section 218(c) of this |
19 | | Act; |
20 | | (E-17) For taxable years ending on or after |
21 | | December 31, 2017, an amount equal to the deduction |
22 | | allowed under Section 199 of the Internal Revenue Code |
23 | | for the taxable year; |
24 | | (E-18) for taxable years beginning after December |
25 | | 31, 2018, an amount equal to the deduction allowed |
26 | | under Section 250(a)(1)(A) of the Internal Revenue |
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1 | | Code for the taxable year; |
2 | | (E-19) for taxable years ending on or after June |
3 | | 30, 2021, an amount equal to the deduction allowed |
4 | | under Section 250(a)(1)(B)(i) of the Internal Revenue |
5 | | Code for the taxable year; |
6 | | (E-20) for taxable years ending on or after June |
7 | | 30, 2021, an amount equal to the deduction allowed |
8 | | under Sections 243(e) and 245A(a) of the Internal |
9 | | Revenue Code for the taxable year. |
10 | | and by deducting from the total so obtained the sum of the |
11 | | following amounts: |
12 | | (F) An amount equal to the amount of any tax |
13 | | imposed by this Act which was refunded to the taxpayer |
14 | | and included in such total for the taxable year; |
15 | | (G) An amount equal to any amount included in such |
16 | | total under Section 78 of the Internal Revenue Code; |
17 | | (H) In the case of a regulated investment company, |
18 | | an amount equal to the amount of exempt interest |
19 | | dividends as defined in subsection (b)(5) of Section |
20 | | 852 of the Internal Revenue Code, paid to shareholders |
21 | | for the taxable year; |
22 | | (I) With the exception of any amounts subtracted |
23 | | under subparagraph (J), an amount equal to the sum of |
24 | | all amounts disallowed as deductions by (i) Sections |
25 | | 171(a)(2) and 265(a)(2) and amounts disallowed as |
26 | | interest expense by Section 291(a)(3) of the Internal |
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1 | | Revenue Code, and all amounts of expenses allocable to |
2 | | interest and disallowed as deductions by Section |
3 | | 265(a)(1) of the Internal Revenue Code; and (ii) for |
4 | | taxable years ending on or after August 13, 1999, |
5 | | Sections 171(a)(2), 265, 280C, 291(a)(3), and |
6 | | 832(b)(5)(B)(i) of the Internal Revenue Code, plus, |
7 | | for tax years ending on or after December 31, 2011, |
8 | | amounts disallowed as deductions by Section 45G(e)(3) |
9 | | of the Internal Revenue Code and, for taxable years |
10 | | ending on or after December 31, 2008, any amount |
11 | | included in gross income under Section 87 of the |
12 | | Internal Revenue Code and the policyholders' share of |
13 | | tax-exempt interest of a life insurance company under |
14 | | Section 807(a)(2)(B) of the Internal Revenue Code (in |
15 | | the case of a life insurance company with gross income |
16 | | from a decrease in reserves for the tax year) or |
17 | | Section 807(b)(1)(B) of the Internal Revenue Code (in |
18 | | the case of a life insurance company allowed a |
19 | | deduction for an increase in reserves for the tax |
20 | | year); the provisions of this subparagraph are exempt |
21 | | from the provisions of Section 250; |
22 | | (J) An amount equal to all amounts included in |
23 | | such total which are exempt from taxation by this |
24 | | State either by reason of its statutes or Constitution |
25 | | or by reason of the Constitution, treaties or statutes |
26 | | of the United States; provided that, in the case of any |
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1 | | statute of this State that exempts income derived from |
2 | | bonds or other obligations from the tax imposed under |
3 | | this Act, the amount exempted shall be the interest |
4 | | net of bond premium amortization; |
5 | | (K) An amount equal to those dividends included in |
6 | | such total which were paid by a corporation which |
7 | | conducts business operations in a River Edge |
8 | | Redevelopment Zone or zones created under the River |
9 | | Edge Redevelopment Zone Act and conducts substantially |
10 | | all of its operations in a River Edge Redevelopment |
11 | | Zone or zones. This subparagraph (K) is exempt from |
12 | | the provisions of Section 250; |
13 | | (L) An amount equal to those dividends included in |
14 | | such total that were paid by a corporation that |
15 | | conducts business operations in a federally designated |
16 | | Foreign Trade Zone or Sub-Zone and that is designated |
17 | | a High Impact Business located in Illinois; provided |
18 | | that dividends eligible for the deduction provided in |
19 | | subparagraph (K) of paragraph 2 of this subsection |
20 | | shall not be eligible for the deduction provided under |
21 | | this subparagraph (L); |
22 | | (M) For any taxpayer that is a financial |
23 | | organization within the meaning of Section 304(c) of |
24 | | this Act, an amount included in such total as interest |
25 | | income from a loan or loans made by such taxpayer to a |
26 | | borrower, to the extent that such a loan is secured by |
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1 | | property which is eligible for the River Edge |
2 | | Redevelopment Zone Investment Credit. To determine the |
3 | | portion of a loan or loans that is secured by property |
4 | | eligible for a Section 201(f) investment credit to the |
5 | | borrower, the entire principal amount of the loan or |
6 | | loans between the taxpayer and the borrower should be |
7 | | divided into the basis of the Section 201(f) |
8 | | investment credit property which secures the loan or |
9 | | loans, using for this purpose the original basis of |
10 | | such property on the date that it was placed in service |
11 | | in the River Edge Redevelopment Zone. The subtraction |
12 | | modification available to the taxpayer in any year |
13 | | under this subsection shall be that portion of the |
14 | | total interest paid by the borrower with respect to |
15 | | such loan attributable to the eligible property as |
16 | | calculated under the previous sentence. This |
17 | | subparagraph (M) is exempt from the provisions of |
18 | | Section 250; |
19 | | (M-1) For any taxpayer that is a financial |
20 | | organization within the meaning of Section 304(c) of |
21 | | this Act, an amount included in such total as interest |
22 | | income from a loan or loans made by such taxpayer to a |
23 | | borrower, to the extent that such a loan is secured by |
24 | | property which is eligible for the High Impact |
25 | | Business Investment Credit. To determine the portion |
26 | | of a loan or loans that is secured by property eligible |
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1 | | for a Section 201(h) investment credit to the |
2 | | borrower, the entire principal amount of the loan or |
3 | | loans between the taxpayer and the borrower should be |
4 | | divided into the basis of the Section 201(h) |
5 | | investment credit property which secures the loan or |
6 | | loans, using for this purpose the original basis of |
7 | | such property on the date that it was placed in service |
8 | | in a federally designated Foreign Trade Zone or |
9 | | Sub-Zone located in Illinois. No taxpayer that is |
10 | | eligible for the deduction provided in subparagraph |
11 | | (M) of paragraph (2) of this subsection shall be |
12 | | eligible for the deduction provided under this |
13 | | subparagraph (M-1). The subtraction modification |
14 | | available to taxpayers in any year under this |
15 | | subsection shall be that portion of the total interest |
16 | | paid by the borrower with respect to such loan |
17 | | attributable to the eligible property as calculated |
18 | | under the previous sentence; |
19 | | (N) Two times any contribution made during the |
20 | | taxable year to a designated zone organization to the |
21 | | extent that the contribution (i) qualifies as a |
22 | | charitable contribution under subsection (c) of |
23 | | Section 170 of the Internal Revenue Code and (ii) |
24 | | must, by its terms, be used for a project approved by |
25 | | the Department of Commerce and Economic Opportunity |
26 | | under Section 11 of the Illinois Enterprise Zone Act |
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1 | | or under Section 10-10 of the River Edge Redevelopment |
2 | | Zone Act. This subparagraph (N) is exempt from the |
3 | | provisions of Section 250; |
4 | | (O) An amount equal to: (i) 85% for taxable years |
5 | | ending on or before December 31, 1992, or, a |
6 | | percentage equal to the percentage allowable under |
7 | | Section 243(a)(1) of the Internal Revenue Code of 1986 |
8 | | for taxable years ending after December 31, 1992, of |
9 | | the amount by which dividends included in taxable |
10 | | income and received from a corporation that is not |
11 | | created or organized under the laws of the United |
12 | | States or any state or political subdivision thereof, |
13 | | including, for taxable years ending on or after |
14 | | December 31, 1988, dividends received or deemed |
15 | | received or paid or deemed paid under Sections 951 |
16 | | through 965 of the Internal Revenue Code, exceed the |
17 | | amount of the modification provided under subparagraph |
18 | | (G) of paragraph (2) of this subsection (b) which is |
19 | | related to such dividends, and including, for taxable |
20 | | years ending on or after December 31, 2008, dividends |
21 | | received from a captive real estate investment trust; |
22 | | plus (ii) 100% of the amount by which dividends, |
23 | | included in taxable income and received, including, |
24 | | for taxable years ending on or after December 31, |
25 | | 1988, dividends received or deemed received or paid or |
26 | | deemed paid under Sections 951 through 964 of the |
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1 | | Internal Revenue Code and including, for taxable years |
2 | | ending on or after December 31, 2008, dividends |
3 | | received from a captive real estate investment trust, |
4 | | from any such corporation specified in clause (i) that |
5 | | would but for the provisions of Section 1504(b)(3) of |
6 | | the Internal Revenue Code be treated as a member of the |
7 | | affiliated group which includes the dividend |
8 | | recipient, exceed the amount of the modification |
9 | | provided under subparagraph (G) of paragraph (2) of |
10 | | this subsection (b) which is related to such |
11 | | dividends. For taxable years ending on or after June |
12 | | 30, 2021, (i) for purposes of this subparagraph, the |
13 | | term "dividend" does not include any amount treated as |
14 | | a dividend under Section 1248 of the Internal Revenue |
15 | | Code, and (ii) this subparagraph shall not apply to |
16 | | dividends for which a deduction is allowed under |
17 | | Section 245(a) of the Internal Revenue Code. This |
18 | | subparagraph (O) is exempt from the provisions of |
19 | | Section 250 of this Act; |
20 | | (P) An amount equal to any contribution made to a |
21 | | job training project established pursuant to the Tax |
22 | | Increment Allocation Redevelopment Act; |
23 | | (Q) An amount equal to the amount of the deduction |
24 | | used to compute the federal income tax credit for |
25 | | restoration of substantial amounts held under claim of |
26 | | right for the taxable year pursuant to Section 1341 of |
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1 | | the Internal Revenue Code; |
2 | | (R) On and after July 20, 1999, in the case of an |
3 | | attorney-in-fact with respect to whom an interinsurer |
4 | | or a reciprocal insurer has made the election under |
5 | | Section 835 of the Internal Revenue Code, 26 U.S.C. |
6 | | 835, an amount equal to the excess, if any, of the |
7 | | amounts paid or incurred by that interinsurer or |
8 | | reciprocal insurer in the taxable year to the |
9 | | attorney-in-fact over the deduction allowed to that |
10 | | interinsurer or reciprocal insurer with respect to the |
11 | | attorney-in-fact under Section 835(b) of the Internal |
12 | | Revenue Code for the taxable year; the provisions of |
13 | | this subparagraph are exempt from the provisions of |
14 | | Section 250; |
15 | | (S) For taxable years ending on or after December |
16 | | 31, 1997, in the case of a Subchapter S corporation, an |
17 | | amount equal to all amounts of income allocable to a |
18 | | shareholder subject to the Personal Property Tax |
19 | | Replacement Income Tax imposed by subsections (c) and |
20 | | (d) of Section 201 of this Act, including amounts |
21 | | allocable to organizations exempt from federal income |
22 | | tax by reason of Section 501(a) of the Internal |
23 | | Revenue Code. This subparagraph (S) is exempt from the |
24 | | provisions of Section 250; |
25 | | (T) For taxable years 2001 and thereafter, for the |
26 | | taxable year in which the bonus depreciation deduction |
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1 | | is taken on the taxpayer's federal income tax return |
2 | | under subsection (k) of Section 168 of the Internal |
3 | | Revenue Code and for each applicable taxable year |
4 | | thereafter, an amount equal to "x", where: |
5 | | (1) "y" equals the amount of the depreciation |
6 | | deduction taken for the taxable year on the |
7 | | taxpayer's federal income tax return on property |
8 | | for which the bonus depreciation deduction was |
9 | | taken in any year under subsection (k) of Section |
10 | | 168 of the Internal Revenue Code, but not |
11 | | including the bonus depreciation deduction; |
12 | | (2) for taxable years ending on or before |
13 | | December 31, 2005, "x" equals "y" multiplied by 30 |
14 | | and then divided by 70 (or "y" multiplied by |
15 | | 0.429); and |
16 | | (3) for taxable years ending after December |
17 | | 31, 2005: |
18 | | (i) for property on which a bonus |
19 | | depreciation deduction of 30% of the adjusted |
20 | | basis was taken, "x" equals "y" multiplied by |
21 | | 30 and then divided by 70 (or "y" multiplied |
22 | | by 0.429); |
23 | | (ii) for property on which a bonus |
24 | | depreciation deduction of 50% of the adjusted |
25 | | basis was taken, "x" equals "y" multiplied by |
26 | | 1.0; |
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1 | | (iii) for property on which a bonus |
2 | | depreciation deduction of 100% of the adjusted |
3 | | basis was taken in a taxable year ending on or |
4 | | after December 31, 2021, "x" equals the |
5 | | depreciation deduction that would be allowed |
6 | | on that property if the taxpayer had made the |
7 | | election under Section 168(k)(7) of the |
8 | | Internal Revenue Code to not claim bonus |
9 | | depreciation on that property; and |
10 | | (iv) for property on which a bonus |
11 | | depreciation deduction of a percentage other |
12 | | than 30%, 50% or 100% of the adjusted basis |
13 | | was taken in a taxable year ending on or after |
14 | | December 31, 2021, "x" equals "y" multiplied |
15 | | by 100 times the percentage bonus depreciation |
16 | | on the property (that is, 100(bonus%)) and |
17 | | then divided by 100 times 1 minus the |
18 | | percentage bonus depreciation on the property |
19 | | (that is, 100(1-bonus%)). |
20 | | The aggregate amount deducted under this |
21 | | subparagraph in all taxable years for any one piece of |
22 | | property may not exceed the amount of the bonus |
23 | | depreciation deduction taken on that property on the |
24 | | taxpayer's federal income tax return under subsection |
25 | | (k) of Section 168 of the Internal Revenue Code. This |
26 | | subparagraph (T) is exempt from the provisions of |
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1 | | Section 250; |
2 | | (U) If the taxpayer sells, transfers, abandons, or |
3 | | otherwise disposes of property for which the taxpayer |
4 | | was required in any taxable year to make an addition |
5 | | modification under subparagraph (E-10), then an amount |
6 | | equal to that addition modification. |
7 | | If the taxpayer continues to own property through |
8 | | the last day of the last tax year for which a |
9 | | subtraction is allowed with respect to that property |
10 | | under subparagraph (T) and for which the taxpayer was |
11 | | required in any taxable year to make an addition |
12 | | modification under subparagraph (E-10), then an amount |
13 | | equal to that addition modification. |
14 | | The taxpayer is allowed to take the deduction |
15 | | under this subparagraph only once with respect to any |
16 | | one piece of property. |
17 | | This subparagraph (U) is exempt from the |
18 | | provisions of Section 250; |
19 | | (V) The amount of: (i) any interest income (net of |
20 | | the deductions allocable thereto) taken into account |
21 | | for the taxable year with respect to a transaction |
22 | | with a taxpayer that is required to make an addition |
23 | | modification with respect to such transaction under |
24 | | Section 203(a)(2)(D-17), 203(b)(2)(E-12), |
25 | | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed |
26 | | the amount of such addition modification, (ii) any |
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1 | | income from intangible property (net of the deductions |
2 | | allocable thereto) taken into account for the taxable |
3 | | year with respect to a transaction with a taxpayer |
4 | | that is required to make an addition modification with |
5 | | respect to such transaction under Section |
6 | | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or |
7 | | 203(d)(2)(D-8), but not to exceed the amount of such |
8 | | addition modification, and (iii) any insurance premium |
9 | | income (net of deductions allocable thereto) taken |
10 | | into account for the taxable year with respect to a |
11 | | transaction with a taxpayer that is required to make |
12 | | an addition modification with respect to such |
13 | | transaction under Section 203(a)(2)(D-19), Section |
14 | | 203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section |
15 | | 203(d)(2)(D-9), but not to exceed the amount of that |
16 | | addition modification. This subparagraph (V) is exempt |
17 | | from the provisions of Section 250; |
18 | | (W) An amount equal to the interest income taken |
19 | | into account for the taxable year (net of the |
20 | | deductions allocable thereto) with respect to |
21 | | transactions with (i) a foreign person who would be a |
22 | | member of the taxpayer's unitary business group but |
23 | | for the fact that the foreign person's business |
24 | | activity outside the United States is 80% or more of |
25 | | that person's total business activity and (ii) for |
26 | | taxable years ending on or after December 31, 2008, to |
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1 | | a person who would be a member of the same unitary |
2 | | business group but for the fact that the person is |
3 | | prohibited under Section 1501(a)(27) from being |
4 | | included in the unitary business group because he or |
5 | | she is ordinarily required to apportion business |
6 | | income under different subsections of Section 304, but |
7 | | not to exceed the addition modification required to be |
8 | | made for the same taxable year under Section |
9 | | 203(b)(2)(E-12) for interest paid, accrued, or |
10 | | incurred, directly or indirectly, to the same person. |
11 | | This subparagraph (W) is exempt from the provisions of |
12 | | Section 250; |
13 | | (X) An amount equal to the income from intangible |
14 | | property taken into account for the taxable year (net |
15 | | of the deductions allocable thereto) with respect to |
16 | | transactions with (i) a foreign person who would be a |
17 | | member of the taxpayer's unitary business group but |
18 | | for the fact that the foreign person's business |
19 | | activity outside the United States is 80% or more of |
20 | | that person's total business activity and (ii) for |
21 | | taxable years ending on or after December 31, 2008, to |
22 | | a person who would be a member of the same unitary |
23 | | business group but for the fact that the person is |
24 | | prohibited under Section 1501(a)(27) from being |
25 | | included in the unitary business group because he or |
26 | | she is ordinarily required to apportion business |
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1 | | income under different subsections of Section 304, but |
2 | | not to exceed the addition modification required to be |
3 | | made for the same taxable year under Section |
4 | | 203(b)(2)(E-13) for intangible expenses and costs |
5 | | paid, accrued, or incurred, directly or indirectly, to |
6 | | the same foreign person. This subparagraph (X) is |
7 | | exempt from the provisions of Section 250; |
8 | | (Y) For taxable years ending on or after December |
9 | | 31, 2011, in the case of a taxpayer who was required to |
10 | | add back any insurance premiums under Section |
11 | | 203(b)(2)(E-14), such taxpayer may elect to subtract |
12 | | that part of a reimbursement received from the |
13 | | insurance company equal to the amount of the expense |
14 | | or loss (including expenses incurred by the insurance |
15 | | company) that would have been taken into account as a |
16 | | deduction for federal income tax purposes if the |
17 | | expense or loss had been uninsured. If a taxpayer |
18 | | makes the election provided for by this subparagraph |
19 | | (Y), the insurer to which the premiums were paid must |
20 | | add back to income the amount subtracted by the |
21 | | taxpayer pursuant to this subparagraph (Y). This |
22 | | subparagraph (Y) is exempt from the provisions of |
23 | | Section 250; |
24 | | (Z) The difference between the nondeductible |
25 | | controlled foreign corporation dividends under Section |
26 | | 965(e)(3) of the Internal Revenue Code over the |
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1 | | taxable income of the taxpayer, computed without |
2 | | regard to Section 965(e)(2)(A) of the Internal Revenue |
3 | | Code, and without regard to any net operating loss |
4 | | deduction. This subparagraph (Z) is exempt from the |
5 | | provisions of Section 250; and |
6 | | (AA) For taxable years beginning on or after |
7 | | January 1, 2023, for any cannabis establishment |
8 | | operating in this State and licensed under the |
9 | | Cannabis Regulation and Tax Act or any cannabis |
10 | | cultivation center or medical cannabis dispensing |
11 | | organization operating in this State and licensed |
12 | | under the Compassionate Use of Medical Cannabis |
13 | | Program Act, an amount equal to the deductions that |
14 | | were disallowed under Section 280E of the Internal |
15 | | Revenue Code for the taxable year and that would not be |
16 | | added back under this subsection. The provisions of |
17 | | this subparagraph (AA) are exempt from the provisions |
18 | | of Section 250. |
19 | | (3) Special rule. For purposes of paragraph (2)(A), |
20 | | "gross income" in the case of a life insurance company, |
21 | | for tax years ending on and after December 31, 1994, and |
22 | | prior to December 31, 2011, shall mean the gross |
23 | | investment income for the taxable year and, for tax years |
24 | | ending on or after December 31, 2011, shall mean all |
25 | | amounts included in life insurance gross income under |
26 | | Section 803(a)(3) of the Internal Revenue Code. |
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1 | | (c) Trusts and estates. |
2 | | (1) In general. In the case of a trust or estate, base |
3 | | income means an amount equal to the taxpayer's taxable |
4 | | income for the taxable year as modified by paragraph (2). |
5 | | (2) Modifications. Subject to the provisions of |
6 | | paragraph (3), the taxable income referred to in paragraph |
7 | | (1) shall be modified by adding thereto the sum of the |
8 | | following amounts: |
9 | | (A) An amount equal to all amounts paid or accrued |
10 | | to the taxpayer as interest or dividends during the |
11 | | taxable year to the extent excluded from gross income |
12 | | in the computation of taxable income; |
13 | | (B) In the case of (i) an estate, $600; (ii) a |
14 | | trust which, under its governing instrument, is |
15 | | required to distribute all of its income currently, |
16 | | $300; and (iii) any other trust, $100, but in each such |
17 | | case, only to the extent such amount was deducted in |
18 | | the computation of taxable income; |
19 | | (C) An amount equal to the amount of tax imposed by |
20 | | this Act to the extent deducted from gross income in |
21 | | the computation of taxable income for the taxable |
22 | | year; |
23 | | (D) The amount of any net operating loss deduction |
24 | | taken in arriving at taxable income, other than a net |
25 | | operating loss carried forward from a taxable year |
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1 | | ending prior to December 31, 1986; |
2 | | (E) For taxable years in which a net operating |
3 | | loss carryback or carryforward from a taxable year |
4 | | ending prior to December 31, 1986 is an element of |
5 | | taxable income under paragraph (1) of subsection (e) |
6 | | or subparagraph (E) of paragraph (2) of subsection |
7 | | (e), the amount by which addition modifications other |
8 | | than those provided by this subparagraph (E) exceeded |
9 | | subtraction modifications in such taxable year, with |
10 | | the following limitations applied in the order that |
11 | | they are listed: |
12 | | (i) the addition modification relating to the |
13 | | net operating loss carried back or forward to the |
14 | | taxable year from any taxable year ending prior to |
15 | | December 31, 1986 shall be reduced by the amount |
16 | | of addition modification under this subparagraph |
17 | | (E) which related to that net operating loss and |
18 | | which was taken into account in calculating the |
19 | | base income of an earlier taxable year, and |
20 | | (ii) the addition modification relating to the |
21 | | net operating loss carried back or forward to the |
22 | | taxable year from any taxable year ending prior to |
23 | | December 31, 1986 shall not exceed the amount of |
24 | | such carryback or carryforward; |
25 | | For taxable years in which there is a net |
26 | | operating loss carryback or carryforward from more |
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1 | | than one other taxable year ending prior to December |
2 | | 31, 1986, the addition modification provided in this |
3 | | subparagraph (E) shall be the sum of the amounts |
4 | | computed independently under the preceding provisions |
5 | | of this subparagraph (E) for each such taxable year; |
6 | | (F) For taxable years ending on or after January |
7 | | 1, 1989, an amount equal to the tax deducted pursuant |
8 | | to Section 164 of the Internal Revenue Code if the |
9 | | trust or estate is claiming the same tax for purposes |
10 | | of the Illinois foreign tax credit under Section 601 |
11 | | of this Act; |
12 | | (G) An amount equal to the amount of the capital |
13 | | gain deduction allowable under the Internal Revenue |
14 | | Code, to the extent deducted from gross income in the |
15 | | computation of taxable income; |
16 | | (G-5) For taxable years ending after December 31, |
17 | | 1997, an amount equal to any eligible remediation |
18 | | costs that the trust or estate deducted in computing |
19 | | adjusted gross income and for which the trust or |
20 | | estate claims a credit under subsection (l) of Section |
21 | | 201; |
22 | | (G-10) For taxable years 2001 and thereafter, an |
23 | | amount equal to the bonus depreciation deduction taken |
24 | | on the taxpayer's federal income tax return for the |
25 | | taxable year under subsection (k) of Section 168 of |
26 | | the Internal Revenue Code; and |
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1 | | (G-11) If the taxpayer sells, transfers, abandons, |
2 | | or otherwise disposes of property for which the |
3 | | taxpayer was required in any taxable year to make an |
4 | | addition modification under subparagraph (G-10), then |
5 | | an amount equal to the aggregate amount of the |
6 | | deductions taken in all taxable years under |
7 | | subparagraph (R) with respect to that property. |
8 | | If the taxpayer continues to own property through |
9 | | the last day of the last tax year for which a |
10 | | subtraction is allowed with respect to that property |
11 | | under subparagraph (R) and for which the taxpayer was |
12 | | allowed in any taxable year to make a subtraction |
13 | | modification under subparagraph (R), then an amount |
14 | | equal to that subtraction modification. |
15 | | The taxpayer is required to make the addition |
16 | | modification under this subparagraph only once with |
17 | | respect to any one piece of property; |
18 | | (G-12) An amount equal to the amount otherwise |
19 | | allowed as a deduction in computing base income for |
20 | | interest paid, accrued, or incurred, directly or |
21 | | indirectly, (i) for taxable years ending on or after |
22 | | December 31, 2004, to a foreign person who would be a |
23 | | member of the same unitary business group but for the |
24 | | fact that the foreign person's business activity |
25 | | outside the United States is 80% or more of the foreign |
26 | | person's total business activity and (ii) for taxable |
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1 | | years ending on or after December 31, 2008, to a person |
2 | | who would be a member of the same unitary business |
3 | | group but for the fact that the person is prohibited |
4 | | under Section 1501(a)(27) from being included in the |
5 | | unitary business group because he or she is ordinarily |
6 | | required to apportion business income under different |
7 | | subsections of Section 304. The addition modification |
8 | | required by this subparagraph shall be reduced to the |
9 | | extent that dividends were included in base income of |
10 | | the unitary group for the same taxable year and |
11 | | received by the taxpayer or by a member of the |
12 | | taxpayer's unitary business group (including amounts |
13 | | included in gross income pursuant to Sections 951 |
14 | | through 964 of the Internal Revenue Code and amounts |
15 | | included in gross income under Section 78 of the |
16 | | Internal Revenue Code) with respect to the stock of |
17 | | the same person to whom the interest was paid, |
18 | | accrued, or incurred. |
19 | | This paragraph shall not apply to the following: |
20 | | (i) an item of interest paid, accrued, or |
21 | | incurred, directly or indirectly, to a person who |
22 | | is subject in a foreign country or state, other |
23 | | than a state which requires mandatory unitary |
24 | | reporting, to a tax on or measured by net income |
25 | | with respect to such interest; or |
26 | | (ii) an item of interest paid, accrued, or |
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1 | | incurred, directly or indirectly, to a person if |
2 | | the taxpayer can establish, based on a |
3 | | preponderance of the evidence, both of the |
4 | | following: |
5 | | (a) the person, during the same taxable |
6 | | year, paid, accrued, or incurred, the interest |
7 | | to a person that is not a related member, and |
8 | | (b) the transaction giving rise to the |
9 | | interest expense between the taxpayer and the |
10 | | person did not have as a principal purpose the |
11 | | avoidance of Illinois income tax, and is paid |
12 | | pursuant to a contract or agreement that |
13 | | reflects an arm's-length interest rate and |
14 | | terms; or |
15 | | (iii) the taxpayer can establish, based on |
16 | | clear and convincing evidence, that the interest |
17 | | paid, accrued, or incurred relates to a contract |
18 | | or agreement entered into at arm's-length rates |
19 | | and terms and the principal purpose for the |
20 | | payment is not federal or Illinois tax avoidance; |
21 | | or |
22 | | (iv) an item of interest paid, accrued, or |
23 | | incurred, directly or indirectly, to a person if |
24 | | the taxpayer establishes by clear and convincing |
25 | | evidence that the adjustments are unreasonable; or |
26 | | if the taxpayer and the Director agree in writing |
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1 | | to the application or use of an alternative method |
2 | | of apportionment under Section 304(f). |
3 | | Nothing in this subsection shall preclude the |
4 | | Director from making any other adjustment |
5 | | otherwise allowed under Section 404 of this Act |
6 | | for any tax year beginning after the effective |
7 | | date of this amendment provided such adjustment is |
8 | | made pursuant to regulation adopted by the |
9 | | Department and such regulations provide methods |
10 | | and standards by which the Department will utilize |
11 | | its authority under Section 404 of this Act; |
12 | | (G-13) An amount equal to the amount of intangible |
13 | | expenses and costs otherwise allowed as a deduction in |
14 | | computing base income, and that were paid, accrued, or |
15 | | incurred, directly or indirectly, (i) for taxable |
16 | | years ending on or after December 31, 2004, to a |
17 | | foreign person who would be a member of the same |
18 | | unitary business group but for the fact that the |
19 | | foreign person's business activity outside the United |
20 | | States is 80% or more of that person's total business |
21 | | activity and (ii) for taxable years ending on or after |
22 | | December 31, 2008, to a person who would be a member of |
23 | | the same unitary business group but for the fact that |
24 | | the person is prohibited under Section 1501(a)(27) |
25 | | from being included in the unitary business group |
26 | | because he or she is ordinarily required to apportion |
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1 | | business income under different subsections of Section |
2 | | 304. The addition modification required by this |
3 | | subparagraph shall be reduced to the extent that |
4 | | dividends were included in base income of the unitary |
5 | | group for the same taxable year and received by the |
6 | | taxpayer or by a member of the taxpayer's unitary |
7 | | business group (including amounts included in gross |
8 | | income pursuant to Sections 951 through 964 of the |
9 | | Internal Revenue Code and amounts included in gross |
10 | | income under Section 78 of the Internal Revenue Code) |
11 | | with respect to the stock of the same person to whom |
12 | | the intangible expenses and costs were directly or |
13 | | indirectly paid, incurred, or accrued. The preceding |
14 | | sentence shall not apply to the extent that the same |
15 | | dividends caused a reduction to the addition |
16 | | modification required under Section 203(c)(2)(G-12) of |
17 | | this Act. As used in this subparagraph, the term |
18 | | "intangible expenses and costs" includes: (1) |
19 | | expenses, losses, and costs for or related to the |
20 | | direct or indirect acquisition, use, maintenance or |
21 | | management, ownership, sale, exchange, or any other |
22 | | disposition of intangible property; (2) losses |
23 | | incurred, directly or indirectly, from factoring |
24 | | transactions or discounting transactions; (3) royalty, |
25 | | patent, technical, and copyright fees; (4) licensing |
26 | | fees; and (5) other similar expenses and costs. For |
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1 | | purposes of this subparagraph, "intangible property" |
2 | | includes patents, patent applications, trade names, |
3 | | trademarks, service marks, copyrights, mask works, |
4 | | trade secrets, and similar types of intangible assets. |
5 | | This paragraph shall not apply to the following: |
6 | | (i) any item of intangible expenses or costs |
7 | | paid, accrued, or incurred, directly or |
8 | | indirectly, from a transaction with a person who |
9 | | is subject in a foreign country or state, other |
10 | | than a state which requires mandatory unitary |
11 | | reporting, to a tax on or measured by net income |
12 | | with respect to such item; or |
13 | | (ii) any item of intangible expense or cost |
14 | | paid, accrued, or incurred, directly or |
15 | | indirectly, if the taxpayer can establish, based |
16 | | on a preponderance of the evidence, both of the |
17 | | following: |
18 | | (a) the person during the same taxable |
19 | | year paid, accrued, or incurred, the |
20 | | intangible expense or cost to a person that is |
21 | | not a related member, and |
22 | | (b) the transaction giving rise to the |
23 | | intangible expense or cost between the |
24 | | taxpayer and the person did not have as a |
25 | | principal purpose the avoidance of Illinois |
26 | | income tax, and is paid pursuant to a contract |
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1 | | or agreement that reflects arm's-length terms; |
2 | | or |
3 | | (iii) any item of intangible expense or cost |
4 | | paid, accrued, or incurred, directly or |
5 | | indirectly, from a transaction with a person if |
6 | | the taxpayer establishes by clear and convincing |
7 | | evidence, that the adjustments are unreasonable; |
8 | | or if the taxpayer and the Director agree in |
9 | | writing to the application or use of an |
10 | | alternative method of apportionment under Section |
11 | | 304(f); |
12 | | Nothing in this subsection shall preclude the |
13 | | Director from making any other adjustment |
14 | | otherwise allowed under Section 404 of this Act |
15 | | for any tax year beginning after the effective |
16 | | date of this amendment provided such adjustment is |
17 | | made pursuant to regulation adopted by the |
18 | | Department and such regulations provide methods |
19 | | and standards by which the Department will utilize |
20 | | its authority under Section 404 of this Act; |
21 | | (G-14) For taxable years ending on or after |
22 | | December 31, 2008, an amount equal to the amount of |
23 | | insurance premium expenses and costs otherwise allowed |
24 | | as a deduction in computing base income, and that were |
25 | | paid, accrued, or incurred, directly or indirectly, to |
26 | | a person who would be a member of the same unitary |
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1 | | business group but for the fact that the person is |
2 | | prohibited under Section 1501(a)(27) from being |
3 | | included in the unitary business group because he or |
4 | | she is ordinarily required to apportion business |
5 | | income under different subsections of Section 304. The |
6 | | addition modification required by this subparagraph |
7 | | shall be reduced to the extent that dividends were |
8 | | included in base income of the unitary group for the |
9 | | same taxable year and received by the taxpayer or by a |
10 | | member of the taxpayer's unitary business group |
11 | | (including amounts included in gross income under |
12 | | Sections 951 through 964 of the Internal Revenue Code |
13 | | and amounts included in gross income under Section 78 |
14 | | of the Internal Revenue Code) with respect to the |
15 | | stock of the same person to whom the premiums and costs |
16 | | were directly or indirectly paid, incurred, or |
17 | | accrued. The preceding sentence does not apply to the |
18 | | extent that the same dividends caused a reduction to |
19 | | the addition modification required under Section |
20 | | 203(c)(2)(G-12) or Section 203(c)(2)(G-13) of this |
21 | | Act; |
22 | | (G-15) An amount equal to the credit allowable to |
23 | | the taxpayer under Section 218(a) of this Act, |
24 | | determined without regard to Section 218(c) of this |
25 | | Act; |
26 | | (G-16) For taxable years ending on or after |
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1 | | December 31, 2017, an amount equal to the deduction |
2 | | allowed under Section 199 of the Internal Revenue Code |
3 | | for the taxable year; |
4 | | and by deducting from the total so obtained the sum of the |
5 | | following amounts: |
6 | | (H) An amount equal to all amounts included in |
7 | | such total pursuant to the provisions of Sections |
8 | | 402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and 408 |
9 | | of the Internal Revenue Code or included in such total |
10 | | as distributions under the provisions of any |
11 | | retirement or disability plan for employees of any |
12 | | governmental agency or unit, or retirement payments to |
13 | | retired partners, which payments are excluded in |
14 | | computing net earnings from self employment by Section |
15 | | 1402 of the Internal Revenue Code and regulations |
16 | | adopted pursuant thereto; |
17 | | (I) The valuation limitation amount; |
18 | | (J) An amount equal to the amount of any tax |
19 | | imposed by this Act which was refunded to the taxpayer |
20 | | and included in such total for the taxable year; |
21 | | (K) An amount equal to all amounts included in |
22 | | taxable income as modified by subparagraphs (A), (B), |
23 | | (C), (D), (E), (F) and (G) which are exempt from |
24 | | taxation by this State either by reason of its |
25 | | statutes or Constitution or by reason of the |
26 | | Constitution, treaties or statutes of the United |
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1 | | States; provided that, in the case of any statute of |
2 | | this State that exempts income derived from bonds or |
3 | | other obligations from the tax imposed under this Act, |
4 | | the amount exempted shall be the interest net of bond |
5 | | premium amortization; |
6 | | (L) With the exception of any amounts subtracted |
7 | | under subparagraph (K), an amount equal to the sum of |
8 | | all amounts disallowed as deductions by (i) Sections |
9 | | 171(a)(2) and 265(a)(2) of the Internal Revenue Code, |
10 | | and all amounts of expenses allocable to interest and |
11 | | disallowed as deductions by Section 265(a)(1) of the |
12 | | Internal Revenue Code; and (ii) for taxable years |
13 | | ending on or after August 13, 1999, Sections |
14 | | 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the |
15 | | Internal Revenue Code, plus, (iii) for taxable years |
16 | | ending on or after December 31, 2011, Section |
17 | | 45G(e)(3) of the Internal Revenue Code and, for |
18 | | taxable years ending on or after December 31, 2008, |
19 | | any amount included in gross income under Section 87 |
20 | | of the Internal Revenue Code; the provisions of this |
21 | | subparagraph are exempt from the provisions of Section |
22 | | 250; |
23 | | (M) An amount equal to those dividends included in |
24 | | such total which were paid by a corporation which |
25 | | conducts business operations in a River Edge |
26 | | Redevelopment Zone or zones created under the River |
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1 | | Edge Redevelopment Zone Act and conducts substantially |
2 | | all of its operations in a River Edge Redevelopment |
3 | | Zone or zones. This subparagraph (M) is exempt from |
4 | | the provisions of Section 250; |
5 | | (N) An amount equal to any contribution made to a |
6 | | job training project established pursuant to the Tax |
7 | | Increment Allocation Redevelopment Act; |
8 | | (O) An amount equal to those dividends included in |
9 | | such total that were paid by a corporation that |
10 | | conducts business operations in a federally designated |
11 | | Foreign Trade Zone or Sub-Zone and that is designated |
12 | | a High Impact Business located in Illinois; provided |
13 | | that dividends eligible for the deduction provided in |
14 | | subparagraph (M) of paragraph (2) of this subsection |
15 | | shall not be eligible for the deduction provided under |
16 | | this subparagraph (O); |
17 | | (P) An amount equal to the amount of the deduction |
18 | | used to compute the federal income tax credit for |
19 | | restoration of substantial amounts held under claim of |
20 | | right for the taxable year pursuant to Section 1341 of |
21 | | the Internal Revenue Code; |
22 | | (Q) For taxable year 1999 and thereafter, an |
23 | | amount equal to the amount of any (i) distributions, |
24 | | to the extent includible in gross income for federal |
25 | | income tax purposes, made to the taxpayer because of |
26 | | his or her status as a victim of persecution for racial |
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1 | | or religious reasons by Nazi Germany or any other Axis |
2 | | regime or as an heir of the victim and (ii) items of |
3 | | income, to the extent includible in gross income for |
4 | | federal income tax purposes, attributable to, derived |
5 | | from or in any way related to assets stolen from, |
6 | | hidden from, or otherwise lost to a victim of |
7 | | persecution for racial or religious reasons by Nazi |
8 | | Germany or any other Axis regime immediately prior to, |
9 | | during, and immediately after World War II, including, |
10 | | but not limited to, interest on the proceeds |
11 | | receivable as insurance under policies issued to a |
12 | | victim of persecution for racial or religious reasons |
13 | | by Nazi Germany or any other Axis regime by European |
14 | | insurance companies immediately prior to and during |
15 | | World War II; provided, however, this subtraction from |
16 | | federal adjusted gross income does not apply to assets |
17 | | acquired with such assets or with the proceeds from |
18 | | the sale of such assets; provided, further, this |
19 | | paragraph shall only apply to a taxpayer who was the |
20 | | first recipient of such assets after their recovery |
21 | | and who is a victim of persecution for racial or |
22 | | religious reasons by Nazi Germany or any other Axis |
23 | | regime or as an heir of the victim. The amount of and |
24 | | the eligibility for any public assistance, benefit, or |
25 | | similar entitlement is not affected by the inclusion |
26 | | of items (i) and (ii) of this paragraph in gross income |
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1 | | for federal income tax purposes. This paragraph is |
2 | | exempt from the provisions of Section 250; |
3 | | (R) For taxable years 2001 and thereafter, for the |
4 | | taxable year in which the bonus depreciation deduction |
5 | | is taken on the taxpayer's federal income tax return |
6 | | under subsection (k) of Section 168 of the Internal |
7 | | Revenue Code and for each applicable taxable year |
8 | | thereafter, an amount equal to "x", where: |
9 | | (1) "y" equals the amount of the depreciation |
10 | | deduction taken for the taxable year on the |
11 | | taxpayer's federal income tax return on property |
12 | | for which the bonus depreciation deduction was |
13 | | taken in any year under subsection (k) of Section |
14 | | 168 of the Internal Revenue Code, but not |
15 | | including the bonus depreciation deduction; |
16 | | (2) for taxable years ending on or before |
17 | | December 31, 2005, "x" equals "y" multiplied by 30 |
18 | | and then divided by 70 (or "y" multiplied by |
19 | | 0.429); and |
20 | | (3) for taxable years ending after December |
21 | | 31, 2005: |
22 | | (i) for property on which a bonus |
23 | | depreciation deduction of 30% of the adjusted |
24 | | basis was taken, "x" equals "y" multiplied by |
25 | | 30 and then divided by 70 (or "y" multiplied |
26 | | by 0.429); |
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1 | | (ii) for property on which a bonus |
2 | | depreciation deduction of 50% of the adjusted |
3 | | basis was taken, "x" equals "y" multiplied by |
4 | | 1.0; |
5 | | (iii) for property on which a bonus |
6 | | depreciation deduction of 100% of the adjusted |
7 | | basis was taken in a taxable year ending on or |
8 | | after December 31, 2021, "x" equals the |
9 | | depreciation deduction that would be allowed |
10 | | on that property if the taxpayer had made the |
11 | | election under Section 168(k)(7) of the |
12 | | Internal Revenue Code to not claim bonus |
13 | | depreciation on that property; and |
14 | | (iv) for property on which a bonus |
15 | | depreciation deduction of a percentage other |
16 | | than 30%, 50% or 100% of the adjusted basis |
17 | | was taken in a taxable year ending on or after |
18 | | December 31, 2021, "x" equals "y" multiplied |
19 | | by 100 times the percentage bonus depreciation |
20 | | on the property (that is, 100(bonus%)) and |
21 | | then divided by 100 times 1 minus the |
22 | | percentage bonus depreciation on the property |
23 | | (that is, 100(1-bonus%)). |
24 | | The aggregate amount deducted under this |
25 | | subparagraph in all taxable years for any one piece of |
26 | | property may not exceed the amount of the bonus |
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1 | | depreciation deduction taken on that property on the |
2 | | taxpayer's federal income tax return under subsection |
3 | | (k) of Section 168 of the Internal Revenue Code. This |
4 | | subparagraph (R) is exempt from the provisions of |
5 | | Section 250; |
6 | | (S) If the taxpayer sells, transfers, abandons, or |
7 | | otherwise disposes of property for which the taxpayer |
8 | | was required in any taxable year to make an addition |
9 | | modification under subparagraph (G-10), then an amount |
10 | | equal to that addition modification. |
11 | | If the taxpayer continues to own property through |
12 | | the last day of the last tax year for which a |
13 | | subtraction is allowed with respect to that property |
14 | | under subparagraph (R) and for which the taxpayer was |
15 | | required in any taxable year to make an addition |
16 | | modification under subparagraph (G-10), then an amount |
17 | | equal to that addition modification. |
18 | | The taxpayer is allowed to take the deduction |
19 | | under this subparagraph only once with respect to any |
20 | | one piece of property. |
21 | | This subparagraph (S) is exempt from the |
22 | | provisions of Section 250; |
23 | | (T) The amount of (i) any interest income (net of |
24 | | the deductions allocable thereto) taken into account |
25 | | for the taxable year with respect to a transaction |
26 | | with a taxpayer that is required to make an addition |
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1 | | modification with respect to such transaction under |
2 | | Section 203(a)(2)(D-17), 203(b)(2)(E-12), |
3 | | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed |
4 | | the amount of such addition modification and (ii) any |
5 | | income from intangible property (net of the deductions |
6 | | allocable thereto) taken into account for the taxable |
7 | | year with respect to a transaction with a taxpayer |
8 | | that is required to make an addition modification with |
9 | | respect to such transaction under Section |
10 | | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or |
11 | | 203(d)(2)(D-8), but not to exceed the amount of such |
12 | | addition modification. This subparagraph (T) is exempt |
13 | | from the provisions of Section 250; |
14 | | (U) An amount equal to the interest income taken |
15 | | into account for the taxable year (net of the |
16 | | deductions allocable thereto) with respect to |
17 | | transactions with (i) a foreign person who would be a |
18 | | member of the taxpayer's unitary business group but |
19 | | for the fact the foreign person's business activity |
20 | | outside the United States is 80% or more of that |
21 | | person's total business activity and (ii) for taxable |
22 | | years ending on or after December 31, 2008, to a person |
23 | | who would be a member of the same unitary business |
24 | | group but for the fact that the person is prohibited |
25 | | under Section 1501(a)(27) from being included in the |
26 | | unitary business group because he or she is ordinarily |
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1 | | required to apportion business income under different |
2 | | subsections of Section 304, but not to exceed the |
3 | | addition modification required to be made for the same |
4 | | taxable year under Section 203(c)(2)(G-12) for |
5 | | interest paid, accrued, or incurred, directly or |
6 | | indirectly, to the same person. This subparagraph (U) |
7 | | is exempt from the provisions of Section 250; |
8 | | (V) An amount equal to the income from intangible |
9 | | property taken into account for the taxable year (net |
10 | | of the deductions allocable thereto) with respect to |
11 | | transactions with (i) a foreign person who would be a |
12 | | member of the taxpayer's unitary business group but |
13 | | for the fact that the foreign person's business |
14 | | activity outside the United States is 80% or more of |
15 | | that person's total business activity and (ii) for |
16 | | taxable years ending on or after December 31, 2008, to |
17 | | a person who would be a member of the same unitary |
18 | | business group but for the fact that the person is |
19 | | prohibited under Section 1501(a)(27) from being |
20 | | included in the unitary business group because he or |
21 | | she is ordinarily required to apportion business |
22 | | income under different subsections of Section 304, but |
23 | | not to exceed the addition modification required to be |
24 | | made for the same taxable year under Section |
25 | | 203(c)(2)(G-13) for intangible expenses and costs |
26 | | paid, accrued, or incurred, directly or indirectly, to |
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1 | | the same foreign person. This subparagraph (V) is |
2 | | exempt from the provisions of Section 250; |
3 | | (W) in the case of an estate, an amount equal to |
4 | | all amounts included in such total pursuant to the |
5 | | provisions of Section 111 of the Internal Revenue Code |
6 | | as a recovery of items previously deducted by the |
7 | | decedent from adjusted gross income in the computation |
8 | | of taxable income. This subparagraph (W) is exempt |
9 | | from Section 250; |
10 | | (X) an amount equal to the refund included in such |
11 | | total of any tax deducted for federal income tax |
12 | | purposes, to the extent that deduction was added back |
13 | | under subparagraph (F). This subparagraph (X) is |
14 | | exempt from the provisions of Section 250; |
15 | | (Y) For taxable years ending on or after December |
16 | | 31, 2011, in the case of a taxpayer who was required to |
17 | | add back any insurance premiums under Section |
18 | | 203(c)(2)(G-14), such taxpayer may elect to subtract |
19 | | that part of a reimbursement received from the |
20 | | insurance company equal to the amount of the expense |
21 | | or loss (including expenses incurred by the insurance |
22 | | company) that would have been taken into account as a |
23 | | deduction for federal income tax purposes if the |
24 | | expense or loss had been uninsured. If a taxpayer |
25 | | makes the election provided for by this subparagraph |
26 | | (Y), the insurer to which the premiums were paid must |
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1 | | add back to income the amount subtracted by the |
2 | | taxpayer pursuant to this subparagraph (Y). This |
3 | | subparagraph (Y) is exempt from the provisions of |
4 | | Section 250; |
5 | | (Z) For taxable years beginning after December 31, |
6 | | 2018 and before January 1, 2026, the amount of excess |
7 | | business loss of the taxpayer disallowed as a |
8 | | deduction by Section 461(l)(1)(B) of the Internal |
9 | | Revenue Code; and |
10 | | (AA) For taxable years beginning on or after |
11 | | January 1, 2023, for any cannabis establishment |
12 | | operating in this State and licensed under the |
13 | | Cannabis Regulation and Tax Act or any cannabis |
14 | | cultivation center or medical cannabis dispensing |
15 | | organization operating in this State and licensed |
16 | | under the Compassionate Use of Medical Cannabis |
17 | | Program Act, an amount equal to the deductions that |
18 | | were disallowed under Section 280E of the Internal |
19 | | Revenue Code for the taxable year and that would not be |
20 | | added back under this subsection. The provisions of |
21 | | this subparagraph (AA) are exempt from the provisions |
22 | | of Section 250. |
23 | | (3) Limitation. The amount of any modification |
24 | | otherwise required under this subsection shall, under |
25 | | regulations prescribed by the Department, be adjusted by |
26 | | any amounts included therein which were properly paid, |
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1 | | credited, or required to be distributed, or permanently |
2 | | set aside for charitable purposes pursuant to Internal |
3 | | Revenue Code Section 642(c) during the taxable year. |
4 | | (d) Partnerships. |
5 | | (1) In general. In the case of a partnership, base |
6 | | income means an amount equal to the taxpayer's taxable |
7 | | income for the taxable year as modified by paragraph (2). |
8 | | (2) Modifications. The taxable income referred to in |
9 | | paragraph (1) shall be modified by adding thereto the sum |
10 | | of the following amounts: |
11 | | (A) An amount equal to all amounts paid or accrued |
12 | | to the taxpayer as interest or dividends during the |
13 | | taxable year to the extent excluded from gross income |
14 | | in the computation of taxable income; |
15 | | (B) An amount equal to the amount of tax imposed by |
16 | | this Act to the extent deducted from gross income for |
17 | | the taxable year; |
18 | | (C) The amount of deductions allowed to the |
19 | | partnership pursuant to Section 707 (c) of the |
20 | | Internal Revenue Code in calculating its taxable |
21 | | income; |
22 | | (D) An amount equal to the amount of the capital |
23 | | gain deduction allowable under the Internal Revenue |
24 | | Code, to the extent deducted from gross income in the |
25 | | computation of taxable income; |
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1 | | (D-5) For taxable years 2001 and thereafter, an |
2 | | amount equal to the bonus depreciation deduction taken |
3 | | on the taxpayer's federal income tax return for the |
4 | | taxable year under subsection (k) of Section 168 of |
5 | | the Internal Revenue Code; |
6 | | (D-6) If the taxpayer sells, transfers, abandons, |
7 | | or otherwise disposes of property for which the |
8 | | taxpayer was required in any taxable year to make an |
9 | | addition modification under subparagraph (D-5), then |
10 | | an amount equal to the aggregate amount of the |
11 | | deductions taken in all taxable years under |
12 | | subparagraph (O) with respect to that property. |
13 | | If the taxpayer continues to own property through |
14 | | the last day of the last tax year for which a |
15 | | subtraction is allowed with respect to that property |
16 | | under subparagraph (O) and for which the taxpayer was |
17 | | allowed in any taxable year to make a subtraction |
18 | | modification under subparagraph (O), then an amount |
19 | | equal to that subtraction modification. |
20 | | The taxpayer is required to make the addition |
21 | | modification under this subparagraph only once with |
22 | | respect to any one piece of property; |
23 | | (D-7) An amount equal to the amount otherwise |
24 | | allowed as a deduction in computing base income for |
25 | | interest paid, accrued, or incurred, directly or |
26 | | indirectly, (i) for taxable years ending on or after |
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1 | | December 31, 2004, to a foreign person who would be a |
2 | | member of the same unitary business group but for the |
3 | | fact the foreign person's business activity outside |
4 | | the United States is 80% or more of the foreign |
5 | | person's total business activity and (ii) for taxable |
6 | | years ending on or after December 31, 2008, to a person |
7 | | who would be a member of the same unitary business |
8 | | group but for the fact that the person is prohibited |
9 | | under Section 1501(a)(27) from being included in the |
10 | | unitary business group because he or she is ordinarily |
11 | | required to apportion business income under different |
12 | | subsections of Section 304. The addition modification |
13 | | required by this subparagraph shall be reduced to the |
14 | | extent that dividends were included in base income of |
15 | | the unitary group for the same taxable year and |
16 | | received by the taxpayer or by a member of the |
17 | | taxpayer's unitary business group (including amounts |
18 | | included in gross income pursuant to Sections 951 |
19 | | through 964 of the Internal Revenue Code and amounts |
20 | | included in gross income under Section 78 of the |
21 | | Internal Revenue Code) with respect to the stock of |
22 | | the same person to whom the interest was paid, |
23 | | accrued, or incurred. |
24 | | This paragraph shall not apply to the following: |
25 | | (i) an item of interest paid, accrued, or |
26 | | incurred, directly or indirectly, to a person who |
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1 | | is subject in a foreign country or state, other |
2 | | than a state which requires mandatory unitary |
3 | | reporting, to a tax on or measured by net income |
4 | | with respect to such interest; or |
5 | | (ii) an item of interest paid, accrued, or |
6 | | incurred, directly or indirectly, to a person if |
7 | | the taxpayer can establish, based on a |
8 | | preponderance of the evidence, both of the |
9 | | following: |
10 | | (a) the person, during the same taxable |
11 | | year, paid, accrued, or incurred, the interest |
12 | | to a person that is not a related member, and |
13 | | (b) the transaction giving rise to the |
14 | | interest expense between the taxpayer and the |
15 | | person did not have as a principal purpose the |
16 | | avoidance of Illinois income tax, and is paid |
17 | | pursuant to a contract or agreement that |
18 | | reflects an arm's-length interest rate and |
19 | | terms; or |
20 | | (iii) the taxpayer can establish, based on |
21 | | clear and convincing evidence, that the interest |
22 | | paid, accrued, or incurred relates to a contract |
23 | | or agreement entered into at arm's-length rates |
24 | | and terms and the principal purpose for the |
25 | | payment is not federal or Illinois tax avoidance; |
26 | | or |
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1 | | (iv) an item of interest paid, accrued, or |
2 | | incurred, directly or indirectly, to a person if |
3 | | the taxpayer establishes by clear and convincing |
4 | | evidence that the adjustments are unreasonable; or |
5 | | if the taxpayer and the Director agree in writing |
6 | | to the application or use of an alternative method |
7 | | of apportionment under Section 304(f). |
8 | | Nothing in this subsection shall preclude the |
9 | | Director from making any other adjustment |
10 | | otherwise allowed under Section 404 of this Act |
11 | | for any tax year beginning after the effective |
12 | | date of this amendment provided such adjustment is |
13 | | made pursuant to regulation adopted by the |
14 | | Department and such regulations provide methods |
15 | | and standards by which the Department will utilize |
16 | | its authority under Section 404 of this Act; and |
17 | | (D-8) An amount equal to the amount of intangible |
18 | | expenses and costs otherwise allowed as a deduction in |
19 | | computing base income, and that were paid, accrued, or |
20 | | incurred, directly or indirectly, (i) for taxable |
21 | | years ending on or after December 31, 2004, to a |
22 | | foreign person who would be a member of the same |
23 | | unitary business group but for the fact that the |
24 | | foreign person's business activity outside the United |
25 | | States is 80% or more of that person's total business |
26 | | activity and (ii) for taxable years ending on or after |
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1 | | December 31, 2008, to a person who would be a member of |
2 | | the same unitary business group but for the fact that |
3 | | the person is prohibited under Section 1501(a)(27) |
4 | | from being included in the unitary business group |
5 | | because he or she is ordinarily required to apportion |
6 | | business income under different subsections of Section |
7 | | 304. The addition modification required by this |
8 | | subparagraph shall be reduced to the extent that |
9 | | dividends were included in base income of the unitary |
10 | | group for the same taxable year and received by the |
11 | | taxpayer or by a member of the taxpayer's unitary |
12 | | business group (including amounts included in gross |
13 | | income pursuant to Sections 951 through 964 of the |
14 | | Internal Revenue Code and amounts included in gross |
15 | | income under Section 78 of the Internal Revenue Code) |
16 | | with respect to the stock of the same person to whom |
17 | | the intangible expenses and costs were directly or |
18 | | indirectly paid, incurred or accrued. The preceding |
19 | | sentence shall not apply to the extent that the same |
20 | | dividends caused a reduction to the addition |
21 | | modification required under Section 203(d)(2)(D-7) of |
22 | | this Act. As used in this subparagraph, the term |
23 | | "intangible expenses and costs" includes (1) expenses, |
24 | | losses, and costs for, or related to, the direct or |
25 | | indirect acquisition, use, maintenance or management, |
26 | | ownership, sale, exchange, or any other disposition of |
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1 | | intangible property; (2) losses incurred, directly or |
2 | | indirectly, from factoring transactions or discounting |
3 | | transactions; (3) royalty, patent, technical, and |
4 | | copyright fees; (4) licensing fees; and (5) other |
5 | | similar expenses and costs. For purposes of this |
6 | | subparagraph, "intangible property" includes patents, |
7 | | patent applications, trade names, trademarks, service |
8 | | marks, copyrights, mask works, trade secrets, and |
9 | | similar types of intangible assets; |
10 | | This paragraph shall not apply to the following: |
11 | | (i) any item of intangible expenses or costs |
12 | | paid, accrued, or incurred, directly or |
13 | | indirectly, from a transaction with a person who |
14 | | is subject in a foreign country or state, other |
15 | | than a state which requires mandatory unitary |
16 | | reporting, to a tax on or measured by net income |
17 | | with respect to such item; or |
18 | | (ii) any item of intangible expense or cost |
19 | | paid, accrued, or incurred, directly or |
20 | | indirectly, if the taxpayer can establish, based |
21 | | on a preponderance of the evidence, both of the |
22 | | following: |
23 | | (a) the person during the same taxable |
24 | | year paid, accrued, or incurred, the |
25 | | intangible expense or cost to a person that is |
26 | | not a related member, and |
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1 | | (b) the transaction giving rise to the |
2 | | intangible expense or cost between the |
3 | | taxpayer and the person did not have as a |
4 | | principal purpose the avoidance of Illinois |
5 | | income tax, and is paid pursuant to a contract |
6 | | or agreement that reflects arm's-length terms; |
7 | | or |
8 | | (iii) any item of intangible expense or cost |
9 | | paid, accrued, or incurred, directly or |
10 | | indirectly, from a transaction with a person if |
11 | | the taxpayer establishes by clear and convincing |
12 | | evidence, that the adjustments are unreasonable; |
13 | | or if the taxpayer and the Director agree in |
14 | | writing to the application or use of an |
15 | | alternative method of apportionment under Section |
16 | | 304(f); |
17 | | Nothing in this subsection shall preclude the |
18 | | Director from making any other adjustment |
19 | | otherwise allowed under Section 404 of this Act |
20 | | for any tax year beginning after the effective |
21 | | date of this amendment provided such adjustment is |
22 | | made pursuant to regulation adopted by the |
23 | | Department and such regulations provide methods |
24 | | and standards by which the Department will utilize |
25 | | its authority under Section 404 of this Act; |
26 | | (D-9) For taxable years ending on or after |
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1 | | December 31, 2008, an amount equal to the amount of |
2 | | insurance premium expenses and costs otherwise allowed |
3 | | as a deduction in computing base income, and that were |
4 | | paid, accrued, or incurred, directly or indirectly, to |
5 | | a person who would be a member of the same unitary |
6 | | business group but for the fact that the person is |
7 | | prohibited under Section 1501(a)(27) from being |
8 | | included in the unitary business group because he or |
9 | | she is ordinarily required to apportion business |
10 | | income under different subsections of Section 304. The |
11 | | addition modification required by this subparagraph |
12 | | shall be reduced to the extent that dividends were |
13 | | included in base income of the unitary group for the |
14 | | same taxable year and received by the taxpayer or by a |
15 | | member of the taxpayer's unitary business group |
16 | | (including amounts included in gross income under |
17 | | Sections 951 through 964 of the Internal Revenue Code |
18 | | and amounts included in gross income under Section 78 |
19 | | of the Internal Revenue Code) with respect to the |
20 | | stock of the same person to whom the premiums and costs |
21 | | were directly or indirectly paid, incurred, or |
22 | | accrued. The preceding sentence does not apply to the |
23 | | extent that the same dividends caused a reduction to |
24 | | the addition modification required under Section |
25 | | 203(d)(2)(D-7) or Section 203(d)(2)(D-8) of this Act; |
26 | | (D-10) An amount equal to the credit allowable to |
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1 | | the taxpayer under Section 218(a) of this Act, |
2 | | determined without regard to Section 218(c) of this |
3 | | Act; |
4 | | (D-11) For taxable years ending on or after |
5 | | December 31, 2017, an amount equal to the deduction |
6 | | allowed under Section 199 of the Internal Revenue Code |
7 | | for the taxable year; |
8 | | and by deducting from the total so obtained the following |
9 | | amounts: |
10 | | (E) The valuation limitation amount; |
11 | | (F) An amount equal to the amount of any tax |
12 | | imposed by this Act which was refunded to the taxpayer |
13 | | and included in such total for the taxable year; |
14 | | (G) An amount equal to all amounts included in |
15 | | taxable income as modified by subparagraphs (A), (B), |
16 | | (C) and (D) which are exempt from taxation by this |
17 | | State either by reason of its statutes or Constitution |
18 | | or by reason of the Constitution, treaties or statutes |
19 | | of the United States; provided that, in the case of any |
20 | | statute of this State that exempts income derived from |
21 | | bonds or other obligations from the tax imposed under |
22 | | this Act, the amount exempted shall be the interest |
23 | | net of bond premium amortization; |
24 | | (H) Any income of the partnership which |
25 | | constitutes personal service income as defined in |
26 | | Section 1348(b)(1) of the Internal Revenue Code (as in |
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1 | | effect December 31, 1981) or a reasonable allowance |
2 | | for compensation paid or accrued for services rendered |
3 | | by partners to the partnership, whichever is greater; |
4 | | this subparagraph (H) is exempt from the provisions of |
5 | | Section 250; |
6 | | (I) An amount equal to all amounts of income |
7 | | distributable to an entity subject to the Personal |
8 | | Property Tax Replacement Income Tax imposed by |
9 | | subsections (c) and (d) of Section 201 of this Act |
10 | | including amounts distributable to organizations |
11 | | exempt from federal income tax by reason of Section |
12 | | 501(a) of the Internal Revenue Code; this subparagraph |
13 | | (I) is exempt from the provisions of Section 250; |
14 | | (J) With the exception of any amounts subtracted |
15 | | under subparagraph (G), an amount equal to the sum of |
16 | | all amounts disallowed as deductions by (i) Sections |
17 | | 171(a)(2) and 265(a)(2) of the Internal Revenue Code, |
18 | | and all amounts of expenses allocable to interest and |
19 | | disallowed as deductions by Section 265(a)(1) of the |
20 | | Internal Revenue Code; and (ii) for taxable years |
21 | | ending on or after August 13, 1999, Sections |
22 | | 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the |
23 | | Internal Revenue Code, plus, (iii) for taxable years |
24 | | ending on or after December 31, 2011, Section |
25 | | 45G(e)(3) of the Internal Revenue Code and, for |
26 | | taxable years ending on or after December 31, 2008, |
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1 | | any amount included in gross income under Section 87 |
2 | | of the Internal Revenue Code; the provisions of this |
3 | | subparagraph are exempt from the provisions of Section |
4 | | 250; |
5 | | (K) An amount equal to those dividends included in |
6 | | such total which were paid by a corporation which |
7 | | conducts business operations in a River Edge |
8 | | Redevelopment Zone or zones created under the River |
9 | | Edge Redevelopment Zone Act and conducts substantially |
10 | | all of its operations from a River Edge Redevelopment |
11 | | Zone or zones. This subparagraph (K) is exempt from |
12 | | the provisions of Section 250; |
13 | | (L) An amount equal to any contribution made to a |
14 | | job training project established pursuant to the Real |
15 | | Property Tax Increment Allocation Redevelopment Act; |
16 | | (M) An amount equal to those dividends included in |
17 | | such total that were paid by a corporation that |
18 | | conducts business operations in a federally designated |
19 | | Foreign Trade Zone or Sub-Zone and that is designated |
20 | | a High Impact Business located in Illinois; provided |
21 | | that dividends eligible for the deduction provided in |
22 | | subparagraph (K) of paragraph (2) of this subsection |
23 | | shall not be eligible for the deduction provided under |
24 | | this subparagraph (M); |
25 | | (N) An amount equal to the amount of the deduction |
26 | | used to compute the federal income tax credit for |
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1 | | restoration of substantial amounts held under claim of |
2 | | right for the taxable year pursuant to Section 1341 of |
3 | | the Internal Revenue Code; |
4 | | (O) For taxable years 2001 and thereafter, for the |
5 | | taxable year in which the bonus depreciation deduction |
6 | | is taken on the taxpayer's federal income tax return |
7 | | under subsection (k) of Section 168 of the Internal |
8 | | Revenue Code and for each applicable taxable year |
9 | | thereafter, an amount equal to "x", where: |
10 | | (1) "y" equals the amount of the depreciation |
11 | | deduction taken for the taxable year on the |
12 | | taxpayer's federal income tax return on property |
13 | | for which the bonus depreciation deduction was |
14 | | taken in any year under subsection (k) of Section |
15 | | 168 of the Internal Revenue Code, but not |
16 | | including the bonus depreciation deduction; |
17 | | (2) for taxable years ending on or before |
18 | | December 31, 2005, "x" equals "y" multiplied by 30 |
19 | | and then divided by 70 (or "y" multiplied by |
20 | | 0.429); and |
21 | | (3) for taxable years ending after December |
22 | | 31, 2005: |
23 | | (i) for property on which a bonus |
24 | | depreciation deduction of 30% of the adjusted |
25 | | basis was taken, "x" equals "y" multiplied by |
26 | | 30 and then divided by 70 (or "y" multiplied |
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1 | | by 0.429); |
2 | | (ii) for property on which a bonus |
3 | | depreciation deduction of 50% of the adjusted |
4 | | basis was taken, "x" equals "y" multiplied by |
5 | | 1.0; |
6 | | (iii) for property on which a bonus |
7 | | depreciation deduction of 100% of the adjusted |
8 | | basis was taken in a taxable year ending on or |
9 | | after December 31, 2021, "x" equals the |
10 | | depreciation deduction that would be allowed |
11 | | on that property if the taxpayer had made the |
12 | | election under Section 168(k)(7) of the |
13 | | Internal Revenue Code to not claim bonus |
14 | | depreciation on that property; and |
15 | | (iv) for property on which a bonus |
16 | | depreciation deduction of a percentage other |
17 | | than 30%, 50% or 100% of the adjusted basis |
18 | | was taken in a taxable year ending on or after |
19 | | December 31, 2021, "x" equals "y" multiplied |
20 | | by 100 times the percentage bonus depreciation |
21 | | on the property (that is, 100(bonus%)) and |
22 | | then divided by 100 times 1 minus the |
23 | | percentage bonus depreciation on the property |
24 | | (that is, 100(1-bonus%)). |
25 | | The aggregate amount deducted under this |
26 | | subparagraph in all taxable years for any one piece of |
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1 | | property may not exceed the amount of the bonus |
2 | | depreciation deduction taken on that property on the |
3 | | taxpayer's federal income tax return under subsection |
4 | | (k) of Section 168 of the Internal Revenue Code. This |
5 | | subparagraph (O) is exempt from the provisions of |
6 | | Section 250; |
7 | | (P) If the taxpayer sells, transfers, abandons, or |
8 | | otherwise disposes of property for which the taxpayer |
9 | | was required in any taxable year to make an addition |
10 | | modification under subparagraph (D-5), then an amount |
11 | | equal to that addition modification. |
12 | | If the taxpayer continues to own property through |
13 | | the last day of the last tax year for which a |
14 | | subtraction is allowed with respect to that property |
15 | | under subparagraph (O) and for which the taxpayer was |
16 | | required in any taxable year to make an addition |
17 | | modification under subparagraph (D-5), then an amount |
18 | | equal to that addition modification. |
19 | | The taxpayer is allowed to take the deduction |
20 | | under this subparagraph only once with respect to any |
21 | | one piece of property. |
22 | | This subparagraph (P) is exempt from the |
23 | | provisions of Section 250; |
24 | | (Q) The amount of (i) any interest income (net of |
25 | | the deductions allocable thereto) taken into account |
26 | | for the taxable year with respect to a transaction |
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1 | | with a taxpayer that is required to make an addition |
2 | | modification with respect to such transaction under |
3 | | Section 203(a)(2)(D-17), 203(b)(2)(E-12), |
4 | | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed |
5 | | the amount of such addition modification and (ii) any |
6 | | income from intangible property (net of the deductions |
7 | | allocable thereto) taken into account for the taxable |
8 | | year with respect to a transaction with a taxpayer |
9 | | that is required to make an addition modification with |
10 | | respect to such transaction under Section |
11 | | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or |
12 | | 203(d)(2)(D-8), but not to exceed the amount of such |
13 | | addition modification. This subparagraph (Q) is exempt |
14 | | from Section 250; |
15 | | (R) An amount equal to the interest income taken |
16 | | into account for the taxable year (net of the |
17 | | deductions allocable thereto) with respect to |
18 | | transactions with (i) a foreign person who would be a |
19 | | member of the taxpayer's unitary business group but |
20 | | for the fact that the foreign person's business |
21 | | activity outside the United States is 80% or more of |
22 | | that person's total business activity and (ii) for |
23 | | taxable years ending on or after December 31, 2008, to |
24 | | a person who would be a member of the same unitary |
25 | | business group but for the fact that the person is |
26 | | prohibited under Section 1501(a)(27) from being |
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1 | | included in the unitary business group because he or |
2 | | she is ordinarily required to apportion business |
3 | | income under different subsections of Section 304, but |
4 | | not to exceed the addition modification required to be |
5 | | made for the same taxable year under Section |
6 | | 203(d)(2)(D-7) for interest paid, accrued, or |
7 | | incurred, directly or indirectly, to the same person. |
8 | | This subparagraph (R) is exempt from Section 250; |
9 | | (S) An amount equal to the income from intangible |
10 | | property taken into account for the taxable year (net |
11 | | of the deductions allocable thereto) with respect to |
12 | | transactions with (i) a foreign person who would be a |
13 | | member of the taxpayer's unitary business group but |
14 | | for the fact that the foreign person's business |
15 | | activity outside the United States is 80% or more of |
16 | | that person's total business activity and (ii) for |
17 | | taxable years ending on or after December 31, 2008, to |
18 | | a person who would be a member of the same unitary |
19 | | business group but for the fact that the person is |
20 | | prohibited under Section 1501(a)(27) from being |
21 | | included in the unitary business group because he or |
22 | | she is ordinarily required to apportion business |
23 | | income under different subsections of Section 304, but |
24 | | not to exceed the addition modification required to be |
25 | | made for the same taxable year under Section |
26 | | 203(d)(2)(D-8) for intangible expenses and costs paid, |
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1 | | accrued, or incurred, directly or indirectly, to the |
2 | | same person. This subparagraph (S) is exempt from |
3 | | Section 250; |
4 | | (T) For taxable years ending on or after December |
5 | | 31, 2011, in the case of a taxpayer who was required to |
6 | | add back any insurance premiums under Section |
7 | | 203(d)(2)(D-9), such taxpayer may elect to subtract |
8 | | that part of a reimbursement received from the |
9 | | insurance company equal to the amount of the expense |
10 | | or loss (including expenses incurred by the insurance |
11 | | company) that would have been taken into account as a |
12 | | deduction for federal income tax purposes if the |
13 | | expense or loss had been uninsured. If a taxpayer |
14 | | makes the election provided for by this subparagraph |
15 | | (T), the insurer to which the premiums were paid must |
16 | | add back to income the amount subtracted by the |
17 | | taxpayer pursuant to this subparagraph (T). This |
18 | | subparagraph (T) is exempt from the provisions of |
19 | | Section 250; and |
20 | | (U) For taxable years beginning on or after |
21 | | January 1, 2023, for any cannabis establishment |
22 | | operating in this State and licensed under the |
23 | | Cannabis Regulation and Tax Act or any cannabis |
24 | | cultivation center or medical cannabis dispensing |
25 | | organization operating in this State and licensed |
26 | | under the Compassionate Use of Medical Cannabis |
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1 | | Program Act, an amount equal to the deductions that |
2 | | were disallowed under Section 280E of the Internal |
3 | | Revenue Code for the taxable year and that would not be |
4 | | added back under this subsection. The provisions of |
5 | | this subparagraph (U) are exempt from the provisions |
6 | | of Section 250. |
7 | | (e) Gross income; adjusted gross income; taxable income. |
8 | | (1) In general. Subject to the provisions of paragraph |
9 | | (2) and subsection (b)(3), for purposes of this Section |
10 | | and Section 803(e), a taxpayer's gross income, adjusted |
11 | | gross income, or taxable income for the taxable year shall |
12 | | mean the amount of gross income, adjusted gross income or |
13 | | taxable income properly reportable for federal income tax |
14 | | purposes for the taxable year under the provisions of the |
15 | | Internal Revenue Code. Taxable income may be less than |
16 | | zero. However, for taxable years ending on or after |
17 | | December 31, 1986, net operating loss carryforwards from |
18 | | taxable years ending prior to December 31, 1986, may not |
19 | | exceed the sum of federal taxable income for the taxable |
20 | | year before net operating loss deduction, plus the excess |
21 | | of addition modifications over subtraction modifications |
22 | | for the taxable year. For taxable years ending prior to |
23 | | December 31, 1986, taxable income may never be an amount |
24 | | in excess of the net operating loss for the taxable year as |
25 | | defined in subsections (c) and (d) of Section 172 of the |
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1 | | Internal Revenue Code, provided that when taxable income |
2 | | of a corporation (other than a Subchapter S corporation), |
3 | | trust, or estate is less than zero and addition |
4 | | modifications, other than those provided by subparagraph |
5 | | (E) of paragraph (2) of subsection (b) for corporations or |
6 | | subparagraph (E) of paragraph (2) of subsection (c) for |
7 | | trusts and estates, exceed subtraction modifications, an |
8 | | addition modification must be made under those |
9 | | subparagraphs for any other taxable year to which the |
10 | | taxable income less than zero (net operating loss) is |
11 | | applied under Section 172 of the Internal Revenue Code or |
12 | | under subparagraph (E) of paragraph (2) of this subsection |
13 | | (e) applied in conjunction with Section 172 of the |
14 | | Internal Revenue Code. |
15 | | (2) Special rule. For purposes of paragraph (1) of |
16 | | this subsection, the taxable income properly reportable |
17 | | for federal income tax purposes shall mean: |
18 | | (A) Certain life insurance companies. In the case |
19 | | of a life insurance company subject to the tax imposed |
20 | | by Section 801 of the Internal Revenue Code, life |
21 | | insurance company taxable income, plus the amount of |
22 | | distribution from pre-1984 policyholder surplus |
23 | | accounts as calculated under Section 815a of the |
24 | | Internal Revenue Code; |
25 | | (B) Certain other insurance companies. In the case |
26 | | of mutual insurance companies subject to the tax |
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1 | | imposed by Section 831 of the Internal Revenue Code, |
2 | | insurance company taxable income; |
3 | | (C) Regulated investment companies. In the case of |
4 | | a regulated investment company subject to the tax |
5 | | imposed by Section 852 of the Internal Revenue Code, |
6 | | investment company taxable income; |
7 | | (D) Real estate investment trusts. In the case of |
8 | | a real estate investment trust subject to the tax |
9 | | imposed by Section 857 of the Internal Revenue Code, |
10 | | real estate investment trust taxable income; |
11 | | (E) Consolidated corporations. In the case of a |
12 | | corporation which is a member of an affiliated group |
13 | | of corporations filing a consolidated income tax |
14 | | return for the taxable year for federal income tax |
15 | | purposes, taxable income determined as if such |
16 | | corporation had filed a separate return for federal |
17 | | income tax purposes for the taxable year and each |
18 | | preceding taxable year for which it was a member of an |
19 | | affiliated group. For purposes of this subparagraph, |
20 | | the taxpayer's separate taxable income shall be |
21 | | determined as if the election provided by Section |
22 | | 243(b)(2) of the Internal Revenue Code had been in |
23 | | effect for all such years; |
24 | | (F) Cooperatives. In the case of a cooperative |
25 | | corporation or association, the taxable income of such |
26 | | organization determined in accordance with the |
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1 | | provisions of Section 1381 through 1388 of the |
2 | | Internal Revenue Code, but without regard to the |
3 | | prohibition against offsetting losses from patronage |
4 | | activities against income from nonpatronage |
5 | | activities; except that a cooperative corporation or |
6 | | association may make an election to follow its federal |
7 | | income tax treatment of patronage losses and |
8 | | nonpatronage losses. In the event such election is |
9 | | made, such losses shall be computed and carried over |
10 | | in a manner consistent with subsection (a) of Section |
11 | | 207 of this Act and apportioned by the apportionment |
12 | | factor reported by the cooperative on its Illinois |
13 | | income tax return filed for the taxable year in which |
14 | | the losses are incurred. The election shall be |
15 | | effective for all taxable years with original returns |
16 | | due on or after the date of the election. In addition, |
17 | | the cooperative may file an amended return or returns, |
18 | | as allowed under this Act, to provide that the |
19 | | election shall be effective for losses incurred or |
20 | | carried forward for taxable years occurring prior to |
21 | | the date of the election. Once made, the election may |
22 | | only be revoked upon approval of the Director. The |
23 | | Department shall adopt rules setting forth |
24 | | requirements for documenting the elections and any |
25 | | resulting Illinois net loss and the standards to be |
26 | | used by the Director in evaluating requests to revoke |
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1 | | elections. Public Act 96-932 is declaratory of |
2 | | existing law; |
3 | | (G) Subchapter S corporations. In the case of: (i) |
4 | | a Subchapter S corporation for which there is in |
5 | | effect an election for the taxable year under Section |
6 | | 1362 of the Internal Revenue Code, the taxable income |
7 | | of such corporation determined in accordance with |
8 | | Section 1363(b) of the Internal Revenue Code, except |
9 | | that taxable income shall take into account those |
10 | | items which are required by Section 1363(b)(1) of the |
11 | | Internal Revenue Code to be separately stated; and |
12 | | (ii) a Subchapter S corporation for which there is in |
13 | | effect a federal election to opt out of the provisions |
14 | | of the Subchapter S Revision Act of 1982 and have |
15 | | applied instead the prior federal Subchapter S rules |
16 | | as in effect on July 1, 1982, the taxable income of |
17 | | such corporation determined in accordance with the |
18 | | federal Subchapter S rules as in effect on July 1, |
19 | | 1982; and |
20 | | (H) Partnerships. In the case of a partnership, |
21 | | taxable income determined in accordance with Section |
22 | | 703 of the Internal Revenue Code, except that taxable |
23 | | income shall take into account those items which are |
24 | | required by Section 703(a)(1) to be separately stated |
25 | | but which would be taken into account by an individual |
26 | | in calculating his taxable income. |
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1 | | (3) Recapture of business expenses on disposition of |
2 | | asset or business. Notwithstanding any other law to the |
3 | | contrary, if in prior years income from an asset or |
4 | | business has been classified as business income and in a |
5 | | later year is demonstrated to be non-business income, then |
6 | | all expenses, without limitation, deducted in such later |
7 | | year and in the 2 immediately preceding taxable years |
8 | | related to that asset or business that generated the |
9 | | non-business income shall be added back and recaptured as |
10 | | business income in the year of the disposition of the |
11 | | asset or business. Such amount shall be apportioned to |
12 | | Illinois using the greater of the apportionment fraction |
13 | | computed for the business under Section 304 of this Act |
14 | | for the taxable year or the average of the apportionment |
15 | | fractions computed for the business under Section 304 of |
16 | | this Act for the taxable year and for the 2 immediately |
17 | | preceding taxable years. |
18 | | (f) Valuation limitation amount. |
19 | | (1) In general. The valuation limitation amount |
20 | | referred to in subsections (a)(2)(G), (c)(2)(I) and |
21 | | (d)(2)(E) is an amount equal to: |
22 | | (A) The sum of the pre-August 1, 1969 appreciation |
23 | | amounts (to the extent consisting of gain reportable |
24 | | under the provisions of Section 1245 or 1250 of the |
25 | | Internal Revenue Code) for all property in respect of |
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1 | | which such gain was reported for the taxable year; |
2 | | plus |
3 | | (B) The lesser of (i) the sum of the pre-August 1, |
4 | | 1969 appreciation amounts (to the extent consisting of |
5 | | capital gain) for all property in respect of which |
6 | | such gain was reported for federal income tax purposes |
7 | | for the taxable year, or (ii) the net capital gain for |
8 | | the taxable year, reduced in either case by any amount |
9 | | of such gain included in the amount determined under |
10 | | subsection (a)(2)(F) or (c)(2)(H). |
11 | | (2) Pre-August 1, 1969 appreciation amount. |
12 | | (A) If the fair market value of property referred |
13 | | to in paragraph (1) was readily ascertainable on |
14 | | August 1, 1969, the pre-August 1, 1969 appreciation |
15 | | amount for such property is the lesser of (i) the |
16 | | excess of such fair market value over the taxpayer's |
17 | | basis (for determining gain) for such property on that |
18 | | date (determined under the Internal Revenue Code as in |
19 | | effect on that date), or (ii) the total gain realized |
20 | | and reportable for federal income tax purposes in |
21 | | respect of the sale, exchange or other disposition of |
22 | | such property. |
23 | | (B) If the fair market value of property referred |
24 | | to in paragraph (1) was not readily ascertainable on |
25 | | August 1, 1969, the pre-August 1, 1969 appreciation |
26 | | amount for such property is that amount which bears |
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1 | | the same ratio to the total gain reported in respect of |
2 | | the property for federal income tax purposes for the |
3 | | taxable year, as the number of full calendar months in |
4 | | that part of the taxpayer's holding period for the |
5 | | property ending July 31, 1969 bears to the number of |
6 | | full calendar months in the taxpayer's entire holding |
7 | | period for the property. |
8 | | (C) The Department shall prescribe such |
9 | | regulations as may be necessary to carry out the |
10 | | purposes of this paragraph. |
11 | | (g) Double deductions. Unless specifically provided |
12 | | otherwise, nothing in this Section shall permit the same item |
13 | | to be deducted more than once. |
14 | | (h) Legislative intention. Except as expressly provided by |
15 | | this Section there shall be no modifications or limitations on |
16 | | the amounts of income, gain, loss or deduction taken into |
17 | | account in determining gross income, adjusted gross income or |
18 | | taxable income for federal income tax purposes for the taxable |
19 | | year, or in the amount of such items entering into the |
20 | | computation of base income and net income under this Act for |
21 | | such taxable year, whether in respect of property values as of |
22 | | August 1, 1969 or otherwise. |
23 | | (Source: P.A. 102-16, eff. 6-17-21; 102-558, eff. 8-20-21; |
24 | | 102-658, eff. 8-27-21; 102-813, eff. 5-13-22; 102-1112, eff. |