Illinois General Assembly - 35 ILCS 5/ Illinois Income Tax Act.

(35 ILCS 5/243)

Sec. 243. The Illinois Gives tax credit.

(a) For taxable years ending on or after December 31, 2025 and ending before January 1, 2030, each taxpayer for whom a tax credit has been authorized by the Department of Revenue under the Illinois Gives Tax Credit Act is entitled to a credit against the tax imposed under subsections (a) and (b) of Section 201 in an amount equal to the amount authorized under that Act.

(b) For partners of partnerships and shareholders of Subchapter S corporations, there is allowed a credit under this Section to be determined in accordance with Section 251 of this Act.

(c) The credit may not be carried back and may not reduce the taxpayer's liability to less than zero. If the amount of the credit exceeds the tax liability for the year, the excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit year. The tax credit shall be applied to the earliest year for which there is a tax liability. If there are credits for more than one year that are available to offset a liability, the earlier credit shall be applied first.

(Source: P.A. 103-592, Article 170, Section 170-90, eff. 6-7-24; 104-417, eff. 8-15-25.)

(35 ILCS 5/244)

Sec. 244. Child tax credit.

(a) For the taxable years beginning on or after January 1, 2024, each individual taxpayer who has at least one qualifying child who is younger than 12 years of age as of the last day of the taxable year is entitled to a credit against the tax imposed by subsections (a) and (b) of Section 201. For tax years beginning on or after January 1, 2024 and before January 1, 2025, the credit shall be equal to 20% of the credit allowed to the taxpayer under Section 212 of this Act for that taxable year. For tax years beginning on or after January 1, 2025, the amount of the credit shall be equal to 40% of the credit allowed to the taxpayer under Section 212 of this Act for that taxable year.

(b) If the amount of the credit exceeds the income tax liability for the applicable tax year, then the excess credit shall be refunded to the taxpayer. The amount of the refund under this Section shall not be included in the taxpayer's income or resources for the purposes of determining eligibility or benefit level in any means-tested benefit program administered by a governmental entity unless required by federal law.

(c) The Department may adopt rules to carry out the provisions of this Section.

(d) As used in this Section, "qualifying child" has the meaning given to that term in Section 152 of the Internal Revenue Code.

(e) This Section is exempt from the provisions of Section 250.

(Source: P.A. 103-592, eff. 6-7-24; 104-417, eff. 8-15-25.)

(35 ILCS 5/245)

Sec. 245. (Repealed).

(Source: P.A. 90-553, eff. 6-1-98. Repealed by P.A. 99-933, eff. 1-27-17.)

(35 ILCS 5/250)

Sec. 250. Sunset of exemptions, credits, and deductions.

(a) The application of every exemption, credit, and deduction against tax imposed by this Act that becomes law after the effective date of this amendatory Act of 1994 shall be limited by a reasonable and appropriate sunset date. A taxpayer is not entitled to take the exemption, credit, or deduction for tax years beginning on or after the sunset date. Except as provided in subsection (b) of this Section, if a reasonable and appropriate sunset date is not specified in the Public Act that creates the exemption, credit, or deduction, a taxpayer shall not be entitled to take the exemption, credit, or deduction for tax years beginning on or after 5 years after the effective date of the Public Act creating the exemption, credit, or deduction and thereafter; provided, however, that in the case of any Public Act authorizing the issuance of tax-exempt obligations that does not specify a sunset date for the exemption or deduction of income derived from the obligations, the exemption or deduction shall not terminate until after the obligations have been paid by the issuer.

(b) Notwithstanding the provisions of subsection (a) of this Section, the sunset date of any exemption, credit, or deduction that is scheduled to expire in 2011, 2012, or 2013 by operation of this Section shall be extended by 5 years.

(Source: P.A. 97-636, eff. 6-1-12.)

(35 ILCS 5/251)

Sec. 251. Pass-through of credits to partners and S corporation shareholders. For taxable years ending on or after December 31, 2023, if any person earning a credit against the tax imposed under subsections (a) and (b) of Section 201 is a partnership or Subchapter S corporation, the credit is allowed to pass through to the partners and shareholders in accordance with the determination of income and distributive share of income under Sections 702 and 704 and Subchapter S of the Internal Revenue Code, or as otherwise agreed by the partners or shareholders, provided that such agreement shall be executed in writing prior to the due date of the return for the taxable year and meet such other requirements as the Department may establish by rule. Partnership has the meaning prescribed in subdivision (a)(16) of Section 1501.

(Source: P.A. 103-396, eff. 1-1-24.)

(35 ILCS 5/252)

Sec. 252. Advancing Innovative Manufacturing for Illinois Tax Credit.

(a) For tax years beginning on or after January 1, 2026, a taxpayer who has entered into an agreement under the Advancing Innovative Manufacturing for Illinois Tax Credit Act is entitled to a credit against the taxes imposed under subsections (a) and (b) of Section 201 of this Act in an amount to be determined in the Agreement. If the taxpayer is a partnership or Subchapter S corporation, the credit shall be allowed to the partners or shareholders in accordance with the provisions of Section 251. The Department, in cooperation with the Department of Commerce and Economic Opportunity, shall adopt rules to enforce and administer the provisions of this Section. This Section is exempt from the provisions of Section 250 of this Act.

(b) The credit established under this Section is subject to the conditions set forth in the agreement and the following limitations:

(1) The amount of the credit shall be as stated in the agreement between the taxpayer and the Department of Commerce and Economic Opportunity. The production of a tax credit certificate shall occur after the project is placed in service and the taxpayer adequately completes all required reporting demonstrating completion of the capital improvement investment as outlined within the program agreement. The credit shall be available only in the taxable year in which the project is placed in service. Except as applied in a carryover year pursuant to paragraph (2), the credit may not be applied against any State income tax liability in more than 10 taxable years.

(2) The credit shall be claimed for the taxable year in which the tax credit award certificate is issued, and the certificate shall be attached to the return. The credit may not exceed the amount of the taxpayer's liability under subsections (a) and (b) of Section 201 of this Act. Any credit that is unused in the year the credit is computed may be carried forward and applied to the tax liability for 10 taxable years following the excess credit year. The credit shall be applied to the earliest year for which there is a tax liability.

(3) No credit shall be allowed with respect to any agreement for any taxable year ending after the noncompliance date. Upon receiving notification by the Department of Commerce and Economic Opportunity of the noncompliance of a taxpayer with an agreement, the Department shall notify the taxpayer that no credit is allowed with respect to that agreement for any taxable year ending after the noncompliance date, as stated in the notification. If any credit has been allowed with respect to an agreement for a taxable year ending after the noncompliance date for that agreement, any refund paid to the taxpayer for that taxable year shall, to the extent of that credit allowed, be an erroneous refund within the meaning of Section 912 of this Act.

(4) If the credit awarded under this Section is required to be recaptured under the provisions of Section 77-40 of the Advancing Innovative Manufacturing for Illinois Tax Credit Act, the tax imposed under subsections (a) and (b) of Section 201 shall be increased by the amount of the recapture for the taxable year in which recapture is made.

(Source: P.A. 104-6, eff. 6-16-25.)

(35 ILCS 5/Art. 3 heading) ARTICLE 3. ALLOCATION AND APPORTIONMENT OF BASE INCOME.

(35 ILCS 5/301) (from Ch. 120, par. 3-301)

Sec. 301. General Rule.

(a) Residents. All items of income or deduction which were taken into account in the computation of base income for the taxable year by a resident shall be allocated to this State.

(b) Part-year residents. All items of income or deduction which were taken into account in the computation of base income for the taxable year by a part-year resident shall, for that part of the year the part-year resident was a resident of this State, be allocated to this State and, for the remaining part of the year, be allocated to this State only to the extent provided by Section 302, 303 or 304 (relating to compensation, nonbusiness income and business income, respectively).

(c) Other persons.

(1) In general. Any item of income or deduction which was taken into account in the computation of base income for the taxable year by any person other than a resident and which is referred to in Section 302, 303 or 304 (relating to compensation, nonbusiness income and business income, respectively) shall be allocated to this State only to the extent provided by such section.

(2) Unspecified items. Any item of income or deduction which was taken into account in the computation of base income for the taxable year by any person other than a resident and which is not otherwise specifically allocated or apportioned pursuant to Section 302, 303 or 304 (including, without limitation, interest, dividends, items of income taken into account under the provisions of Sections 401 through 425 of the Internal Revenue Code, and benefit payments received by a beneficiary of a supplemental unemployment benefit trust which is referred to in Section 501(c)(17) of the Internal Revenue Code):

(A) in the case of an individual, trust, or estate, shall not be allocated to this State; and

(B) in the case of a corporation or a partnership, shall be allocated to this State if the taxpayer had its commercial domicile in this State at the time such item was paid, incurred or accrued.

(Source: P.A. 90-491, eff. 1-1-98; 90-562, eff. 12-16-97.)

(35 ILCS 5/302) (from Ch. 120, par. 3-302)

Sec. 302. Compensation paid to nonresidents.

(a) In general. All items of compensation paid in this State (as determined under Section 304(a)(2)(B)) to an individual who is a nonresident at the time of such payment and all items of deduction directly allocable thereto, shall be allocated to this State.

(b) Reciprocal exemption. The Director may enter into an agreement with the taxing authorities of any state which imposes a tax on or measured by income to provide that compensation paid in such state to residents of this State shall be exempt from such tax; in such case, any compensation paid in this State to residents of such state shall not be allocated to this State. All reciprocal agreements shall be subject to the requirements of Section 2505-575 of the Department of Revenue Law (20 ILCS 2505/2505-575).

(c) Cross references.

(1) For allocation of amounts received by nonresidents from certain employee trusts, see Section 301(b)(2).

(2) For allocation of compensation by residents, see Section 301(a).

(Source: P.A. 90-491, eff. 1-1-98; 91-239, eff. 1-1-00.)