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Illinois Free Printable 2019 IL-1041 Instructions for 2020 Illinois Fiduciary Income and Replacement Tax Return (Includes Schedule D)

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Fiduciary Income and Replacement Tax Return (Includes Schedule D)
2019 IL-1041 Instructions

Illinois Department of Revenue Use for tax year ending on or after December 31, 2019, and before December 31, 2020. IL-1041 Instructions 2019 What’s new for 2019? • A checkbox has been added to Step 1 for 52/53 week filers. See Specific Instructions for more information. • Public Act 101-31 • requires the addition of a line to report income from the surcharge on the sale of assets by gaming licensee. See Specific Instructions for more information. • requires wagering and gambling winnings from Illinois sources for taxable years ending on or after December 31, 2019, to be allocated to Illinois and to be included in determining Illinois income. See Schedule NR Instructions for more information. • creates the Data Center Construction Employment Tax Credit. See Schedule 1299-I for information. • Public Act 101-178 extends the Film Production Services Tax Credit. The credit is not eligible for tax years beginning on or after January 1, 2027. See Schedule 1299-I for more information. • Public Act 100-981 added two new bonds to Schedule M, Line 20. See Schedule M Instructions for more information. • Public Act 101-207 • extends the Research and Development Credit to tax years ending prior to January 1, 2027, and • creates the Apprenticeship Education Expense Credit effective for tax years beginning on or after January 1, 2020. See Schedule 1299 Specific Instructions and Schedule 1299-I for more information about these credits. • Public Act 101-01 adds two new lines to Schedule M. See Schedule M Instructions for specific information. • An addition equal to the amount of the deduction allowed under IRC Section 250(a)(1)(A). • A subtraction equal to the excess business loss disallowed as a deduction by IRC Section 461(1)(1)(B). This line does not apply to Form IL-1120 filers. Reminder: Taxpayers making an extension payment, an estimated payment, a voluntary prepayment of their tax liabilities, or a return payment should use Form IL-1041-V, Payment Voucher for Fiduciary Income and Replacement Tax, for all payments. General Information Who must file Form IL-1041? You must file Form IL-1041 if you are a fiduciary of a trust or an estate and the trust or the estate • has net income or loss as defined under the Illinois Income Tax Act (IITA), regardless of any deduction for distributions to beneficiaries; or • is a resident of Illinois and files, or is required to file, a federal income tax return (regardless of net income or loss). (See “When is nonbusiness income allocable to Illinois” to help you complete your Form IL-1041.); or • is a nonresident of Illinois but received income from Illinois sources which was not reported as pass-through withholding on Form IL-1120-ST, Form IL-1065 or Form IL-1041. You must also file Illinois Schedule NR (Form IL-1041), Nonresident Computation of Fiduciary Income, to determine the income that is taxed by Illinois during the tax year. For more information, see Illinois Schedule NR (Form IL-1041) with revision date 12/17 or later. of any overpayment. Additionally, failure to submit appropriate documentation when requested may result in a referral to our Audit Bureau for compliance action. Trusts and Estates must complete Form IL-1041. Do not send a computer printout with line numbers and dollar amounts attached to a blank copy of the return. Computer generated printouts are not acceptable, even if they are in the same format as IDOR’s forms. Computer generated forms from an IDOR-approved software developer are acceptable. Form IL-1041 (R12/19) is for tax year ending on or after December 31, 2019, and before December 31, 2020. For tax year ending on or after December 31, 2018 and before December 31, 2019, use the 2018 form. Using the wrong form will delay the processing of your return. How do I register my business? If you are required to file Form IL-1041, you should register with IDOR. You may register “Grantor” trusts are not required to file Form IL-1041. Estates do not pay replacement tax. • online with MyTax Illinois, our free online account management program for taxpayers; If the trust or estate is a charitable organization exempt from federal income tax by reason of IRC Section 501(a), it is not required to file Form IL-1041. However, unrelated business taxable income, as determined under IRC Section 512, is subject to tax (without any deduction for the Illinois income tax) and must be reported on Form IL-990-T, Exempt Organization Income and Replacement Tax Return, instead of Form IL-1041. For more information, see Form IL-990-T instructions. • by completing Form REG-1, Illinois Business Registration What forms must I use? In general, you must obtain and use forms prescribed by the Illinois Department of Revenue (IDOR). Separate statements not on forms provided or approved by IDOR will not be accepted and you will be asked for appropriate documentation. Failure to comply with this requirement may result in failure to file penalties, a delay in the processing of your return, or a delay in the generation IL-1041 Instructions (R-02/20) Application, and mailing it to the address on the form; or • by visiting a regional office. Visit our website at tax.illinois.gov for more information. Registering with IDOR prior to filing your return ensures that your tax returns are accurately processed. Your identification numbers as an Illinois business taxpayer are your federal employer identification number (FEIN) and your Illinois account number. When should I file? Your Illinois filing due date is the same as your federal filing due date. In general, Form IL-1041 is due on or before the 15th day of the 4th month following the close of the tax year. Printed by the authority of the State of Illinois - Web only, One copy Page 1 of 20 Automatic six-month extension — We grant you an automatic six-month extension of time to file your fiduciary tax return. The automatic extension of time to file is granted whether or not you request it. You are not required to file a form in order to obtain this automatic extension. If you expect tax to be due, you must pay any tentative tax due, by the original due date of the return, in order to avoid interest and penalty on tax not paid by that date. To pay any tax due by the original due date of your return: • visit our website, tax.illinois.gov, or • mail Form IL-1041-V, Payment Voucher for Fiduciary Income and Replacement Tax, using the address on the form. If an unpaid liability is disclosed when you file your return, then you may owe penalty and interest charges in addition to the tax. See the “What are the penalties and interest?” section below. An extension of time to file your Form IL-1041 is not an extension of time for payment of Illinois tax. Additional extensions beyond the automatic extension period — We will grant an extension of more than six months only if an extension is granted by the Internal Revenue Service (IRS) beyond the date of the Illinois automatic extension. Your additional Illinois extension will be for the length of time approved by the IRS. You must attach a copy of the approved federal extension to your Form IL-1041. When should I pay? Payment of tax — You must pay your Illinois Income and Replacement Tax and pass-through withholding reported on behalf of your members in full on or before the original due date of the return. Failure to pay the tax due on or before the original due date of the return may result in penalty and interest. This payment date applies even though an automatic extension for filing the return has been granted. All payments must be made using Form IL-1041-V, Payment Voucher for Fiduciary Income and Replacement Tax. Estimated tax payments — For state purposes, trusts and estates are not required to make estimated payments, although they may be required to make federal estimated payments. Extension Payments - If you expect tax to be due, you must pay any tentative tax due by the original due date of the return using Form IL-1041-V. See Appendix A for more information. Voluntary Prepayments - You may make voluntary prepayments of your own tax liability as well as make pass-through withholding prepayments on behalf of your beneficiaries using Form IL-1041-V. See Appendix B for more information. correct, and complete. The fact that a fiduciary’s name is signed to a return is prima facie evidence that the fiduciary is authorized to sign the return on behalf of the trust or estate. Any person paid to prepare the return (other than a fiduciary of the trust or estate, or a regular, full-time employee of the taxpayer, such as a clerk, secretary, or bookkeeper) must provide a signature, date the return, enter the preparer tax identification number (PTIN) issued to them by the Internal Revenue Service, and provide their firm’s name, address, and phone number. If your return is not signed, any overpayment of tax is considered forfeited if, after notice and demand for signature, you fail to provide a signature within three years from the date your return was filed. What are the penalties and interest? Penalties — You will owe • a late-filing penalty if you do not file a processable return by the extended due date; • a late-payment penalty if you do not pay the tax you owe by the original due date of the return; • a bad check penalty if your remittance is not honored by your financial institution; • a cost of collection fee if you do not pay the amount you owe within 30 days of the date printed on your bill. Interest — Interest is calculated on tax from the day after the original due date of your return through the date you pay the tax. We will bill you for penalties and interest. For more information about penalties and interest, see Publication 103, Penalties and Interest for Illinois Taxes, available at tax.illinois.gov. What if I am discontinuing my business? Terminated — If you are the fiduciary of a trust or estate that has terminated during any tax year, you are still required to file the tax return. Also, we will pursue the assessment and collection of taxes if • the trust or estate was liable for income and replacement tax for that or any previous tax period; or, • the beneficiaries had income allocable to Illinois and were liable for income and replacement tax for that or any previous tax period, due to a distribution from the trust or estate. Sales or transfers — If you are a fiduciary that, outside the usual course of business, sells or transfers the major part of any one or more of We encourage you to make your payments electronically using MyTax Illinois or Modernized E-File (MeF) systems, or you may use Form EFT-1, Authorization Agreement for Certain Electronic Payments, to set up an ACH credit or phone debit transaction. These options can be found on our website at tax.illinois.gov. If you make your payments using MyTax Illinois, MeF, or EFT, do not mail us your Form IL-1041-V. You must use one of our electronic payment options if the IDOR has notified you that you are required to make payments electronically. • the stock of goods which you are in the business of selling, We will apply each payment to the earliest due date until that liability is paid, unless you provide specific instructions to apply it to another period. You may also be assessed a bad check penalty if your remittance is not honored by your financial institution. or Who should sign the return? Your Form IL-1041 must be signed by the fiduciary of the trust or estate. If there are two or more joint fiduciaries, the signature of one will comply with the requirements of the IITA. The signature verifies by written declaration (and under penalties of perjury) that the signing fiduciary has personally examined the return and the return is true, Page 2 of 20 • the furniture or fixtures of your business, • the machinery and equipment of your business, or • the real property of your business, you or the purchaser must complete and send us Form CBS-1, Notice of Sale, Purchase, or Transfer of Business Assets, no later than 10 days prior to the date the sale takes place. Send this form, along with copies of the sales contract and financing agreement, to: ILLINOIS DEPARTMENT OF REVENUE BULK SALES UNIT PO BOX 19035 SPRINGFIELD IL 62794-9035 [email protected] Request for prompt determination — You may make a request for prompt determination of liability, in accordance with IITA 35 ILCS 5/905(i), if you are an estate that has terminated. A completed tax return must be on file with us before you can submit a request for prompt determination. Do not submit your return and request at the same time. Mail your initial return to the address IL-1041 Instructions (R-02/20) indicated on the form. You should allow 12 weeks for processing. If your request is properly made, the expiration of the statute of limitations (absent fraud) will not extend beyond 18 months from the date of your request. Mail your request and a copy of your previously submitted return to: ILLINOIS DEPARTMENT OF REVENUE PO BOX 19044 SPRINGFIELD IL 62794-9044 The procedure described above does not apply to 11 U.S. Code Section 505 Determination of Tax Liability requests. What if I need to correct or change my return? Do not file another Form IL-1041 with “amended” figures to change your originally filed Form IL-1041. If you need to correct or change your return after it has been filed, you must file Form IL-1041-X, Amended Fiduciary Income and Replacement Tax Return. Returns filed before the extended due date of the return are treated as your original return for all purposes. For more information, see Form IL-1041-X instructions. Do the IDOR and the IRS exchange income tax information? The IDOR and the IRS exchange income tax information for the purpose of verifying the accuracy of information reported on federal and Illinois tax returns. All amounts you report on Form IL-1041 are subject to verification and audit. Should I round? You must round the dollar amounts on Form IL-1041 and accompanying schedules to whole-dollar amounts. To do this, you should drop any amount less than 50 cents and increase any amount of 50 cents or more to the next higher dollar. What if I have an Illinois net loss deduction (NLD)? Use the version of the Schedule NLD, Illinois Net Loss Deduction, or the Schedule UB/NLD, Unitary Illinois Net Loss Deduction, which corresponds to your tax year. You must file your return for the loss year and for each intervening year in order to establish the amount of your deduction. You should file Form IL-1041-X only after you have filed a processable Illinois Income Tax return. You must file a separate Form IL-1041-X for each tax year you wish to change. If you have an Illinois NLD from any loss year ending on or after December 31, 1986, it is subtracted from and limited to your base income allocable to Illinois. State changes only — File Form IL-1041-X promptly if you discover an error on your Illinois return that does not relate to an error on your federal return but rather was caused by To determine your “Illinois net loss” start with federal taxable income and apply all addition and subtraction modifications and all allocation and apportionment provisions. • a mistake in transferring information from your federal return to your Illinois return; Illinois net losses incurred in tax years ending on or after December 31, 2003, may only be carried forward for 12 years. • failing to report or misreporting to Illinois an item that has no effect on your federal return; or If you are carrying an Illinois NLD, you must complete Illinois Schedule NLD, Illinois Net Loss Deduction, and claim the deduction on Step 4, Line 30. • a mistake in another state’s tax return that affects the computation of your Illinois tax liability. If you are claiming an overpayment, Form IL-1041-X must be filed within three years after the extended due date or the date the return was filed, or within one year after the tax giving rise to the overpayment was paid, whichever is latest. Federal changes only — File Form IL-1041-X if you have filed an amended federal return or if you have been notified by the IRS that they have made changes to your return. This includes any change in your federal income tax liability, any tax credit, or the computation of your federal taxable income as reported for federal income tax purposes, if the change affects any item entering into the computation of net income, net loss, or any credit for any year under the IITA. You must file Form IL-1041-X no later than 120 days after the federal changes have been agreed to or finally determined to avoid a late-payment penalty. If your federal change decreases the tax due to Illinois and you are entitled to a refund or credit carryforward, you must file Form IL-1041-X within two years plus 120 days of federal finalization. Attach a copy of federal finalization or proof of acceptance from the IRS along with a copy of your amended federal form, if applicable, to your Form IL-1041-X. Examples of federal finalization include a copy of one or more of the following items: • • • your federal refund check your audit report from the IRS your federal transcript verifying your federal taxable income What records must I keep? You must maintain books and records to substantiate any information reported on your Form IL-1041. Your books and records must be available for inspection by our authorized agents and employees. IL-1041 Instructions (R-02/20) If you had discharge of indebtedness income for a taxable year ending on or after December 31, 2008, and all or a portion of this income was excluded from your federal gross income due to bankruptcy or insolvency, then you may be required to reduce any Illinois net loss you incurred for that year or Illinois net loss carryovers to that year before you determine your Illinois NLD. See the Step 4 Instructions and Schedule NLD for more information. If you have an Illinois net loss for this tax year, you must file Form IL-1041 reporting the loss in order to carry the loss forward to another year. If you need more information, see the Schedule NLD instructions, or the Illinois Income Tax Regulations, Sections 100.2050 and 100.2300 through 100.2330, available on our website at tax.illinois.gov. What is the standard exemption? The standard exemption is $1,000. If you have a change in your tax year end, and the result is a tax period of less than 12 months, the standard exemption is prorated based on the number of days in the short tax year. However, if this is your first or final return, you are allowed to use the full-year standard exemption even if it is a short tax year. If you are a nonresident, you must use Schedule NR (1041) to compute your exemption allowance. If you need further information, see IITA, Section 401(b). For tax years beginning on or after January 1, 2017, the standard exemption may not be claimed if the taxpayer’s adjusted gross income for the taxable year is $250,000 or more. See Specific Instructions for more information. What attachments do I need? When filing your return there are certain types of income items and subtraction modifications that require the attachment of Illinois or federal forms and schedules. Breakdowns, statements, Page 3 of 20 and other documentation may also be required. Instructions for these attachments appear throughout the specific instructions for completing your return. All Illinois forms and schedules include an “IL Attachment No.” in the upper right corner of the form. Required attachments should be ordered numerically behind the tax return, as indicated by the IL Attachment No. Failure to attach forms and schedules in the proper order may result in processing delays. Required copies of documentation from your federal return or other sources should be attached behind the completed Illinois return. You must attach a copy of your U.S. Form 1041, Pages 1 and 2, to your Illinois return if you are required to file federally. Schedule D, Beneficiary Information, must be completed and attached to all Form IL-1041 filings. If you are required to attach any Schedule(s) K-1-T, Beneficiary’s Share of Income and Deductions, only attach Schedule(s) K-1-T you received which lists your name and FEIN in Step 2 of Schedule K-1-T. Do not attach copies of Schedule(s) K-1-T you issued and which lists your name and FEIN in Step 1 of Schedule K-1-T. When filing your Form IL-1041 include only forms and schedules required to support your return. Send correspondence separately to: ILLINOIS DEPARTMENT OF REVENUE TAXPAYER CORRESPONDENCE PO BOX 19044 SPRINGFIELD IL 62794-9044 Definitions to help you complete your Form IL-1041. Resident means • an individual who is present in Illinois for other than a temporary or transitory purpose; • an individual who is absent from Illinois for a temporary or transitory purpose but who is domiciled in Illinois; Nonbusiness income means all income other than business income or compensation. For more information about the different types of nonbusiness income, see the instructions for Illinois Schedule NB, Nonbusiness Income. A pass-through entity is any entity treated as a partnership, subchapter S corporation, or trust for federal income tax purposes. Pass-through entity income is the income that any partnership, subchapter S corporation, or trust passes through to its partners, shareholders, or beneficiaries. Pass-through withholding is the amount required to be reported and paid by the pass-through entity on behalf of its nonresident partners, shareholders, and beneficiaries • who have not submitted Form IL-1000-E, Certificate of Exemption for Pass-through Withholding, to the pass-through entity, and • who receive business and nonbusiness income from the pass-through entity. Pass-through withholding is • reported to your beneficiaries on the Schedule K-1-T you send to them, • reported to IDOR on your Form IL-1041 and Illinois Schedule D, and • paid with your return or voluntarily prepaid with Form IL-1041-V. If any of your beneficiaries are pass-through entities themselves, they are required to report and pay pass-through withholding on behalf of their own nonresident partners, shareholders, or beneficiaries on the income you passed through. Your beneficiaries may claim a credit on their Illinois Income Tax return for pass-through withholding you reported and paid on their behalf. Trusts can both make and receive pass-through withholding. Estates can receive pass-through withholding. • Pass-through withholding you owe on behalf of your members is a payment of pass-through withholding you make on behalf of your nonresident beneficiaries who have not submitted Form IL-1000-E to you. This amount will be reported on Form IL-1041, Line 53. • Pass-through withholding reported to you is a credit for pass-through withholding you receive on Schedules K-1-P and K-1-T as a partner, shareholder, or beneficiary of a pass-through entity. This amount will be reported on Form IL-1041, Line 55c. • the estate of a decedent who at his or her death was domiciled in Illinois; • a trust created by a will of a decedent who at his or her death was domiciled in Illinois; or • an irrevocable trust, whose grantor was domiciled in Illinois at the time the trust became irrevocable. For purposes of this definition, a trust is irrevocable to the extent that the grantor is not treated as the owner of the trust under IRC Sections 671 through 678. For a more detailed explanation of “domicile” and “resident,” see Form IL-1040, Illinois Individual Income Tax Return, General Information. Nonresident means a person who is not a resident of Illinois, as defined previously. In the following definitions, all references to “income” include losses. Illinois base income is your federal taxable income, plus any additions on Lines 2 through 10, less any subtractions on Line 25. See specific instructions for Steps 2 and 3. Business income means all income (other than compensation) that may be apportioned by formula among the states in which you are doing business without violating the Constitution of the United States. All income of a trust or estate is business income unless it is clearly attributable to only one state and is earned or received through activities totally unrelated to any business you are conducting in more than one state. Business income is net of all deductions attributable to that income. Page 4 of 20 If you are a nonresident and the pass-through withholding reported to you satisfies your Illinois Income Tax liability, you are not required to file an Illinois Income Tax return. If you had Illinois income from other sources and the pass-through withholding made on your behalf does not cover your liability, you must file a return to report the tax on all of your Illinois income and claim a credit for pass-through withholding made on your behalf. All residents and pass-through entities must file their own annual Illinois Income Tax return to claim a credit for any pass-through withholding reported to them. When is business income allocable to Illinois? If the trust or estate is a resident, all income received, regardless of source, is allocable to Illinois. If the trust or estate is a nonresident and business income is derived • wholly inside Illinois, the entire amount of business income is allocable to Illinois; • wholly outside of Illinois, none of the business income is allocable to Illinois; IL-1041 Instructions (R-02/20) • inside and outside of Illinois, complete Illinois Schedule NR (Form IL-1041), Nonresident Computation of Fiduciary Income, Step 6. See the instructions for Illinois Schedule NR (Form IL-1041), Step 6. has jurisdiction to subject you to a net income tax, even though that state does not impose such a tax. This definition is for purposes of allocating nonbusiness income and apportioning business income inside or outside Illinois. • from subchapter S corporations, partnerships, and other fiduciaries, the business income may be allocable to Illinois. See the Illinois Schedule(s) K-1-P, Partner’s or Shareholder’s Share of Income, Deductions, Credits, and Recapture, furnished by the subchapter S corporation or partnership or the Illinois Schedule(s) K-1-T furnished by the other fiduciary to determine what income is allocable to Illinois. What is the fiduciary’s share or beneficiary’s share of income? When is nonbusiness income allocable to Illinois? If the trust or estate is a resident, all nonbusiness income is allocable to Illinois. If the trust or estate is a nonresident, items of income and deduction which constitute nonbusiness income are allocable to Illinois according to the following rules: • Interest and dividend income received by a nonresident trust or estate is not allocable to Illinois. • Net rents and royalties Real property — Rents and royalties from real property are allocable to Illinois if the property is located in Illinois. Tangible personal property — Rents and royalties from tangible personal property are allocable to Illinois to the extent the property is used in Illinois. The extent of use of tangible personal property in a state is determined by multiplying the rents and royalties derived from the property by a fraction, in which the numerator is the number of days the property is located in the state during the rental and royalty period in the tax year and the denominator is the total number of days during all rental or royalty periods in the tax year. • Patent and copyright royalties are allocable to Illinois to the extent the patent or copyright is used in Illinois. A patent is used in Illinois to the extent that it is employed in production, fabrication, manufacturing, or other processing in Illinois or to the extent that a patented product is produced in Illinois. A copyright is used in Illinois to the extent that printing or other publication originates in Illinois. • Gains and losses from sales or exchanges of real or tangible property are in Illinois if the property is located in Illinois at the time of the sale or exchange. Gains or losses from the sale or exchange of intangible personal property are not allocable to Illinois. • Income from subchapter S corporations, partnerships and other fiduciaries paid to the trust or estate is allocable to Illinois as if the trust or estate received it directly. See the Illinois Schedule(s) K-1-P furnished by the subchapter S corporation or partnership or the Illinois Schedule(s) K-1-T furnished by the other fiduciary to determine what income is allocable to Illinois. • Illinois State lottery winnings and proceeds from sales or other transfers of rights to lottery winnings received by a nonresident fiduciary are allocable to Illinois. • Other unspecified items of income or deduction of a nonresident taxpayer are not allocable to Illinois. What does taxable in other states mean? Taxable in other states means you are subject to and actually pay “tax” in another state. “Tax” means net income tax, franchise tax measured by net income, or franchise tax for the privilege of doing business. You are considered taxable in another state if that state IL-1041 Instructions (R-02/20) The fiduciary’s share of an item of income or deduction is that amount required to be taken into account in computing fiduciary taxable income for federal income tax purposes for the tax year and is not paid, credited, or required to be distributed to the beneficiaries of the trust or estate for that year. The fiduciary’s share of each of the addition and subtraction items required under the IITA is that part of each item that relates and is attributable to the fiduciary’s share of the items of income and deduction. The beneficiary’s share of each of the items is the amount that was properly paid, credited, or required to be distributed to the beneficiary for the tax year. The items of income and deduction and the additions and subtractions that are deemed to have been paid, credited, or distributed must be taken into account by the beneficiaries in proportion to their respective shares of the distributable net income. When must I use Illinois Schedules K-1-T, K-1-T(3), and D? You must use Illinois Schedule K-1-T to supply each beneficiary with that individual’s or entity’s share of the amounts reported on your federal and Illinois tax returns. For Illinois Income Tax purposes, you must give a completed Illinois Schedule K-1-T and a copy of the Illinois Schedule K-1-T(2), Beneficiary’s Instructions, to each beneficiary. Do not file copies of Illinois Schedule K-1-T that you issued to your beneficiaries with your Form IL-1041. However, you must keep a copy of each Illinois Schedule K-1-T with your tax records. See Illinois Schedule K-1-T(1), Instructions for Trusts and Estates Completing Schedule K-1-T and Schedule K-1-T(3), for more information. Trusts only - You must use Illinois Schedule K-1-T(3), Pass-through Withholding Calculation for Nonresident Members, to calculate the required tax you must report and pay on behalf of your nonresident beneficiaries who receive business or nonbusiness income from you. You must complete the schedule if you have business or nonbusiness income distributable to Illinois nonresident beneficiaries who have not provided you with Form IL-1000-E, Certificate of Exemption for Pass-through Withholding. You are required to complete Schedule K-1-T(3) for each such beneficiary and keep a copy of the completed schedule in your files. Do not submit Schedule K-1-T(3) to IDOR unless we request it from you. The information entered on this schedule will assist you in completing Illinois Schedule D. See Schedule K-1-T(1) for more information. You must use Illinois Schedule D to supply us with a listing of your beneficiaries, certain items of income, and pass-through withholding you made on their behalf. You must complete all lines of Illinois Schedule D, as applicable, and file it with your Form IL-1041. What if the trust makes an accumulation or capital gain distribution? If the trust makes an accumulation distribution or a capital gain distribution (both as defined in IRC Section 665), the portion of the distribution included in the income of a nonresident or part-year resident beneficiary (under IRC Sections 668 and 669) is taxable to the extent that the trust income was allocable to Illinois before distribution. What if I participated in a reportable transaction? If you participated in a reportable transaction, including a “listed transaction,” during this tax year and were required to disclose Page 5 of 20 that transaction to the IRS, you are also required to disclose that information to Illinois. You must send us two copies of the form used to disclose the transaction to the IRS. • Mail the first copy of the federal disclosure statement to: ILLINOIS DEPARTMENT OF REVENUE PO BOX 19029 SPRINGFIELD IL 62794-9029 • Attach the second copy to your Illinois Income Tax return for the tax year that the IRS disclosure was required. Mail the second copy and your Illinois Income Tax return to the address shown on your return. Do not mail the second copy and your Illinois Income Tax return to the address listed above. What if I need additional assistance or forms? • Visit our website at tax.illinois.gov for assistance, forms or schedules. • Write us at: ILLINOIS DEPARTMENT OF REVENUE PO BOX 19001 SPRINGFIELD IL 62794-9001 • Call 1 800 732‑8866 or 217 782-3336 (TDD, telecommunications device for the deaf, at 1 800 544-5304). • Visit a taxpayer assistance office - 8:00 a.m. to 5:00 p.m. (Springfield office) and 8:30 a.m. to 5:00 p.m. (all other offices), Monday through Friday. Where should I file? By mail - If a payment is enclosed with your return, mail your Form IL-1041 to ILLINOIS DEPARTMENT OF REVENUE PO BOX 19053 SPRINGFIELD IL 62794-9053 If a payment is not enclosed, mail your Form IL-1041 to: ILLINOIS DEPARTMENT OF REVENUE PO BOX 19009 SPRINGFIELD IL 62794-9009 Online - Visit our website at tax.illinois.gov and click on the MyTax Illinois logo. Specific Instructions Specific instructions for most of the lines are provided on the following pages. If a specific line is not referenced, follow the instructions on the form. Step 1 — Identify your fiduciary A — All taxpayers: Type or print your legal business name. If you have a name change from last year, check the corresponding box. B — Type or print your mailing address. If your address has changed since you filed your last return or if this is your first return, check the box. If you checked the box in Line B because you have never filed an Illinois return, you must also check the “first return” box in Line E. C — Indicate if you are a trust or an estate by checking the appropriate box. G — Enter your entire federal employee identification number (FEIN). A partial FEIN will delay the processing of your return. H — If you are required to disclose reportable transactions and you have attached federal Form 8886, check the box. See “What if I participated in a reportable transaction?” for more information. I — If your residency is not in Illinois, check the box and attach a completed Illinois Schedule NR (Form IL-1041), Nonresident Computation of Fiduciary Income, to your tax return. J — If you earned or can carry forward credits on Illinois Schedule 1299-D, Income Tax Credits (for corporations and fiduciaries), check the box and attach Illinois Schedule 1299-D and any other required support listed on Schedule 1299-D to your tax return, even if you are unable to use any of the credits in this tax year. Note: If you are filing a qualified revocable trust who has made a federal Section 645 election, you must mark the estate box. K — If you received income from a partnership, an S corporation, or another trust or estate, check the box and attach Illinois Schedule I, Income Received, to your tax return. D — Indicate if you are an Electing Small Business Trust (ESBT), an individual bankruptcy estate, or a complex trust without distributions by checking the appropriate box or boxes (you may check more than one). L — If you are claiming a special depreciation addition or subtraction modifications on Form IL-1041, check the box and attach Form IL-4562, Special Depreciation, to your tax return. You may only indicate you are an • ESBT or a complex trust without distributions if you checked the “Trust” box on Step 1, Line C; or • individual bankruptcy estate if you checked the “Estate” box on Step 1, Line C. For individual bankruptcy estates, Illinois follows the federal filing procedures. You should complete Form IL-1040, Individual Income Tax Return, and carry the tax amount to Step 6 of Form IL-1041 and check the Individual Bankruptcy box. On the top of Form IL-1040, write “Individual Bankruptcy Estate. Do not detach.” Attach Form IL-1040 to the back of Form IL-1041. E — If this is your first or final return, check the appropriate box. F — Indicate your method of accounting by checking the appropriate box. You must use the same accounting method (e.g., cash or accrual) and tax year that you used for federal income tax purposes. Page 6 of 20 M — If you are claiming other addition or subtraction modifications on Form IL-1041, check the box and attach Schedule M, Other Additions and Subtractions (for businesses), to your tax return. N — If you are claiming related-party expense modifications on your Form IL-1041, check the box and attach Schedule 80/20, RelatedParty Expenses, to your tax return. O — Check the box if you must adjust your loss or loss carryover due to Discharge of Indebtedness. For more information, see the instructions for Line 28, the Loss Reduction Worksheet on Page 8 of these instructions, and Schedule NLD. P — Check this box if you are a 52/53-week filer. A 52/53-week filer is a fiscal filer with a tax year that varies from 52 to 53 weeks because their tax year ends on the same day of the week instead of the last day of the month. You must complete an IDOR-issued or previously approved Form IL-1041 and corresponding schedules. Do not send a computer printout or spreadsheets with line numbers and dollar amounts attached to a blank copy of the return. IL-1041 Instructions (R-02/20) Step 2 — Figure your income or loss Line 1 — Enter the amount from U.S. Form 1041, Line 23. Attach a copy of your federal return. Do not include any capital gains on the lump-sum distribution from a retirement plan that you reported on your U.S. Form 4972, instead of on Line 8 of your U.S. Form 1041. Line 2 through 10 — Do not enter negative amounts on Lines 2 through 10. If you are claiming over-accrued taxes, include them on Schedule M (for business), Line 23. Line 2 — Enter the amount of net operating loss deduction from U.S. Form 1041, Line 15b. Line 3 — If you are an Electing Small Business Trust (ESBT), and your net taxable income from subchapter S corporations is positive, enter that figure here. Also, you should include the amounts applicable from this trust in your addition and subtraction modifications. Attach a breakdown worksheet explaining each amount. If your net taxable income from subchapter S corporations is a loss, report it on Line 23. Line 4 — Enter the exemption amount from your U.S. Form 1041, Line 21. If you are a qualified disability trust, enter $100 or the amount of your exemption, whichever is less. Lines 5 through 10 - Addition Modifications — Any addition modification required in the computation of base income should be adjusted by any amount permanently set aside for charitable purposes pursuant to IRC Section 642(c). Enter the addition modifications in Column A if the item is included in figuring your beneficiaries’ income. Enter the addition modifications in Column B if the item is included in figuring your income. Line 5 — You must add back any amount of Illinois Income and Replacement taxes and surcharge that you deducted on your U.S. Form 1041 to arrive at your federal taxable income. You are not required to add back taxes from other states that you included as a federal deduction. Line 6 — Enter the total of all amounts excluded from federal taxable income that were received or accrued as interest during the tax year. Line 7 — Enter the addition amount calculated on Form IL-4562, Special Depreciation, Step 2, Line 4. For more information, see Form IL-4562 and instructions. Attach Form IL-4562 to your Form IL-1041. The sum of the amounts reported in columns A and B of this line should match the total amount reported on Form IL-4562, Step 2, Line 4. Line 8 — Enter the interest or intangible expenses, or insurance premiums paid to an affiliated company, to the extent these expenses exceed any taxable dividends you received from the affiliated company. To compute the amount of this addition, complete Step 2 of Illinois Schedule 80/20 and enter on Line 8 the total from Illinois Schedule 80/20, Step 2, Line 13. Attach Illinois Schedule 80/20 to your Form IL-1041. The sum of the amounts reported in columns A and B of this line should match the total amount reported on Illinois Schedule 80/20, Step 2, Line 13. Some interest and intangible expenses may be exempt from this add-back provision. See Illinois Schedule 80/20 Instructions for more information including definitions of “affiliated company,” “intangible expenses,” and “intangible assets.” Line 9 — If you are a beneficiary in another trust or estate, a partner in a partnership, or a shareholder in a subchapter S corporation, include your distributive share of additions received from the trust, estate, partnership, or subchapter S corporation on Schedules K-1-P or K-1-T. If you receive multiple schedules IL-1041 Instructions (R-02/20) because you are a recipient from multiple entities, you should enter the combined total of Step 5, Column A, Lines 32 through 37, from all Illinois Schedules K-1-P you receive and Step 5, Column A, Lines 30 through 35, from all Illinois Schedules K-1-T you receive. Attach a copy of all Illinois Schedules K-1-P and K-1-T to your Form IL-1041. The trust or estate is required to send you an Illinois Schedule K-1-T and Schedule K-1-T(2) and the partnership or subchapter S corporation is required to send you an Illinois Schedule K-1-P and Schedule K-1-P(2), specifically identifying your share of income. Include only additions reported to you on the Schedule(s) K-1-P or K-1-T you received from a pass-through entity in which you are an investing partner or shareholder or a beneficiary. Do not attach copies of Schedules K-1-T you issued to your beneficiaries. You should keep copies of these schedules in your records. Line 10 — Enter the addition amount calculated on Illinois Schedule M, Other Additions and Subtractions (for businesses), Step 2, Line 10. Attach a copy of Illinois Schedule M to your Form IL-1041. The sum of the amounts reported in columns A and B of this line should match the total amount reported on Illinois Schedule M, Step 2, Line 10. The following are examples of items that must be added to taxable income and are included on the Illinois Schedule M. • Notes, bonds, debentures, or obligations issued by the Governments of Guam, American Samoa, Puerto Rico, the Northern Mariana Islands, or the Virgin Islands. • Lloyd’s plan of operations loss if reported on your behalf on Form IL-1065, Partnership Replacement Tax Return, and included in your federal taxable income. • Nonresidents only: Business Expense Recapture - Deductions you claimed this year and in your two most recent tax years for expenses connected with income from an asset or activity which were reported as business income in prior years and as nonbusiness income on this return. This recapture should be allocated to the fiduciary to the extent the business expenses were allocated to the fiduciary in the year they were deducted. See Illinois Schedule NR (Form IL-1041), Nonresident Computation of Fiduciary Income, Line 36, and Illinois Schedule NR (Form IL-1041) Instructions for more information. • Any other state’s income tax deducted from federal taxable income, if a corresponding credit is claimed on Illinois Schedule CR (Form IL-1041), Credit for Tax Paid to Other States. Only add back the taxes for which you are claiming a credit. • The smaller of any capital loss on U.S. Form 1041, Line 4 that you may carry forward or any negative amount on U.S. Form 1041, Line 22. Step 3 — Figure your base income or loss Lines 13 through 25 - Subtraction Modifications — Do not enter negative amounts on Lines 13 through 25. Any subtraction modification required in the computation of base income should be adjusted by any amount permanently set aside for charitable purposes pursuant to IRC Section 642(c). Enter the subtraction modifications in Column A if the item is included in figuring your beneficiaries’ income. Enter the subtraction modifications in Column B if the item is included in figuring your income. A double deduction is prohibited by IITA, Section 203(g). You cannot deduct the same item more than once when figuring your subtractions. Page 7 of 20 Line 13 — Enter the amount from Illinois Schedule F (Form IL-1041), Gains from Sales or Exchanges of Property Acquired Before August 1, 1969, Line 18. Capital gain, or Section 1245 or 1250 gain, on property acquired before August 1, 1969, may be limited by the value of the property on August 1, 1969. See Illinois Schedule F for instructions. Attach Illinois Schedule F, and a copy of U.S. Schedule D (or U.S. Form 8949), U.S. Form 4797, and U.S. Form 6252, if filed. Line 14 — Enter the federally taxed portion of any qualified distribution received from • a qualified employee pension, profit sharing, stock bonus, or bond purchase plan, or from a government (including military) retirement or disability plan. Report only such distribution that was included in taxable income on U.S. Form 1041, Line 8. Attach a copy of U.S. Form 1041, Page 1, and supporting schedule for Line 8. • an Individual Retirement Account (IRA), a self-employed retirement plan (SEP), or a 401(k) plan. • a lump-sum distribution of cash or property from a qualified plan (e.g., employer securities or retirement income, endowment or life insurance contracts). Report the total distribution treated as long-term capital gain shown on U.S. Schedule D plus any amount treated as ordinary income and included in U.S. Form 1041, Line 8. Attach a copy of U.S. Schedule D and U.S. Form 1041, Page 1, and supporting schedule for Line 8. • the redemption of U.S. Retirement Bonds. Attach a copy of U.S. Form 1041, Page 1, and supporting schedule for Line 8. • gain on the sale or exchange of employer securities. Complete Form IL-4644, Gains from Sales of Employer’s Securities Received from a Qualified Employee Benefit Plan, to compute the subtraction. Attach Form IL-4644 to your Form IL-1041. Do not subtract any capital gains on the lump-sum distribution from a retirement plan that you reported on your U.S. Form 4972, rather than on U.S. Form 1041, Line 8. These amounts are excluded from your federal taxable income on Form IL-1041, Line 1, and cannot be subtracted. You must notify each beneficiary of his or her share of any amount included on Line 14, Column A, that is attributable to a capital gain distribution or to a gain realized on the disposition of employer securities. You must also advise the beneficiary that his or her share of any such amount is to be reported only if he or she is limiting capital gain on the disposition of property acquired before August 1, 1969, on Illinois Schedule F. If the beneficiary is an individual, he or she will include the amount on Illinois Schedule F (Form IL-1040), Line 13. If the beneficiary is a trust or estate, the fiduciary will include the amount on Illinois Schedule F (Form IL-1041), Line 14. Line 15 — Enter the total interest received or accrued from U.S. Treasury bonds, notes, bills, federal agency obligations, and savings bonds that is included in your federal taxable income. You may not subtract anything that is not identified in Illinois Publication 101, Income Exempt from Tax. This amount is net of any bond premium amortization deducted federally. Line 16 — Enter any retirement payments to retired partners that were received by the trust or estate and excluded in computing net earnings from self-employment by IRC Section 1402. You must attach Illinois Schedule 1299-B, River Edge Redevelopment Zone or Foreign Trade Zone (or sub-zone) Subtractions, to your Form IL-1041 if you have an amount on Lines 17 and 18. Line 17 — Enter the River Edge Redevelopment Zone Dividend subtraction from Illinois Schedule 1299-B, Step 1, Line 3. Line 18 — Enter the High Impact Business Dividend subtraction from Illinois Schedule 1299-B, Step 1, Line 6. Line 19 — Enter the amount of any contribution made to a job training project established under the “Tax Increment Allocation Redevelopment Act,” as amended. For further information, see Illinois Compiled Statutes, Chapter 65, paragraph 5/11-74.4-1 et seq. Line 20 — Enter the subtraction allowance from Form IL-4562, Special Depreciation, Step 3, Line 10. Attach Form IL-4562 to your Form IL-1041. The sum of the amounts reported in columns A and B of this line should match the total amount reported on Form IL-4562, Step 3, Line 10. Line 21 — Enter the amount from Illinois Schedule 80/20, Step 4, Line 32. Attach Illinois Schedule 80/20 to your Form IL-1041. The sum of the amounts reported in columns A and B of this line should match the total amount reported on Illinois Schedule 80/20, Step 4, Line 32. You should use Illinois Schedule 80/20 • if you added back interest paid to an affiliated company on Step 2, Line 8, you may subtract any interest received from that affiliated company during this tax year, up to the amount of your addition for interest expense paid to that company. Also, if you added back intangible expenses from a transaction with an affiliated company on Line 8, you may subtract any income you received during the tax year from similar transactions with the affiliated company, up to the amount of your addition for intangible expense for that company. To compute the amount of this subtraction, complete Illinois Schedule 80/20. • if you are an affiliated company, and you received interest or intangible income from someone who had to add back the interest and intangible expense on their Illinois Schedule 80/20, you may subtract your interest or intangible income from that person. Line 22 — Enter your distributive share of subtractions passed through to you on Schedules K-1-P or K-1-T by a partnership, S corporation, trust, or estate that you were either a partner, a Loss Reduction Worksheet 1 Enter the amount of the reduction to your federal net operating losses See federal Form 982. 1 _________________ 2 Enter your income allocation ratio. See instructions. 2 _________________ 3 Multiply the amount on Line 1 by Line 2. This is your reduction amount. Enter the result here and on Form IL-1041, Line 28. 3 _________________ Line 1 — Follow the instructions in Line 1. Line 2 — Your income allocation ratio is calculated by dividing the amount of debt cancellation income excluded from your gross income that would have been allocated or apportioned to Illinois under the IITA if it was not excluded by the total amount of debt cancellation income excluded from your gross income. If all of your debt cancellation income would have been business income, use the apportionment factor you calculated on Schedule NR for the tax year of the debt cancellation. Line 3 — Follow the instructions on the form. Page 8 of 20 IL-1041 Instructions (R-02/20) shareholder, or a beneficiary of. Do not include any amounts passed through that are reflected on Illinois Schedule 1299-B. Attach a copy of all Illinois Schedules K-1-P and K-1-T you received to your Form IL-1041. The partnership or the subchapter S corporation is required to send you an Illinois Schedule K-1-P and Schedule K-1-P(2) and the trust or estate is required to send you an Illinois Schedule K-1-T and Schedule K-1-T(2), specifically identifying your share of subtractions. Include only subtractions reported to you on the Schedule(s) K-1-P or K-1-T you received from a pass-through entity in which you are an investing partner or shareholder or a beneficiary. Do not attach copies of Schedules K-1-T you issued to your beneficiaries. You should keep copies of these schedules in your records. Line 23 — If you are an ESBT, enter the amount of net taxable income if it is a loss passed through to you by subchapter S corporations. Also, you should include the amounts applicable from this trust in your addition and subtraction modifications. Attach a breakdown worksheet explaining each amount. Net positive income from subchapter S corporations is reported on Line 3. Do not enter an amount on Line 23a. Line 24 — Enter the subtraction amount calculated on Illinois Schedule M Step 3, Line 36. Attach a copy of Illinois Schedule M to your Form IL-1041. The sum of the amounts reported in columns A and B of this line should match the total amount reported on Illinois Schedule M, Step 3, Line 36. You may not subtract anything that is not identified below, on Schedule M (for businesses), or in Illinois Publication 101. Subtractions allowed on Illinois Schedule M include: • notes, bonds, debentures, or obligations issued by the Governments of Guam, American Samoa, Puerto Rico, the Northern Mariana Islands, or the Virgin Islands, to the extent that you were required to add these amounts to your federal taxable income; • Lloyd’s plan of operations income if reported on your behalf on Form IL-1065 and included in your federal taxable income; • the amount equal to the deduction used to compute the federal tax credit for restoration of amounts held under claim of right under IRC Section 1341; • the amounts disallowed as federal deductions or interest expenses under IRC Sections 171(a)(2), 265, or 280C; • reparations or other amounts received as a victim of persecution for racial or religious reasons by Nazi Germany or any other Axis regime that are included in your federal taxable income. Also include any reparations or other amounts received as an heir of such victim that are included in your federal taxable income; • any other income included on Step 2, Line 11, exempt from taxation by Illinois by reason of its Constitution or statutes or by the Constitution, treaties, or statutes of the United States. This amount is net of any bond premium amortization deducted federally. For more information, see Illinois Publication 101. Line 26 — Subtract Line 25 from Line 12. If you are a resident of Illinois enter this amount on Step 4, Line 27. The base income of a resident trust or estate is not subject to allocation or apportionment. The entire amount is allocated to Illinois under the provisions of the IITA. If you are a nonresident of Illinois, complete Illinois Schedule NR (Form IL-1041) before completing Step 4. Attach Illinois Schedule NR (Form IL-1041) to your Form IL-1041. For more information, see Illinois Schedule NR (Form IL-1041) instructions. IL-1041 Instructions (R-02/20) Step 4 — Figure your net income Line 27 — Follow the instructions on the form. If this amount is a loss, you may be allowed to carry it forward to other years as an Illinois net loss deduction (NLD). Line 28 — If you were required to reduce the net operating loss reported on your federal Form 1041 because you excluded any discharge of indebtedness income from this tax year’s gross income, then you may be required to reduce the net loss reported on Line 27. Use the Loss Reduction Worksheet on Page 8 to figure your loss reduction. Attach a copy of your federal Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, to your Form IL-1041. For more information, see Illinois Income Tax Regulations, Section 100.2310(c). If you also have Illinois net operating loss carryovers to the tax year of the debt cancellation, you may also be required to reduce these carryovers. See Schedule NLD for more information. Line 29 — If you have a discharge of indebtedness adjustment on Line 28, add Lines 27 (a negative number) and 28 (a positive number), and enter the result here. This amount cannot be greater than zero. If you do not have a discharge of indebtedness adjustment, enter zero on Line 28 and the amount from Line 27 on Line 29. Line 30 — Enter your Illinois NLD carryforward from the Illinois Schedule NLD, Step 1, Line 5 total box. Attach Illinois Schedule NLD to your Form IL-1041. Line 31 — The standard exemption is $1,000. If you have a change in your tax year end, and the result is a tax period of less than 12 months, the standard exemption is prorated based on the number of days in the short tax year. However, if this is your first or final return, you are allowed to use the full-year standard exemption even if it is a short tax year. If you are a nonresident, you must use Schedule NR (Form IL-1041) to compute your exemption allowance. This figure cannot be greater than “$1,000.” The standard exemption is $0.00 if your AGI is $250,000 or more. You should make the determination about your AGI based on AGI under IRC Section 67(e). Step 5 — Figure your net replacement tax - For trusts only, estates go to Step 6 Line 35 — Enter your recapture of investment credits from Illinois Schedule 4255, Recapture of Investment Tax Credits, Step 4, Column C, Line 18. If you claimed any Illinois investment tax credit in a prior year on Form IL-477, Replacement Tax Investment Credits, and any of the property was disqualified within 48 months of being placed in service, you must use Illinois Schedule 4255 to compute the amount of recapture. Credit must be recaptured in the year the property became disqualified. Line 37 — Enter the amount from Illinois Schedule CR (Form IL-1041), Credit for Tax Paid to Other States, Step 5, Line 60. Attach Illinois Schedule CR and all required supporting documents to your Form IL-1041. For more information, see Illinois Schedule CR instructions. Line 38 — Enter the amount from Form IL-477, Step 1, Line 13. Attach Form IL-477 and any other required support listed on Form IL-477 to your Form IL-1041. You may claim a replacement tax investment credit of .5 percent (.005) of the basis of qualified property placed in service in Illinois during the tax year. An additional credit of up to .5 percent (.005) of the basis of qualified property is available if your Illinois base employment increased over Page 9 of 20 the preceding year or if your business is new to Illinois. Excess credit may be carried forward for five years following the excess credit year. For more information, see Form IL-477 instructions. Step 6 — Figure your net income tax - For trusts and estates Line 42 — Follow the instructions on the form. Line 43 — Enter the total of your recapture of investment credits from Illinois Schedule 4255, Step 4, Columns A and B, Line 18 and Step 5, Line 21. See Schedule 4255 instructions for more information regarding the recapture of investment credits. If you claimed an Illinois Enterprise Zone or River Edge Redevelopment Zone Investment Credit, High Impact Business Investment Credit, or Angel Investment Credit in a prior year on Illinois Schedule 1299-D, Income Tax Credits, and any of the property becomes disqualified, you must use Illinois Schedule 4255 to compute the amount of recapture. Credit must be recaptured in the year in which the property became disqualified. For more information, see Illinois Schedule 4255. Line 45 — Enter the amount from Illinois Schedule CR (Form IL-1041), Step 5, Line 59. Attach Illinois Schedule CR and all required supporting documents to your Form IL-1041. For more information, see Illinois Schedule CR instructions. Line 46 — Enter the amount from Illinois Schedule 1299-D, Step 2, Line 21. The total of all credits is limited to the total income tax shown on Line 44. Attach Illinois Schedule 1299-D and any other required support listed on Schedule 1299-D to your Form IL-1041. For more information, see Illinois Schedules 1299-D and 1299-I instructions. Step 7 — Figure your refund or balance due Line 51 — Compassionate Use of Medical Cannabis Program Act surcharge. Definitions Organization registrant means a corporation, partnership, trust, limited liability company (LLC), or other organization, that holds either a medical cannabis cultivation center registration issued by the Illinois Department of Agriculture or a medical cannabis dispensary registration issued by the Illinois Department of Financial and Professional Regulation. A line has been included on Schedules K-1-P and K-1-T to identify the amount of federal income attributable to transactions subject to the surcharge that was passed through to you on federal Schedule K-1. How do I figure the surcharge? If the surcharge applies to you, complete the Surcharge Worksheet on Page 11. For more information, see Illinois Income Tax Regulations, Section 100.2060. Line 52 — Sale of Assets by Gaming Licensee surcharge Definitions Gaming licensee is an organization licensee under the Illinois Horse Racing Act of 1975 and/or an organization gaming licensee under the Illinois Gambling Act. Transactions subject to the surcharge means sales and exchanges of • capital assets; • depreciable business property; • real property used in the trade or business; and • Section 197 intangibles of a gaming licensee. What is the surcharge? For each taxable year 2019 through 2027, a surcharge is imposed on all taxpayers on income arising from the transactions subject to the surcharge of a gaming licensee. The amount of the surcharge is equal to the amount of federal income tax liability for the taxable year attributable to the transactions subject to the surcharge. To whom does the surcharge apply? The surcharge is imposed on any taxpayer who incurs a federal income tax liability on the income realized on a “transaction subject to the surcharge,” including individuals and other taxpayers who are not themselves the “gaming licensee” that engaged in the transaction. The surcharge imposed shall not apply if • Transactions subject to the surcharge means sales and exchanges of • capital assets; • depreciable business property; • real property used in the trade or business; and • Section 197 intangibles of an organization registrant. What is the surcharge? For each taxable year beginning or ending during the Compassionate Use of Medical Cannabis Program, a surcharge is imposed on all taxpayers on income arising from the transactions subject to the surcharge of an organization registrant under the Compassionate Use of Medical Cannabis Program Act. The amount of the surcharge is equal to the amount of federal income tax liability for the taxable year attributable to the transactions subject to the surcharge. To whom does the surcharge apply? The surcharge is imposed on any taxpayer who incurs a federal income tax liability on the income realized on a “transaction subject to the surcharge,” including individuals and other taxpayers who are not themselves the “organization registrant” that engaged in the transaction. Page 10 of 20 • the organization gaming license, organization license, or racetrack property is transferred as a result of any of the following: • bankruptcy, a receivership, or a debt adjustment initiated by or against the initial licensee or the substantial owners of the initial licensee; • cancellation, revocation, or termination of any such license by the Illinois Gaming Board or the Illinois Racing Board; • a determination by the Illinois Gaming Board that transfer of the license is in the best interests of Illinois gaming; • the death of an owner of the equity interest in a licensee; • acquisition of a controlling interest in the stock or substantially all of the assets of a publicly traded company; • a transfer by a parent company to a wholly owned subsidiary; or • the transfer or sale to or by one person to another person where both persons were initial owners of the license when the license was issued; the controlling interest in the organization gaming license, organization license, or racetrack property is transferred in a transaction to lineal descendants in which no gain or loss is recognized or as a result of a transaction in accordance with Section 351 of the Internal Revenue Code in which no gain or loss is recognized; or IL-1041 Instructions (R-02/20) Surcharge Worksheet for IL-1041 Instructions: Complete the appropriate column for the surcharge(s) you are claiming. A B Compassionate Use of
Extracted from PDF file 2019-illinois-form-il-1041.pdf, last modified February 2020

More about the Illinois Form IL-1041 Corporate Income Tax Tax Return TY 2019

We last updated the Fiduciary Income and Replacement Tax Return (Includes Schedule D) in March 2020, so this is the latest version of Form IL-1041, fully updated for tax year 2019. You can download or print current or past-year PDFs of Form IL-1041 directly from TaxFormFinder. You can print other Illinois tax forms here.

Related Illinois Corporate Income Tax Forms:

TaxFormFinder has an additional 75 Illinois income tax forms that you may need, plus all federal income tax forms. These related forms may also be needed with the Illinois Form IL-1041.

Form Code Form Name
Form IL-1041-V Payment Voucher for Fiduciary Income and Replacement Tax
Form IL-1041-X Amended Fiduciary Income and Replacement Tax Return (Includes Schedule D)
Form IL-1041-X-V Payment Voucher for Amended Fiduciary Income and Replacement Tax

Download all IL tax forms View all 76 Illinois Income Tax Forms


Form Sources:

Illinois usually releases forms for the current tax year between January and April. We last updated Illinois Form IL-1041 from the Department of Revenue in March 2020.

Show Sources >

Form IL-1041 is an Illinois Corporate Income Tax form. Like the Federal Form 1040, states each provide a core tax return form on which most high-level income and tax calculations are performed. While some taxpayers with simple returns can complete their entire tax return on this single form, in most cases various other additional schedules and forms must be completed, depending on the taxpayer's individual situation, to create a complete income tax return package.

About the Corporate Income Tax

The IRS and most states require corporations to file an income tax return, with the exact filing requirements depending on the type of company.

Sole proprietorships or disregarded entities like LLCs are filed on Schedule C (or the state equivalent) of the owner's personal income tax return, flow-through entities like S Corporations or Partnerships are generally required to file an informational return equivilent to the IRS Form 1120S or Form 1065, and full corporations must file the equivalent of federal Form 1120 (and, unlike flow-through corporations, are often subject to a corporate tax liability).

Additional forms are available for a wide variety of specific entities and transactions including fiduciaries, nonprofits, and companies involved in other specific types of business.

Historical Past-Year Versions of Illinois Form IL-1041

We have a total of nine past-year versions of Form IL-1041 in the TaxFormFinder archives, including for the previous tax year. Download past year versions of this tax form as PDFs here:


2019 Form IL-1041

2019 IL-1041 Instructions

2018 Form IL-1041

2018 IL-1041 Fiduciary Income and Replacement Tax Return

2017 Form IL-1041

2017 IL-1041 Fiduciary Income and Replacement Tax Return

2016 Form IL-1041

2016 IL-1041, Fiduciary Income and Replacement Tax Return

Fiduciary Income and Replacement Tax Return -includes Schedule D) 2015 Form IL-1041

2015 Form IL-1041, Fiduciary Income and Replacement Tax Return

2014, Form IL-1041, Fiduciary Income and Replacement Tax Return 2014 Form IL-1041

2014 Form IL-1041, Fiduciary Income and Replacement Tax Return


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