Illinois Replacement Tax Investment Credits

Replacement Tax Investment Credits
IL-477
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Illinois Department of Revenue					

		

IL-477			

Year ending

Replacement Tax		
	 	 	
Month			 Year
Investment
Credits		
IL Attachment No. 18
	 		
	

Attach to Form IL-1120, IL-1065,	
IL-1120-ST, IL-1041, IL-990-T, or IL-1023-C.

	
Write your name as shown on your return.	
	

Write your federal employer identification number (FEIN).

Step 1: 	 Figure your Replacement Tax Investment Credit for qualified property placed 	
	
in service during the tax year
	

A	

		
	
Description of 	
	
qualified property	

	 1	
		
		
		
	 2	
	 3	
		
		

	 4	
		

	 5	
		

	 6	
		

	 7	
	 8	
	 9	
	10	
	11	
		

	12	
		

B	

C	

Date placed		
in service	
Useful	
Month Year	
life	

D	

E	

New	 Business
or	
activity	
used*	 (see inst.)	

F	
Location of use	
(city or county)

a								 	
b								
c								 	

G			
Basis			

H
Column G x .5% (.005)

1a		
		
1b		
		
1c	 			

* If the property is used, write the abbreviation of the state in which the property was previously used.			

Write the total of each Column G and H.	 	
				 2			
If your business is new to Illinois, write the amount from Line 2, Column H, here and check
the box in Step 2. If your business is not new to Illinois, complete Step 2 to see if you qualify 				
for an additional credit based on increases in employment. 	
	
3	
Write the distributive share of replacement tax investment credit from partnerships and S corporations.
Attach Schedule(s) K-1-P.								
4	
Add Line 2, Column H, and Lines 3 and 4. This is your total replacement tax investment credit
from this year.								
5	
Multiply Line 5 by the percentage of total ownership in the partnership or S corporation attributable to
partners or shareholders subject to replacement tax. See instructions.			
6	
Subtract Line 6 from Line 5.	
					 	
7	
Write the amount of your credit carryforward from a previous year. 		
		
8	
Add Lines 7 and 8. This is your total investment credit available to use this year.		 	
9	
Write your total replacement tax. See Instructions.	 		
	
		
10	
Write the lesser of Line 9 or Line 10 here and on your return. See instructions. 							
This is your replacement tax investment credit to use this year.	
	
		
11	
Subtract Line 11 from Line 9. If the amount is negative, write zero.
This is the amount of excess credit available to be carried forward five years.	
		
12	

Step 2:	 Figure your base employment calculation worksheet
Note: If your business is new to Illinois, check this box.
You automatically qualify for the additional credit. Do not 	
	
A	
B
complete Lines 13 through 19. See instructions for Step 1, Line 3.	
Month	
Current year	
Preceding year
	
13	 Write as your “base employment” the number of covered workers	
1st 	
		 from Line 1 of Illinois Department of Employment	Security Form 	
2nd 	
		 UI-3/40, Employer’s Contribution and Wage Report. 		
3rd 	
		 Make entries only for those months that you were taxed by Illinois. 	
4th 	
						
5th 	
						
6th 	
				
		
7th 	
						
8th	
						
9th 	
						
10th 	
						
11th 	
						
12th	
	14	 Write the total of each column.				
	 14	
	15	 Divide the amount on Line 14 by the number of months used in that column.									
		 Round the result to six decimal places and write the amount here.	
	 15	
	16	 Subtract Line 15, Column B, from Line 15, Column A and write the result here.
	 	 If the amount is positive, continue to Line 17.
		 If the amount is zero or negative, stop here. Write “0” on Line 3, 					
		 and continue to Line 4. You do not qualify for the additional credit.	
	
16	
	17	 Divide Line 16 by Line 15, Column B. Round the result to six decimal places and write the amount here. 				
		 If the amount is .01 or larger, stop here and write the amount from Line 2, Column H, 					
		 on Line 3. If this amount is less than .01, continue to Line 18.	
	
17	
	18	 Multiply Line 17 by 50% (.50). Round to six decimal places and write here. 	 	
			
18	
	19	 Multiply Line 2, Column G, by Line 18, and write the result here and on Line 3.				
	
19	

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IL-477 (R-12/12)

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Page 2 of 4

This form is authorized as outlined by the Illinois Income Tax Act. Disclosure of this
information is REQUIRED. Failure to provide information could result in a penalty.

IL-477 (R-12/12)

Form IL-477 Instructions
General Information

What if I need additional assistance?

Complete this form if you are a corporation, S corporation,
partnership, trust, or exempt organization subject to replacement tax
and are entitled to a replacement tax investment credit.

If you need additional assistance,

If you are filing an Illinois combined unitary return, complete one
Form IL-477, Replacement Tax Investment Credit, for the entire
combined group.

•	call our Taxpayer Assistance Division, at 1 800 732‑8866 or 		
	 217 782-3336; or

For tax years ending on or after December 31, 2000,
investment credits earned by you and allocable to your partners and
shareholders subject to replacement tax automatically flow through
to those partners and shareholders. The amount allocable to other
partners and shareholders remains with you.

How do I qualify for a credit?
You may take this credit if you
	 •	placed qualified property in service in Illinois within the tax year,

•	 visit our website at tax.illinois.gov;
•	write to us at P.O. Box 19044, Springfield, Illinois 62794-9044;

•	call our TDD (telecommunications device for the deaf) at 		
	 1 800 544-5304.
Our office hours are 8:00 a.m. to 5:00 p.m., Monday through Friday.

Specific Instructions
Step 1— 	Figure your Replacement Tax 		
	
Investment Credit for qualified property 	
	
placed in service during the tax year
Lines 1a through 1c — Follow the instructions for each column.

	 •	continue to use the qualified property on the last day of your tax 	
	 year, and

Column A — Describe each item of qualified property you placed

	 •	are primarily (more than 50 percent) engaged in manufacturing, 	
	 mining coal or fluorite, or retailing.

Column B — Write the date, including month and year, each item

This credit includes
	 •	an amount equal to .5 percent (.005) of the basis of qualified 	
	 property ­placed in service in Illinois during your tax year, and
	 • 	an additional credit of up to .5 percent (.005) of the basis of 		
	 qualified property placed in service during your tax year, if your 	
	 Illinois base employment increased over the preceding year, or if 	
	 your business is new to Illinois.

in service in Illinois.
of qualified property was placed in service in Illinois. An item is
placed in service on the earlier of
	 •	the date the item is placed in a condition or state of readiness 	
	 and availability for its specifically assigned function, or
	 •	the date the item is placed in service for purposes of the federal 	
	 depreciation deduction. Improvements to a qualified property are 	
	 placed in service, for purposes of this credit, on the date the 	
	 improvements are placed in service for the federal depreciation 	
	 deduction.
The date placed in service in Illinois must be written in
­Column B or your basis in Column G will be reduced to zero.

“Qualified property” is property that

•	 is tangible;
•	 is depreciable according to IRC Section 167;
•	 has a useful life of four or more years as of the date placed in
service in Illinois; and

•	 is acquired by purchase as defined in IRC Section 179(d).
Qualified property can be new or used but does not qualify for the
Replacement Tax Investment Credit if it was previously used in
Illinois in a manner that qualified for that credit or for the Enterprise
Zone or River Edge Redevelopment Zone Investment Credit
on Illinois Schedule 1299-A or 1299-D. Such property includes
buildings, structural components of buildings, and signs that are
real property. It does not include land or improvements to real
property that are not a structural component of a building, such
as landscaping, sewer lines, local access roads, fencing, parking
lots, and other appurtenances.
Any improvement or addition made after the property is placed
in service is considered to be qualified property to the extent
that the i­mprovement or addition increases the adjusted basis of
the property, and otherwise meets the requirements of qualified
property.

IL-477 (R-12/12)

Column C — If you are using the modified accelerated cost
recovery system, (MACRS) to depreciate the property, write the
MACRS class assigned to each item of qualified property. Property
assigned to a MACRS class of less than four years is not qualified
property.
If you are not using the MACRS method to depreciate the property,
write the useful life assigned to the property for federal depreciation
purposes. The useful life of the property, when placed in service,
must be four or more years to qualify.

Column D — Indicate whether each item of qualified property
is new or used. If the property was previously used, write the
abbreviation of the state where the property was located.

Column E — Indicate your primary business activity. Write the
corresponding number of the following functions on the line.
	

• 1 — retailing	

	

• 2 — manufacturing

	

• 3 — coal mining 	

• 4 — fluorite mining

Column F — Write the municipality or county, if the area is
unincorporated, where each item of qualified property was used.

Page 3 of 4

Column G — For each item of property, write the basis used to
figure the depreciation deduction for federal income tax purposes.
Generally, the basis will be the purchase price of the property, plus
any capital expenditures, minus any rebates and IRC Section 179
expense. The basis is not reduced by depreciation, including bonus
depreciation, except for depreciation you were allowed to claim on an
asset you used in another state prior to bringing it to Illinois.

Column H — Multiply each entry by .5 percent (.005) and write the
result.

Line 2 — Write the total of Column G and the total of Column H
from all attached pages of Form IL-477.

Line 3 — If your business is new to Illinois, write the amount
from Line 2, Column H, and check the box above Line 13. Do not
complete Lines 13 through 19.
If your business is not new to Illinois and your base employment
	 •	did not increase over the preceding year, write “0” and 	
	
	 continue to Line 4; or
	 •	increased from the preceding year, complete Step 2 before 	 	
	 making an entry.

Line 4 — Write the distributive share of replacement tax
investment credit distributed from partnerships and S corporations.
Attach copies of the Schedules K-1-P you received from the
partnerships and S corporations.
	 Complete Line 4 only if you are a partner in a
partnership or a shareholder in an S corporation. All other
corporations and trusts write zero.

Line 6 — To figure the percentage of total ownership in the
partnership or S corporation attributable to partners or shareholders
subject to replacement tax divide the amount on Form IL-1065 or
IL-1120-ST, Schedule B, Line 7, by the total of the amount from
Schedule B, Line 7, plus your base income from Forms IL-1065
or IL-1120-ST, Line 35. Multiply this fraction by the amount on this
Form IL-477, Line 5, and write the result on Line 6.

Line 8 — Write the amount of credit carryforward from your prior
year Form IL-477. Do not include any excess credit earned that is
more than 5 years old. For example, if your tax year ends December
31, 2012, do not include any excess credit earned in tax years ending
prior to December 31, 2007.

Line 10 — Write the total replacement tax (after recapture of the
replacement tax investment credit) from your
•	Form IL-1120, Line 42	
•	Form IL-1120-ST, Line 54	
•	Form IL-1065, Line 56	

•	Form IL-1041, Line 36
•	Form IL-990-T, Line 15
•	Form IL-1023-C, Line 12

Line 11 — Write the lesser of Line 9 or Line 10 here and on your
•	Form IL-1120, Line 43	
•	Form IL-1120-ST, Line 55	
•	Form IL-1065, Line 57	

•	Form IL-1041, Line 37
•	Form IL-990-T, Line 16
•	Form IL-1023-C, Line 13

Line 12 — Subtract Line 11 from Line 9. This is the amount of
excess credit available to be carried forward five years.

Step 2 —	Figure your base employment 		
	
calculation worksheet
Lines 13 through 19 — Follow the instructions on the form.

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IL-477 (R-12/12)