Highlights for the 2017 Electronic Form IL-1040
More than 5.2 MILLION taxpayers chose an electronic method to file their 2016 Form IL-1040. If you, as a tax professional, do not currently offer the electronic filing option to your clients – start today and expand your client database. Electronic filing is the #1 choice for Illinois taxpayers. Call us at 1 866 440-8680, and we will provide you with one-on-one attention to get you set up to file your clients’ IL-1040 forms electronically.
Form IL-1040 Changes
- Effective July 1, 2017, the individual income tax rate increased from 3.75% (.0375) to 4.95% (.0495). The blended tax rate for 2017 calendar-year filers is 4.3549% (.043549).
- A checkbox has been added to indicate the completion of Schedule SA when calculating the income tax using specific accounting.
- The personal exemption allowance in Step 4 may not be claimed if the taxpayer’s adjusted gross income for the taxable year exceeds $500,000 for returns with a federal filing status of married filing jointly, or $250,000 for all other returns.
- Electronic returns submitted by paid preparers must contain the preparer tax identification number (PTIN), firm name, firm address, firm phone number, and firm FEIN (if not self-employed).
Schedule SA, Specific Accounting Method of Computing Net Income for Individuals
The Schedule SA will be accepted with an electronic IL-1040. It provides a means for calculating income and tax at separate rates due to the income tax rate change during the 2017 tax year.
Schedule M, Other Additions and Subtractions for individuals
Income attributable to domestic production activities under IRC Section 199 has been added as an addition modification.
Schedule ICR, Illinois Credits
- The maximum amount of the K-12 Education Expense Credit has been increased to $750 per family.
- Checkboxes have been added to indicate the school type (public, non-public, or home school) on the K-12 Education Expense Credit Worksheet.
- Both the K-12 Education Expense Credit and the Illinois Property Tax Credit are not allowed if the taxpayer’s adjusted gross income for the taxable year exceeds $500,000 for returns with a federal filing status of married filing jointly, or $250,000 for all other returns.
- The Earned Income Credit has been removed from Schedule ICR and is calculated on the new Schedule IL-EIC.
Schedule IL-EIC, Illinois Earned Income Credit
- IL-EIC is a new schedule created for taxpayers to claim the Illinois Earned Income Credit.
- The earned income credit has increased to 14% (.14) of the federal earned income tax credit.
- Taxpayers filing a federal return as married filing jointly who are filing their Illinois return as married filing separately may electronically file with an Illinois EIC.
Two new funds have been added to the Schedule G, the Thriving Youth Fund and the Criminal Justice Information Projects Fund.
Schedule 1299-C, Income Tax Subtractions and Credits (for individuals)
- The River Edge Redevelopment Zone Investment Credit, River Edge Redevelopment Zone Remediation Credit, and Veterans Job Credit have expired and been removed from Schedule 1299-C.
- The Research and Development Credit has been reinstated and added back to the schedule.
- Two new credits have been added to the Schedule 1299-C: Instructional Materials and Supplies Credit, and Other Credits. Both credits may be carried forward for five years.
Schedule K-1-P, Partner’s or Shareholder’s Share of Income, Deductions, Credits, and Recapture
- The River Edge Redevelopment Zone Investment Credit, River Edge Redevelopment Zone Remediation Credit, and Veterans Jobs Credit have been removed.
- The Research and Development Credit and Other Credits have been added.