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90_HB0478
35 ILCS 5/203 from Ch. 120, par. 2-203
35 ILCS 5/204 from Ch. 120, par. 2-204
35 ILCS 5/211 new
Amends the Illinois Income Tax Act. Allows individual
taxpayers who are 65 years of age or older a deduction for
unreimbursed amounts spent on home health care services for
taxable years beginning on or after January 1, 1997 and
ending on or before December 30, 2002. Provides that,
beginning with taxable years beginning on or after January 1,
1997 and ending with taxable years ending on or before
December 30, 2002, each taxpayer shall be entitled to a tax
credit against the income tax equal to 5% of the
expenditures by the taxpayer for child care for a child in
the taxpayer's custody. Grants individual taxpayers,
beginning with taxable years beginning on or after January 1,
1997 and ending with taxable years ending on or before
December 30, 2002, an additional basic amount standard
exemption of $1,000 and an additional exemption in the amount
of $1,000 for each exemption in excess of one allowable to an
individual taxpayer. Effective immediately.
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1 AN ACT to amend the Illinois Income Tax Act by changing
2 Sections 203 and 204 and adding Section 211.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Illinois Income Tax Act is amended by
6 changing Sections 203 and 204 and adding Section 211 as
7 follows:
8 (35 ILCS 5/203) (from Ch. 120, par. 2-203)
9 Sec. 203. Base income defined.
10 (a) Individuals.
11 (1) In general. In the case of an individual, base
12 income means an amount equal to the taxpayer's adjusted
13 gross income for the taxable year as modified by
14 paragraph (2).
15 (2) Modifications. The adjusted gross income
16 referred to in paragraph (1) shall be modified by adding
17 thereto the sum of the following amounts:
18 (A) An amount equal to all amounts paid or
19 accrued to the taxpayer as interest or dividends
20 during the taxable year to the extent excluded from
21 gross income in the computation of adjusted gross
22 income, except stock dividends of qualified public
23 utilities described in Section 305(e) of the
24 Internal Revenue Code;
25 (B) An amount equal to the amount of tax
26 imposed by this Act to the extent deducted from
27 gross income in the computation of adjusted gross
28 income for the taxable year;
29 (C) An amount equal to the amount received
30 during the taxable year as a recovery or refund of
31 real property taxes paid with respect to the
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1 taxpayer's principal residence under the Revenue Act
2 of 1939 and for which a deduction was previously
3 taken under subparagraph (L) of this paragraph (2)
4 prior to July 1, 1991, the retrospective application
5 date of Article 4 of Public Act 87-17. In the case
6 of multi-unit or multi-use structures and farm
7 dwellings, the taxes on the taxpayer's principal
8 residence shall be that portion of the total taxes
9 for the entire property which is attributable to
10 such principal residence;
11 (D) An amount equal to the amount of the
12 capital gain deduction allowable under the Internal
13 Revenue Code, to the extent deducted from gross
14 income in the computation of adjusted gross income;
15 and
16 (D-5) An amount, to the extent not included in
17 adjusted gross income, equal to the amount of money
18 withdrawn by the taxpayer in the taxable year from a
19 medical care savings account and the interest earned
20 on the account in the taxable year of a withdrawal
21 pursuant to subsection (b) of Section 20 of the
22 Medical Care Savings Account Act;
23 and by deducting from the total so obtained the sum of
24 the following amounts:
25 (E) Any amount included in such total in
26 respect of any compensation (including but not
27 limited to any compensation paid or accrued to a
28 serviceman while a prisoner of war or missing in
29 action) paid to a resident by reason of being on
30 active duty in the Armed Forces of the United States
31 and in respect of any compensation paid or accrued
32 to a resident who as a governmental employee was a
33 prisoner of war or missing in action, and in respect
34 of any compensation paid to a resident in 1971 or
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1 thereafter for annual training performed pursuant to
2 Sections 502 and 503, Title 32, United States Code
3 as a member of the Illinois National Guard;
4 (F) An amount equal to all amounts included in
5 such total pursuant to the provisions of Sections
6 402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and
7 408 of the Internal Revenue Code, or included in
8 such total as distributions under the provisions of
9 any retirement or disability plan for employees of
10 any governmental agency or unit, or retirement
11 payments to retired partners, which payments are
12 excluded in computing net earnings from self
13 employment by Section 1402 of the Internal Revenue
14 Code and regulations adopted pursuant thereto;
15 (G) The valuation limitation amount;
16 (H) An amount equal to the amount of any tax
17 imposed by this Act which was refunded to the
18 taxpayer and included in such total for the taxable
19 year;
20 (I) An amount equal to all amounts included in
21 such total pursuant to the provisions of Section 111
22 of the Internal Revenue Code as a recovery of items
23 previously deducted from adjusted gross income in
24 the computation of taxable income;
25 (J) An amount equal to those dividends
26 included in such total which were paid by a
27 corporation which conducts business operations in an
28 Enterprise Zone or zones created under the Illinois
29 Enterprise Zone Act, and conducts substantially all
30 of its operations in an Enterprise Zone or zones;
31 (K) An amount equal to those dividends
32 included in such total that were paid by a
33 corporation that conducts business operations in a
34 federally designated Foreign Trade Zone or Sub-Zone
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1 and that is designated a High Impact Business
2 located in Illinois; provided that dividends
3 eligible for the deduction provided in subparagraph
4 (J) of paragraph (2) of this subsection shall not be
5 eligible for the deduction provided under this
6 subparagraph (K);
7 (L) For taxable years ending after December
8 31, 1983, an amount equal to all social security
9 benefits and railroad retirement benefits included
10 in such total pursuant to Sections 72(r) and 86 of
11 the Internal Revenue Code;
12 (M) With the exception of any amounts
13 subtracted under subparagraph (N), an amount equal
14 to the sum of all amounts disallowed as deductions
15 by Sections 171(a) (2), and 265(2) of the Internal
16 Revenue Code of 1954, as now or hereafter amended,
17 and all amounts of expenses allocable to interest
18 and disallowed as deductions by Section 265(1) of
19 the Internal Revenue Code of 1954, as now or
20 hereafter amended;
21 (N) An amount equal to all amounts included in
22 such total which are exempt from taxation by this
23 State either by reason of its statutes or
24 Constitution or by reason of the Constitution,
25 treaties or statutes of the United States; provided
26 that, in the case of any statute of this State that
27 exempts income derived from bonds or other
28 obligations from the tax imposed under this Act, the
29 amount exempted shall be the interest net of bond
30 premium amortization;
31 (O) An amount equal to any contribution made
32 to a job training project established pursuant to
33 the Tax Increment Allocation Redevelopment Act;
34 (P) An amount equal to the amount of the
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1 deduction used to compute the federal income tax
2 credit for restoration of substantial amounts held
3 under claim of right for the taxable year pursuant
4 to Section 1341 of the Internal Revenue Code of
5 1986;
6 (Q) An amount equal to any amounts included in
7 such total, received by the taxpayer as an
8 acceleration in the payment of life, endowment or
9 annuity benefits in advance of the time they would
10 otherwise be payable as an indemnity for a terminal
11 illness;
12 (R) An amount equal to the amount of any
13 federal or State bonus paid to veterans of the
14 Persian Gulf War;
15 (S) An amount, to the extent included in
16 adjusted gross income, equal to the amount of a
17 contribution made in the taxable year on behalf of
18 the taxpayer to a medical care savings account
19 established under the Medical Care Savings Account
20 Act to the extent the contribution is accepted by
21 the account administrator as provided in that Act;
22 (T) An amount, to the extent included in
23 adjusted gross income, equal to the amount of
24 interest earned in the taxable year on a medical
25 care savings account established under the Medical
26 Care Savings Account Act on behalf of the taxpayer,
27 other than interest added pursuant to item (D-5) of
28 this paragraph (2);
29 (U) For one taxable year beginning on or after
30 January 1, 1994, an amount equal to the total amount
31 of tax imposed and paid under subsections (a) and
32 (b) of Section 201 of this Act on grant amounts
33 received by the taxpayer under the Nursing Home
34 Grant Assistance Act during the taxpayer's taxable
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1 years 1992 and 1993; and
2 (V) Beginning with tax years ending on or
3 after December 31, 1995 and ending with tax years
4 ending on or before December 31, 1999, an amount
5 equal to the amount paid by a taxpayer who is a
6 self-employed taxpayer, a partner of a partnership,
7 or a shareholder in a Subchapter S corporation for
8 health insurance or long-term care insurance for
9 that taxpayer or that taxpayer's spouse or
10 dependents, to the extent that the amount paid for
11 that health insurance or long-term care insurance
12 may be deducted under Section 213 of the Internal
13 Revenue Code of 1986, has not been deducted on the
14 federal income tax return of the taxpayer, and does
15 not exceed the taxable income attributable to that
16 taxpayer's income, self-employment income, or
17 Subchapter S corporation income; except that no
18 deduction shall be allowed under this item (V) if
19 the taxpayer is eligible to participate in any
20 health insurance or long-term care insurance plan of
21 an employer of the taxpayer or the taxpayer's
22 spouse. The amount of the health insurance and
23 long-term care insurance subtracted under this item
24 (V) shall be determined by multiplying total health
25 insurance and long-term care insurance premiums paid
26 by the taxpayer times a number that represents the
27 fractional percentage of eligible medical expenses
28 under Section 213 of the Internal Revenue Code of
29 1986 not actually deducted on the taxpayer's federal
30 income tax return; and.
31 (W) Beginning with taxable years beginning on
32 or after January 1, 1997 and ending with taxable
33 years ending on or before December 30, 2002, all
34 unreimbursed amounts, but not more than a total
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1 amount that would result in a tax liability of less
2 than zero for the taxpayer, expended by persons 65
3 years of age or older for home health services, as
4 defined by Section 2.05 of the Home Health Agency
5 Licensing Act, if provided by a public or private
6 organization licensed under that Act, or for
7 services provided to a person at that person's
8 residence by a licensed practical nurse or a
9 registered nurse in accordance with a plan of
10 treatment for illness or infirmity prescribed by a
11 physician.
12 (b) Corporations.
13 (1) In general. In the case of a corporation, base
14 income means an amount equal to the taxpayer's taxable
15 income for the taxable year as modified by paragraph (2).
16 (2) Modifications. The taxable income referred to
17 in paragraph (1) shall be modified by adding thereto the
18 sum of the following amounts:
19 (A) An amount equal to all amounts paid or
20 accrued to the taxpayer as interest and all
21 distributions received from regulated investment
22 companies during the taxable year to the extent
23 excluded from gross income in the computation of
24 taxable income;
25 (B) An amount equal to the amount of tax
26 imposed by this Act to the extent deducted from
27 gross income in the computation of taxable income
28 for the taxable year;
29 (C) In the case of a regulated investment
30 company or real estate investment trust, an amount
31 equal to the excess of (i) the net long-term capital
32 gain for the taxable year, over (ii) the amount of
33 the capital gain dividends designated as such in
34 accordance with Section 852(b)(3)(C) or Section
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1 857(b)(3)(C) of the Internal Revenue Code and any
2 amount designated under Section 852(b)(3)(D) of the
3 Internal Revenue Code, attributable to the taxable
4 year.
5 This amendatory Act of 1995 is declarative of existing
6 law and is not a new enactment.
7 (D) The amount of any net operating loss
8 deduction taken in arriving at taxable income, other
9 than a net operating loss carried forward from a
10 taxable year ending prior to December 31, 1986; and
11 (E) For taxable years in which a net operating
12 loss carryback or carryforward from a taxable year
13 ending prior to December 31, 1986 is an element of
14 taxable income under paragraph (1) of subsection (e)
15 or subparagraph (E) of paragraph (2) of subsection
16 (e), the amount by which addition modifications
17 other than those provided by this subparagraph (E)
18 exceeded subtraction modifications in such earlier
19 taxable year, with the following limitations applied
20 in the order that they are listed:
21 (i) the addition modification relating to
22 the net operating loss carried back or forward
23 to the taxable year from any taxable year
24 ending prior to December 31, 1986 shall be
25 reduced by the amount of addition modification
26 under this subparagraph (E) which related to
27 that net operating loss and which was taken
28 into account in calculating the base income of
29 an earlier taxable year, and
30 (ii) the addition modification relating
31 to the net operating loss carried back or
32 forward to the taxable year from any taxable
33 year ending prior to December 31, 1986 shall
34 not exceed the amount of such carryback or
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1 carryforward;
2 For taxable years in which there is a net
3 operating loss carryback or carryforward from more
4 than one other taxable year ending prior to December
5 31, 1986, the addition modification provided in this
6 subparagraph (E) shall be the sum of the amounts
7 computed independently under the preceding
8 provisions of this subparagraph (E) for each such
9 taxable year,
10 and by deducting from the total so obtained the sum of
11 the following amounts:
12 (F) An amount equal to the amount of any tax
13 imposed by this Act which was refunded to the
14 taxpayer and included in such total for the taxable
15 year;
16 (G) An amount equal to any amount included in
17 such total under Section 78 of the Internal Revenue
18 Code;
19 (H) In the case of a regulated investment
20 company, an amount equal to the amount of exempt
21 interest dividends as defined in subsection (b) (5)
22 of Section 852 of the Internal Revenue Code, paid to
23 shareholders for the taxable year;
24 (I) With the exception of any amounts
25 subtracted under subparagraph (J), an amount equal
26 to the sum of all amounts disallowed as deductions
27 by Sections 171(a) (2), and 265(a)(2) and amounts
28 disallowed as interest expense by Section 291(a)(3)
29 of the Internal Revenue Code, as now or hereafter
30 amended, and all amounts of expenses allocable to
31 interest and disallowed as deductions by Section
32 265(a)(1) of the Internal Revenue Code, as now or
33 hereafter amended;
34 (J) An amount equal to all amounts included in
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1 such total which are exempt from taxation by this
2 State either by reason of its statutes or
3 Constitution or by reason of the Constitution,
4 treaties or statutes of the United States; provided
5 that, in the case of any statute of this State that
6 exempts income derived from bonds or other
7 obligations from the tax imposed under this Act, the
8 amount exempted shall be the interest net of bond
9 premium amortization;
10 (K) An amount equal to those dividends
11 included in such total which were paid by a
12 corporation which conducts business operations in an
13 Enterprise Zone or zones created under the Illinois
14 Enterprise Zone Act and conducts substantially all
15 of its operations in an Enterprise Zone or zones;
16 (L) An amount equal to those dividends
17 included in such total that were paid by a
18 corporation that conducts business operations in a
19 federally designated Foreign Trade Zone or Sub-Zone
20 and that is designated a High Impact Business
21 located in Illinois; provided that dividends
22 eligible for the deduction provided in subparagraph
23 (K) of paragraph 2 of this subsection shall not be
24 eligible for the deduction provided under this
25 subparagraph (L);
26 (M) For any taxpayer that is a financial
27 organization within the meaning of Section 304(c) of
28 this Act, an amount included in such total as
29 interest income from a loan or loans made by such
30 taxpayer to a borrower, to the extent that such a
31 loan is secured by property which is eligible for
32 the Enterprise Zone Investment Credit. To determine
33 the portion of a loan or loans that is secured by
34 property eligible for a Section 201(h) investment
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1 credit to the borrower, the entire principal amount
2 of the loan or loans between the taxpayer and the
3 borrower should be divided into the basis of the
4 Section 201(h) investment credit property which
5 secures the loan or loans, using for this purpose
6 the original basis of such property on the date that
7 it was placed in service in the Enterprise Zone.
8 The subtraction modification available to taxpayer
9 in any year under this subsection shall be that
10 portion of the total interest paid by the borrower
11 with respect to such loan attributable to the
12 eligible property as calculated under the previous
13 sentence;
14 (M-1) For any taxpayer that is a financial
15 organization within the meaning of Section 304(c) of
16 this Act, an amount included in such total as
17 interest income from a loan or loans made by such
18 taxpayer to a borrower, to the extent that such a
19 loan is secured by property which is eligible for
20 the High Impact Business Investment Credit. To
21 determine the portion of a loan or loans that is
22 secured by property eligible for a Section 201(i)
23 investment credit to the borrower, the entire
24 principal amount of the loan or loans between the
25 taxpayer and the borrower should be divided into the
26 basis of the Section 201(i) investment credit
27 property which secures the loan or loans, using for
28 this purpose the original basis of such property on
29 the date that it was placed in service in a
30 federally designated Foreign Trade Zone or Sub-Zone
31 located in Illinois. No taxpayer that is eligible
32 for the deduction provided in subparagraph (M) of
33 paragraph (2) of this subsection shall be eligible
34 for the deduction provided under this subparagraph
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1 (M-1). The subtraction modification available to
2 taxpayers in any year under this subsection shall be
3 that portion of the total interest paid by the
4 borrower with respect to such loan attributable to
5 the eligible property as calculated under the
6 previous sentence;
7 (N) Two times any contribution made during the
8 taxable year to a designated zone organization to
9 the extent that the contribution (i) qualifies as a
10 charitable contribution under subsection (c) of
11 Section 170 of the Internal Revenue Code and (ii)
12 must, by its terms, be used for a project approved
13 by the Department of Commerce and Community Affairs
14 under Section 11 of the Illinois Enterprise Zone
15 Act;
16 (O) An amount equal to: (i) 85% for taxable
17 years ending on or before December 31, 1992, or, a
18 percentage equal to the percentage allowable under
19 Section 243(a)(1) of the Internal Revenue Code of
20 1986 for taxable years ending after December 31,
21 1992, of the amount by which dividends included in
22 taxable income and received from a corporation that
23 is not created or organized under the laws of the
24 United States or any state or political subdivision
25 thereof, including, for taxable years ending on or
26 after December 31, 1988, dividends received or
27 deemed received or paid or deemed paid under
28 Sections 951 through 964 of the Internal Revenue
29 Code, exceed the amount of the modification provided
30 under subparagraph (G) of paragraph (2) of this
31 subsection (b) which is related to such dividends;
32 plus (ii) 100% of the amount by which dividends,
33 included in taxable income and received, including,
34 for taxable years ending on or after December 31,
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1 1988, dividends received or deemed received or paid
2 or deemed paid under Sections 951 through 964 of the
3 Internal Revenue Code, from any such corporation
4 specified in clause (i) that would but for the
5 provisions of Section 1504 (b) (3) of the Internal
6 Revenue Code be treated as a member of the
7 affiliated group which includes the dividend
8 recipient, exceed the amount of the modification
9 provided under subparagraph (G) of paragraph (2) of
10 this subsection (b) which is related to such
11 dividends;
12 (P) An amount equal to any contribution made
13 to a job training project established pursuant to
14 the Tax Increment Allocation Redevelopment Act; and
15 (Q) An amount equal to the amount of the
16 deduction used to compute the federal income tax
17 credit for restoration of substantial amounts held
18 under claim of right for the taxable year pursuant
19 to Section 1341 of the Internal Revenue Code of
20 1986.
21 (3) Special rule. For purposes of paragraph (2)
22 (A), "gross income" in the case of a life insurance
23 company, for tax years ending on and after December 31,
24 1994, shall mean the gross investment income for the
25 taxable year.
26 (c) Trusts and estates.
27 (1) In general. In the case of a trust or estate,
28 base income means an amount equal to the taxpayer's
29 taxable income for the taxable year as modified by
30 paragraph (2).
31 (2) Modifications. Subject to the provisions of
32 paragraph (3), the taxable income referred to in
33 paragraph (1) shall be modified by adding thereto the sum
34 of the following amounts:
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1 (A) An amount equal to all amounts paid or
2 accrued to the taxpayer as interest or dividends
3 during the taxable year to the extent excluded from
4 gross income in the computation of taxable income;
5 (B) In the case of (i) an estate, $600; (ii) a
6 trust which, under its governing instrument, is
7 required to distribute all of its income currently,
8 $300; and (iii) any other trust, $100, but in each
9 such case, only to the extent such amount was
10 deducted in the computation of taxable income;
11 (C) An amount equal to the amount of tax
12 imposed by this Act to the extent deducted from
13 gross income in the computation of taxable income
14 for the taxable year;
15 (D) The amount of any net operating loss
16 deduction taken in arriving at taxable income, other
17 than a net operating loss carried forward from a
18 taxable year ending prior to December 31, 1986;
19 (E) For taxable years in which a net operating
20 loss carryback or carryforward from a taxable year
21 ending prior to December 31, 1986 is an element of
22 taxable income under paragraph (1) of subsection (e)
23 or subparagraph (E) of paragraph (2) of subsection
24 (e), the amount by which addition modifications
25 other than those provided by this subparagraph (E)
26 exceeded subtraction modifications in such taxable
27 year, with the following limitations applied in the
28 order that they are listed:
29 (i) the addition modification relating to
30 the net operating loss carried back or forward
31 to the taxable year from any taxable year
32 ending prior to December 31, 1986 shall be
33 reduced by the amount of addition modification
34 under this subparagraph (E) which related to
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1 that net operating loss and which was taken
2 into account in calculating the base income of
3 an earlier taxable year, and
4 (ii) the addition modification relating
5 to the net operating loss carried back or
6 forward to the taxable year from any taxable
7 year ending prior to December 31, 1986 shall
8 not exceed the amount of such carryback or
9 carryforward;
10 For taxable years in which there is a net
11 operating loss carryback or carryforward from more
12 than one other taxable year ending prior to December
13 31, 1986, the addition modification provided in this
14 subparagraph (E) shall be the sum of the amounts
15 computed independently under the preceding
16 provisions of this subparagraph (E) for each such
17 taxable year;
18 (F) For taxable years ending on or after
19 January 1, 1989, an amount equal to the tax deducted
20 pursuant to Section 164 of the Internal Revenue Code
21 if the trust or estate is claiming the same tax for
22 purposes of the Illinois foreign tax credit under
23 Section 601 of this Act; and
24 (G) An amount equal to the amount of the
25 capital gain deduction allowable under the Internal
26 Revenue Code, to the extent deducted from gross
27 income in the computation of taxable income;
28 and by deducting from the total so obtained the sum of
29 the following amounts:
30 (H) An amount equal to all amounts included in
31 such total pursuant to the provisions of Sections
32 402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and
33 408 of the Internal Revenue Code or included in such
34 total as distributions under the provisions of any
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1 retirement or disability plan for employees of any
2 governmental agency or unit, or retirement payments
3 to retired partners, which payments are excluded in
4 computing net earnings from self employment by
5 Section 1402 of the Internal Revenue Code and
6 regulations adopted pursuant thereto;
7 (I) The valuation limitation amount;
8 (J) An amount equal to the amount of any tax
9 imposed by this Act which was refunded to the
10 taxpayer and included in such total for the taxable
11 year;
12 (K) An amount equal to all amounts included in
13 taxable income as modified by subparagraphs (A),
14 (B), (C), (D), (E), (F) and (G) which are exempt
15 from taxation by this State either by reason of its
16 statutes or Constitution or by reason of the
17 Constitution, treaties or statutes of the United
18 States; provided that, in the case of any statute of
19 this State that exempts income derived from bonds or
20 other obligations from the tax imposed under this
21 Act, the amount exempted shall be the interest net
22 of bond premium amortization;
23 (L) With the exception of any amounts
24 subtracted under subparagraph (K), an amount equal
25 to the sum of all amounts disallowed as deductions
26 by Sections 171(a) (2) and 265(a)(2) of the Internal
27 Revenue Code, as now or hereafter amended, and all
28 amounts of expenses allocable to interest and
29 disallowed as deductions by Section 265(1) of the
30 Internal Revenue Code of 1954, as now or hereafter
31 amended;
32 (M) An amount equal to those dividends
33 included in such total which were paid by a
34 corporation which conducts business operations in an
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1 Enterprise Zone or zones created under the Illinois
2 Enterprise Zone Act and conducts substantially all
3 of its operations in an Enterprise Zone or Zones;
4 (N) An amount equal to any contribution made
5 to a job training project established pursuant to
6 the Tax Increment Allocation Redevelopment Act;
7 (O) An amount equal to those dividends
8 included in such total that were paid by a
9 corporation that conducts business operations in a
10 federally designated Foreign Trade Zone or Sub-Zone
11 and that is designated a High Impact Business
12 located in Illinois; provided that dividends
13 eligible for the deduction provided in subparagraph
14 (M) of paragraph (2) of this subsection shall not be
15 eligible for the deduction provided under this
16 subparagraph (O); and
17 (P) An amount equal to the amount of the
18 deduction used to compute the federal income tax
19 credit for restoration of substantial amounts held
20 under claim of right for the taxable year pursuant
21 to Section 1341 of the Internal Revenue Code of
22 1986.
23 (3) Limitation. The amount of any modification
24 otherwise required under this subsection shall, under
25 regulations prescribed by the Department, be adjusted by
26 any amounts included therein which were properly paid,
27 credited, or required to be distributed, or permanently
28 set aside for charitable purposes pursuant to Internal
29 Revenue Code Section 642(c) during the taxable year.
30 (d) Partnerships.
31 (1) In general. In the case of a partnership, base
32 income means an amount equal to the taxpayer's taxable
33 income for the taxable year as modified by paragraph (2).
34 (2) Modifications. The taxable income referred to
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1 in paragraph (1) shall be modified by adding thereto the
2 sum of the following amounts:
3 (A) An amount equal to all amounts paid or
4 accrued to the taxpayer as interest or dividends
5 during the taxable year to the extent excluded from
6 gross income in the computation of taxable income;
7 (B) An amount equal to the amount of tax
8 imposed by this Act to the extent deducted from
9 gross income for the taxable year; and
10 (C) The amount of deductions allowed to the
11 partnership pursuant to Section 707 (c) of the
12 Internal Revenue Code in calculating its taxable
13 income;
14 (D) An amount equal to the amount of the
15 capital gain deduction allowable under the Internal
16 Revenue Code, to the extent deducted from gross
17 income in the computation of taxable income;
18 and by deducting from the total so obtained the following
19 amounts:
20 (E) The valuation limitation amount;
21 (F) An amount equal to the amount of any tax
22 imposed by this Act which was refunded to the
23 taxpayer and included in such total for the taxable
24 year;
25 (G) An amount equal to all amounts included in
26 taxable income as modified by subparagraphs (A),
27 (B), (C) and (D) which are exempt from taxation by
28 this State either by reason of its statutes or
29 Constitution or by reason of the Constitution,
30 treaties or statutes of the United States; provided
31 that, in the case of any statute of this State that
32 exempts income derived from bonds or other
33 obligations from the tax imposed under this Act, the
34 amount exempted shall be the interest net of bond
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1 premium amortization;
2 (H) Any income of the partnership which
3 constitutes personal service income as defined in
4 Section 1348 (b) (1) of the Internal Revenue Code
5 (as in effect December 31, 1981) or a reasonable
6 allowance for compensation paid or accrued for
7 services rendered by partners to the partnership,
8 whichever is greater;
9 (I) An amount equal to all amounts of income
10 distributable to an entity subject to the Personal
11 Property Tax Replacement Income Tax imposed by
12 subsections (c) and (d) of Section 201 of this Act
13 including amounts distributable to organizations
14 exempt from federal income tax by reason of Section
15 501(a) of the Internal Revenue Code;
16 (J) With the exception of any amounts
17 subtracted under subparagraph (G), an amount equal
18 to the sum of all amounts disallowed as deductions
19 by Sections 171(a) (2), and 265(2) of the Internal
20 Revenue Code of 1954, as now or hereafter amended,
21 and all amounts of expenses allocable to interest
22 and disallowed as deductions by Section 265(1) of
23 the Internal Revenue Code, as now or hereafter
24 amended;
25 (K) An amount equal to those dividends
26 included in such total which were paid by a
27 corporation which conducts business operations in an
28 Enterprise Zone or zones created under the Illinois
29 Enterprise Zone Act, enacted by the 82nd General
30 Assembly, and which does not conduct such operations
31 other than in an Enterprise Zone or Zones;
32 (L) An amount equal to any contribution made
33 to a job training project established pursuant to
34 the Real Property Tax Increment Allocation
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1 Redevelopment Act;
2 (M) An amount equal to those dividends
3 included in such total that were paid by a
4 corporation that conducts business operations in a
5 federally designated Foreign Trade Zone or Sub-Zone
6 and that is designated a High Impact Business
7 located in Illinois; provided that dividends
8 eligible for the deduction provided in subparagraph
9 (K) of paragraph (2) of this subsection shall not be
10 eligible for the deduction provided under this
11 subparagraph (M); and
12 (N) An amount equal to the amount of the
13 deduction used to compute the federal income tax
14 credit for restoration of substantial amounts held
15 under claim of right for the taxable year pursuant
16 to Section 1341 of the Internal Revenue Code of
17 1986.
18 (e) Gross income; adjusted gross income; taxable income.
19 (1) In general. Subject to the provisions of
20 paragraph (2) and subsection (b) (3), for purposes of
21 this Section and Section 803(e), a taxpayer's gross
22 income, adjusted gross income, or taxable income for the
23 taxable year shall mean the amount of gross income,
24 adjusted gross income or taxable income properly
25 reportable for federal income tax purposes for the
26 taxable year under the provisions of the Internal Revenue
27 Code. Taxable income may be less than zero. However, for
28 taxable years ending on or after December 31, 1986, net
29 operating loss carryforwards from taxable years ending
30 prior to December 31, 1986, may not exceed the sum of
31 federal taxable income for the taxable year before net
32 operating loss deduction, plus the excess of addition
33 modifications over subtraction modifications for the
34 taxable year. For taxable years ending prior to December
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1 31, 1986, taxable income may never be an amount in excess
2 of the net operating loss for the taxable year as defined
3 in subsections (c) and (d) of Section 172 of the Internal
4 Revenue Code, provided that when taxable income of a
5 corporation (other than a Subchapter S corporation),
6 trust, or estate is less than zero and addition
7 modifications, other than those provided by subparagraph
8 (E) of paragraph (2) of subsection (b) for corporations
9 or subparagraph (E) of paragraph (2) of subsection (c)
10 for trusts and estates, exceed subtraction modifications,
11 an addition modification must be made under those
12 subparagraphs for any other taxable year to which the
13 taxable income less than zero (net operating loss) is
14 applied under Section 172 of the Internal Revenue Code or
15 under subparagraph (E) of paragraph (2) of this
16 subsection (e) applied in conjunction with Section 172 of
17 the Internal Revenue Code.
18 (2) Special rule. For purposes of paragraph (1) of
19 this subsection, the taxable income properly reportable
20 for federal income tax purposes shall mean:
21 (A) Certain life insurance companies. In the
22 case of a life insurance company subject to the tax
23 imposed by Section 801 of the Internal Revenue Code,
24 life insurance company taxable income, plus the
25 amount of distribution from pre-1984 policyholder
26 surplus accounts as calculated under Section 815a of
27 the Internal Revenue Code;
28 (B) Certain other insurance companies. In the
29 case of mutual insurance companies subject to the
30 tax imposed by Section 831 of the Internal Revenue
31 Code, insurance company taxable income;
32 (C) Regulated investment companies. In the
33 case of a regulated investment company subject to
34 the tax imposed by Section 852 of the Internal
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1 Revenue Code, investment company taxable income;
2 (D) Real estate investment trusts. In the
3 case of a real estate investment trust subject to
4 the tax imposed by Section 857 of the Internal
5 Revenue Code, real estate investment trust taxable
6 income;
7 (E) Consolidated corporations. In the case of
8 a corporation which is a member of an affiliated
9 group of corporations filing a consolidated income
10 tax return for the taxable year for federal income
11 tax purposes, taxable income determined as if such
12 corporation had filed a separate return for federal
13 income tax purposes for the taxable year and each
14 preceding taxable year for which it was a member of
15 an affiliated group. For purposes of this
16 subparagraph, the taxpayer's separate taxable income
17 shall be determined as if the election provided by
18 Section 243(b) (2) of the Internal Revenue Code had
19 been in effect for all such years;
20 (F) Cooperatives. In the case of a
21 cooperative corporation or association, the taxable
22 income of such organization determined in accordance
23 with the provisions of Section 1381 through 1388 of
24 the Internal Revenue Code;
25 (G) Subchapter S corporations. In the case
26 of: (i) a Subchapter S corporation for which there
27 is in effect an election for the taxable year under
28 Section 1362 of the Internal Revenue Code, the
29 taxable income of such corporation determined in
30 accordance with Section 1363(b) of the Internal
31 Revenue Code, except that taxable income shall take
32 into account those items which are required by
33 Section 1363(b)(1) of the Internal Revenue Code to
34 be separately stated; and (ii) a Subchapter S
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1 corporation for which there is in effect a federal
2 election to opt out of the provisions of the
3 Subchapter S Revision Act of 1982 and have applied
4 instead the prior federal Subchapter S rules as in
5 effect on July 1, 1982, the taxable income of such
6 corporation determined in accordance with the
7 federal Subchapter S rules as in effect on July 1,
8 1982; and
9 (H) Partnerships. In the case of a
10 partnership, taxable income determined in accordance
11 with Section 703 of the Internal Revenue Code,
12 except that taxable income shall take into account
13 those items which are required by Section 703(a)(1)
14 to be separately stated but which would be taken
15 into account by an individual in calculating his
16 taxable income.
17 (f) Valuation limitation amount.
18 (1) In general. The valuation limitation amount
19 referred to in subsections (a) (2) (G), (c) (2) (I) and
20 (d)(2) (E) is an amount equal to:
21 (A) The sum of the pre-August 1, 1969
22 appreciation amounts (to the extent consisting of
23 gain reportable under the provisions of Section 1245
24 or 1250 of the Internal Revenue Code) for all
25 property in respect of which such gain was reported
26 for the taxable year; plus
27 (B) The lesser of (i) the sum of the
28 pre-August 1, 1969 appreciation amounts (to the
29 extent consisting of capital gain) for all property
30 in respect of which such gain was reported for
31 federal income tax purposes for the taxable year, or
32 (ii) the net capital gain for the taxable year,
33 reduced in either case by any amount of such gain
34 included in the amount determined under subsection
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1 (a) (2) (F) or (c) (2) (H).
2 (2) Pre-August 1, 1969 appreciation amount.
3 (A) If the fair market value of property
4 referred to in paragraph (1) was readily
5 ascertainable on August 1, 1969, the pre-August 1,
6 1969 appreciation amount for such property is the
7 lesser of (i) the excess of such fair market value
8 over the taxpayer's basis (for determining gain) for
9 such property on that date (determined under the
10 Internal Revenue Code as in effect on that date), or
11 (ii) the total gain realized and reportable for
12 federal income tax purposes in respect of the sale,
13 exchange or other disposition of such property.
14 (B) If the fair market value of property
15 referred to in paragraph (1) was not readily
16 ascertainable on August 1, 1969, the pre-August 1,
17 1969 appreciation amount for such property is that
18 amount which bears the same ratio to the total gain
19 reported in respect of the property for federal
20 income tax purposes for the taxable year, as the
21 number of full calendar months in that part of the
22 taxpayer's holding period for the property ending
23 July 31, 1969 bears to the number of full calendar
24 months in the taxpayer's entire holding period for
25 the property.
26 (C) The Department shall prescribe such
27 regulations as may be necessary to carry out the
28 purposes of this paragraph.
29 (g) Double deductions. Unless specifically provided
30 otherwise, nothing in this Section shall permit the same item
31 to be deducted more than once.
32 (h) Legislative intention. Except as expressly provided
33 by this Section there shall be no modifications or
34 limitations on the amounts of income, gain, loss or deduction
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1 taken into account in determining gross income, adjusted
2 gross income or taxable income for federal income tax
3 purposes for the taxable year, or in the amount of such items
4 entering into the computation of base income and net income
5 under this Act for such taxable year, whether in respect of
6 property values as of August 1, 1969 or otherwise.
7 (Source: P.A. 88-195; 88-648, eff. 9-16-94; 88-669, eff.
8 11-29-94; 88-670, eff. 12-2-94; 89-89, eff. 6-30-95; 89-235,
9 eff. 8-4-95; 89-418, eff. 11-15-95; 89-460, eff. 5-24-96;
10 89-626, eff. 8-9-96.)
11 (35 ILCS 5/204) (from Ch. 120, par. 2-204)
12 Sec. 204. Standard Exemption.
13 (a) Allowance of exemption. In computing net income
14 under this Act, there shall be allowed as an exemption the
15 sum of the amounts determined under subsections (b), (c) and
16 (d), multiplied by a fraction the numerator of which is the
17 amount of the taxpayer's base income allocable to this State
18 for the taxable year and the denominator of which is the
19 taxpayer's total base income for the taxable year.
20 (b) Basic amount. For the purpose of subsection (a) of
21 this Section, except as provided by subsection (a) of Section
22 205 and in this subsection, each taxpayer shall be allowed a
23 basic amount of $1000. Beginning with taxable years beginning
24 on or after January 1, 1997 and ending with taxable years
25 ending on or before December 30, 2002, for the purpose of
26 subsection (a) of this Section, except as provided by
27 subsection (a) of Section 205 and in this subsection, each
28 individual taxpayer shall be allowed an additional basic
29 amount of $1,000. For taxable years ending on or after
30 December 31, 1992, a taxpayer whose Illinois base income
31 exceeds $1,000 and who is claimed as a dependent on another
32 person's tax return under the Internal Revenue Code of 1986
33 shall not be allowed any basic amount under this subsection.
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1 (c) Additional amount for individuals. In the case of an
2 individual taxpayer, there shall be allowed for the purpose
3 of subsection (a), in addition to the basic amount provided
4 by subsection (b), an additional exemption in the amount of
5 $1000 for each exemption in excess of one allowable to such
6 individual taxpayer for the taxable year under Section 151 of
7 the Internal Revenue Code.
8 (c-5) Beginning with taxable years beginning on or after
9 January 1, 1997 and ending with taxable years ending on or
10 before December 30, 2002, in the case of an individual
11 taxpayer, there shall be allowed for the purpose of
12 subsection (a), in addition to the basic and additional basic
13 amount provided in subsection (b) and the additional amount
14 for individuals provided in subsection (c), an additional
15 exemption in the amount of $1,000 for each exemption in
16 excess of one allowable to an individual taxpayer for the
17 taxable year under Section 151 of the Internal Revenue Code.
18 (d) Additional exemptions for an individual taxpayer and
19 his or her spouse. In the case of an individual taxpayer and
20 his or her spouse, he or she shall each be allowed additional
21 exemptions as follows:
22 (1) Additional exemption for taxpayer or spouse 65
23 years of age or older.
24 (A) For taxpayer. An additional exemption of
25 $1,000 for the taxpayer if he or she has attained
26 the age of 65 before the end of the taxable year.
27 (B) For spouse when a joint return is not
28 filed. An additional exemption of $1,000 for the
29 spouse of the taxpayer if a joint return is not made
30 by the taxpayer and his spouse, and if the spouse
31 has attained the age of 65 before the end of such
32 taxable year, and, for the calendar year in which
33 the taxable year of the taxpayer begins, has no
34 gross income and is not the dependent of another
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1 taxpayer.
2 (2) Additional exemption for blindness of taxpayer
3 or spouse.
4 (A) For taxpayer. An additional exemption of
5 $1,000 for the taxpayer if he or she is blind at the
6 end of the taxable year.
7 (B) For spouse when a joint return is not
8 filed. An additional exemption of $1,000 for the
9 spouse of the taxpayer if a separate return is made
10 by the taxpayer, and if the spouse is blind and, for
11 the calendar year in which the taxable year of the
12 taxpayer begins, has no gross income and is not the
13 dependent of another taxpayer. For purposes of this
14 paragraph, the determination of whether the spouse
15 is blind shall be made as of the end of the taxable
16 year of the taxpayer; except that if the spouse dies
17 during such taxable year such determination shall be
18 made as of the time of such death.
19 (C) Blindness defined. For purposes of this
20 subsection, an individual is blind only if his or
21 her central visual acuity does not exceed 20/200 in
22 the better eye with correcting lenses, or if his or
23 her visual acuity is greater than 20/200 but is
24 accompanied by a limitation in the fields of vision
25 such that the widest diameter of the visual fields
26 subtends an angle no greater than 20 degrees.
27 (e) Cross reference. See Article 3 for the manner of
28 determining base income allocable to this State.
29 (Source: P.A. 86-146; 87-880; 87-1246.)
30 (35 ILCS 5/211 new)
31 Sec. 211. Tax credit for child care. Beginning with
32 taxable years beginning on or after January 1, 1997 and
33 ending with taxable years ending on or before December 30,
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1 2002, each taxpayer shall be entitled to a tax credit against
2 the tax imposed by subsections (a) and (b) of Section 201 of
3 this Act equal to 5% of the expenditures by the taxpayer for
4 child care for a child in the taxpayer's custody. This credit
5 shall not reduce a taxpayer's tax liability to less than
6 zero.
7 Section 99. Effective date. This Act takes effect upon
8 becoming law.