Page 1 of 28IL-1065 Instructions (R-04/24)
Illinois Department of Revenue
IL-1065 Instructions 2023
Use for tax year ending on or
after December 31, 2023, and
before December 31, 2024.
Printed by the authority of the state of Illinois - electronic only - one copy.
What’s New?
• The address change checkbox has been removed from Step 1,
Line B, of the Form IL-1065.
• IL-4562 has been expanded and includes 60 percent bonus
depreciation.
• Investment partnerships are required to withhold partnership
income allocable to Illinois for their nonresident partners.
• Schedule K-1-P(4) has been created to calculate investment
partnership withholding for each of the investment partnership’s
nonresident partners.
• Schedule M has been expanded and includes a new subtraction
line for cannabis establishments that had deductions disallowed
federally under IRC Section 280E.
• Schedule B, Section B, has been reformatted from 4 columns to 3
columns.
• Illinois business payment vouchers are no longer year specic.
To avoid processing delays, taxpayers submitting paper business
vouchers to the Illinois Department of Revenue should ensure
that the month and year of their ling period are entered on each
voucher. Do not enter your estimated payment due date.
• Partnerships electing to make the election to pay pass-through
entity (PTE) tax may now deduct distributions to retired partners
when calculating base income subject to PTE tax.
Table of Contents
What’s New? ........................................................ 1
General Information ............................................ 1
Specic Instructions ........................................... 8
Apportionment Formulas .................................. 15
Illinois Schedule B Instructions ....................... 18
Appendix A - Extension Tax Payment
Worksheet .......................................................... 22
Appendix B - Pass-through Withholding
Prepayment Worksheets................................... 23
Appendix C - Estimated Payment and
Prepayment Worksheet..................................... 25
General Information
Who must le Form IL-1065?
You must le Form IL-1065, Partnership Replacement Tax Return,
if you are a partnership (see “Denitions to help you complete your
Form IL-1065”) and you have base income or loss as dened under
the Illinois Income Tax Act (IITA) allocable to Illinois.
If you are a partnership organized for the sole purpose of playing the
Illinois State Lottery, you are not required to le a Form IL-1065.
A person transacting an insurance business organized under a
Lloyd’s plan of operation may le a Form IL-1065 on behalf of all its
underwriters, including corporations and residents. You must refer to
86 Ill. Adm. Code Section 100.5130, for specic instructions on how
to properly complete Form IL-1065 and determine what you need to
attach to your return.
All underwriters who are members of an insurance business organized
under a Lloyd’s plan of operation may be included on Form IL-1065.
No credit is allowed to any underwriter for its share of tax paid on
Form IL-1065.
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 le penalties, a delay
in the processing of your return, or a delay in the generation
of any overpayment. Additionally, failure to submit appropriate
documentation when requested may result in a referral to our Audit
Bureau for compliance action.
Partnerships must complete Form IL-1065. 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.
If you are a member of a unitary business group, you may not le a
combined return, but you may have special ling requirements. See
the instructions for Illinois Schedule UB and “What if I am a member
of a unitary group?” in the general instructions below for information
about your ling requirements.
Form IL-1065 (R-12/23) is for tax year ending on or
after December 31, 2023, and before December 31, 2024. For
tax years ending on or after December 31, 2022, and before
December 31, 2023, use the 2022 form. Using the wrong form will
delay the processing of your return.
How do I register my business?
If you are required to le Form IL-1065, you should register with
IDOR. You may register
• online with MyTax Illinois, our free online account management
program for taxpayers;
• by completing Form REG-1, Illinois Business Registration
Application, and mailing it to the address on the form; or
• by visiting a regional oce.
Visit our website at tax.illinois.gov for more information.
Page 2 of 28IL-1065 Instructions (R-04/24)
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
IL-1065-V forms. You must use one of our electronic payment options
if IDOR has notied you that you are required to make payments
electronically.
We will apply each payment to the earliest due date until that liability
is paid, unless you provide specic instructions to apply it to another
period. You may also be assessed a bad check penalty if your
remittance is not honored by your nancial institution.
Who should sign the return?
Your Form IL-1065 must be signed by a partner or any other ocer
duly authorized to sign the return. In the case of a bankruptcy, a
receiver, trustee, or assignee must sign any return required to be
led on behalf of the partnership. The signature veries by written
declaration (and under penalties of perjury) that the signing individual
has personally examined the return and the return is true, correct,
and complete. The fact that an individual’s name is signed to a return
is prima facie evidence that the individual is authorized to sign the
return on behalf of the partnership.
If you are operating as a business organized under the Lloyd’s plan of
operation, an ocer of that plan must sign Form IL-1065.
Any person paid to prepare the return (other than a regular
employee of the taxpayer, such as a clerk, secretary, or bookkeeper)
must provide a signature, date the return, enter the preparer tax
identication number (PTIN) issued to them by the Internal Revenue
Service, and provide their rm’s name, FEIN, 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 led.
What are the penalties and interest?
Penalties — You will owe
• a late-ling penalty if you do not le 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 late-payment penalty for underpayment of estimated tax if
you were required to make estimated tax payments and failed to
do so, or failed to pay the required amount by the payment due
date;
• a bad check penalty if your remittance is not honored by your
nancial institution; and
• 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.
What if I am discontinuing my business?
Liquidation or withdrawal from Illinois — If you are a partnership
that is liquidated or withdraws either voluntarily or involuntarily from
Illinois during any tax year, you are still required to le tax returns.
Also, we will pursue the assessment and collection of any taxes
owed by you or your partners.
Registering with IDOR prior to ling your return ensures that your
tax returns are accurately processed.
Your identication numbers as an Illinois business taxpayer are
your federal employer identication number (FEIN) and your Illinois
account number.
When should I le?
In general, Form IL-1065 is due on or before the 15th day of the
4th month following the close of the tax year.
If you are operating as a business organized under the Lloyd’s plan
of operation, your due date is the same as your federal return due
date.
Automatic six-month extension — We grant you an automatic
six-month extension of time to le your partnership tax return. The
automatic extension of time to le is granted whether or not you
request it. You are not required to le 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 tax.illinois.gov, for information about ACH credit,
• pay using mytax.illinois.gov, or
• mail Form IL-1065-V, Payment Voucher for Partnership
Replacement Tax, using the address on the form.
If an unpaid liability is disclosed when you le 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 le your Form IL-1065 is not an extension of time for
payment of Illinois tax.
If you are operating as a business organized under the Lloyd’s plan
of operation, the length of your Illinois automatic extension of time to
le is the same as your federal extension.
Additional extensions beyond the automatic extension period —
We will grant an additional extension 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-1065.
When should I pay?
Payment of tax — You must pay your Illinois Replacement Tax and
pass-through withholding reported on behalf of your members or PTE
tax 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 ling your return has been granted. All
payments must be made using Form IL-1065-V, Payment Voucher
for Partnership Replacement Tax.
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-1065-V. See Appendix A for more information.
Estimated tax payments — Partnerships who elect to pay PTE
tax and reasonably expect their total tax liability to exceed $500 are
required to make estimated tax payments using Form IL-1065-V.
Estimated payments are due on the 15th day of the 4th, 6th, 9th, and
12th months of the tax year. All other partnerships are not required to
make estimated tax payments. See Appendix C for more information.
Voluntary Prepayments — Partnerships who do not elect to pay
PTE tax or partnerships who elect to pay PTE tax and reasonably
expect their total tax liability to be less than $500, may make
voluntary prepayments of their own tax liability using Form IL-1065-V.
Partnerships who do not elect to pay PTE tax may also use Form
IL-1065-V to make pass-through withholding prepayments on
behalf of your partner. See Appendix B and Appendix C for more
information.
Page 3 of 28IL-1065 Instructions (R-04/24)
Sales or transfers — If you are a partnership that, outside the usual
course of business, sells or transfers the major part of any one or more of
• the stock of goods which you are in the business of selling,
• the furniture or xtures 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 business days prior to the date the sale takes place. Send
this form, along with copies of the sales contract and nancing
agreement, to:
ILLINOIS DEPARTMENT OF REVENUE
BULK SALES UNIT
PO BOX 19035
SPRINGFIELD IL 62794-9035
or
What if I need to correct or change my return?
Do not le another Form IL-1065 with “amended” gures to change
your originally led Form IL-1065. If you need to correct or change
your return after it has been led, you must le Form IL-1065-X,
Amended Partnership Replacement Tax Return. Returns led before
the extended due date of the return are treated as your original
return for all purposes. For more information, see Form IL-1065-X
instructions.
You should le Form IL-1065-X only after you have led a processable
Illinois Income Tax return. You must le a separate Form IL-1065-X for
each tax year you wish to change.
State changes only — File Form IL-1065-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
• a mistake in transferring information from your federal return to your
Illinois return;
• failing to report or misreporting to Illinois an item that has no eect on
your federal return; or
• a mistake in another state’s tax return that aects the computation of
your Illinois tax liability.
If you are claiming an overpayment, Form IL-1065-X must be led within
three years after the extended due date or the date the return was led,
or within one year after the tax giving rise to the overpayment was paid,
whichever is latest.
Federal changes only — File Form IL-1065-X if you have led an
amended federal return or if you have been notied 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 aects any item entering into the computation of net income,
net loss, or any credit for any year under the IITA. You must le Form
IL-1065-X no later than 120 days after the federal changes have been
agreed to or nally 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 le
Form IL-1065-X within two years plus 120 days of federal nalization.
Attach a copy of federal nalization or proof of acceptance from the
IRS along with a copy of your amended federal form, if applicable, to
your Form IL-1065-X. Examples of federal nalization include a copy
of one or more of the following items:
• your audit report from the IRS and
• your federal record of account verifying your ordinary business
income.
For amended tax returns led on or after January 1, 2024,
a late payment penalty will be assessed for any amended return not
led and the resulting liability not paid within 120 days of the federal
change. See 35 ILCS 735/3-3(b-25) for more information.
What records must I keep?
You must maintain books and records to substantiate any information
reported on your Form IL-1065. Your books and records must be
available for inspection by our authorized agents and employees.
Do IDOR and the IRS exchange income
tax information?
The IRS and IDOR 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-1065 are
subject to verication and audit.
Should I round?
You must round the dollar amounts on Form IL-1065 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)?
An Illinois net loss deduction (NLD) can be used to reduce the base
income allocable to Illinois only if the loss year return has been led
and to the extent the loss was not used to oset income from any
other tax year. S corporations and partnerships, including any that
are members of a unitary group, trusts, and non-unitary corporations
should use the Illinois Schedule NLD, Illinois Net Loss Deduction, to
determine any NLD.
To determine your “Illinois net loss” start with federal taxable income
and apply all addition and subtraction modications and all allocation
and apportionment provisions.
In order to have any available NLD applied to your return, you must
claim the deduction on Step 7, Line 48. See specic instructions for
Step 7, Line 48.
If you have an Illinois net loss for this tax year, you must le Form
IL-1065 reporting the loss in order to carry the loss forward to
another year.
If corrections have been made to the loss amount (e.g., federal audit
or amended return), you must report the corrected amount when you
le.
Ensure you have led returns for all periods in which you
were required to le an Illinois return. Unled returns may result in
disallowed losses, processing delays, and further correspondence
from IDOR.
If you need more information about Illinois NLD, see Schedule
NLD instructions or the 86 Ill. Adm. Code Sections 100.2050
and 100.2300 through 100.2330, available on our website at
tax.illinois.gov.
What are the carry provisions of the Illinois NLD?
For tax years ending on or after December 31, 2021, Illinois net
losses cannot be carried back and can only be carried forward for
20 tax years.
For tax years ending on or after December 31, 2003, and before
December 31, 2021, Illinois net losses cannot be carried back, and
can only be carried forward for 12 years. However, the carryover
period of any net loss that had not expired as of November 16, 2021,
shall be extended from 12 years to 20 years.
Page 4 of 28IL-1065 Instructions (R-04/24)
For tax years ending on or after December 31, 1999, and before
December 31, 2003, all Illinois net losses must be carried back two
years (unless an election to only carry forward is made) then forward
20 years. The election to carry a loss forward only was made by
checking the appropriate box on the original or amended loss-year
return, whichever showed the loss rst. Once the election was made
to forgo the Illinois carryback provision, the election was irrevocable.
Losses incurred in tax years ending before December 31, 1999,
can be carried back and carried forward for the periods allowed
under Internal Revenue Code (IRC) Section 172, for the tax year in
which the loss was incurred. In general, losses incurred in tax years
beginning
• after August 5, 1997, and ending before December 31, 1999,
must be carried back two years, then forward 20 years.
• on or before August 5, 1997, must be carried back three years,
then forward 15 years.
For tax years ending on or after December 31, 1996, and
before December 31, 2003, you may have made the election to forgo
any of the previously mentioned Illinois NLD carryback periods by
checking the appropriate box on your loss year return. This election
must have been made by the extended due date of your return and
once made was irrevocable for that tax year.
In addition, the special carryover periods in IRC Section 172, as in
eect for a particular tax year, would apply to losses incurred in that
year. For example, a “specied liability loss” incurred in 1998 may be
carried back 10 years under IRC Section 172(b)(1)(c).
Also, no limitations under IRC Section 382 or the separate return
limitation year provisions of the federal consolidated return
regulations apply to any NLD carryover.
What is the standard exemption?
The standard exemption is $1,000 multiplied by a fraction in which
the numerator is your base income allocable to Illinois and the
denominator is your total base income. 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 rst or nal return, you are
allowed to use the full-year standard exemption even if it is a short
tax year. If you need further information, see 35 ILCS 401(b).
For tax years beginning on or after January 1, 2017, the
standard exemption may not be claimed if your unmodied base
income is $250,000 or more. See Specic Instructions for more
information.
What attachments do I need?
When ling your return there are certain types of income items
and subtraction modications that require the attachment of
Illinois or federal forms and schedules. Breakdowns, statements,
and other documentation may also be required. Instructions for
these attachments appear throughout the specic instructions for
completing your return.
If you are operating as a business organized under the Lloyd’s
plan of operation, refer to 86 Ill. Adm. Code Section 100.5130, to
determine what you need to attach to your Form IL-1065.
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 1065, Pages 1 through 5,
to your Illinois return if you are required to le federally.
Schedule B, Partners’ or Shareholders’ Information, must be
completed and attached to all Form IL-1065 lings.
You are required to attach any Schedule(s) K-1-P, Partner’s
or Shareholder’s Share of Income, Deductions, Credits, and
Recapture, and Schedule(s) K-1-T, Beneciary’s Share of Income
and Deductions, you receive. Attach Schedule(s) K-1-P and
K-1-T you received which lists your name and FEIN in Step 2 of
Schedule K-1-P or K-1-T. Do not attach copies of Schedule(s) K-1-P
you issued and which lists your name and FEIN in Step 1 of
Schedule K-1-P.
When ling your Form IL-1065, 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
Denitions to help you complete your Form IL-1065
All references to “income” include losses.
Base income means federal ordinary income plus separately stated
items, modied by additions and subtractions as shown in Steps
2 through 5 of Form IL-1065. See specic instructions for Steps 2
through 5.
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 partnership 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.
Commercial domicile means the principal place from which your
trade or business is directed or managed.
Nonbusiness income means all income other than business income
or compensation. For more information about the dierent types of
nonbusiness income, see the instructions for Illinois Schedule NB,
Nonbusiness Income.
A partnership is an entity that is treated as a partnership for federal
income tax purposes. A partnership that elects an IRC Section 761
exclusion from the federal partnership provisions is also excluded for
purposes of the IITA.
Partner includes a person treated as a partner for federal income tax
purposes.
A resident partner 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;
• 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 if the grantor was domiciled in Illinois at the
time the trust became irrevocable. For purposes of this denition,
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
the General Instructions for Form IL-1040, Individual Income Tax
Return.
Nonresident partner means a partner who is not a resident of
Illinois, as dened previously.
Page 5 of 28IL-1065 Instructions (R-04/24)
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 beneciaries.
PTE tax is an amount equal to 4.95 percent (.0495) of the taxpayer’s
calculated net income for the taxable year paid by a partnership
(other than a publicly traded partnership under Section 7704 of the
Internal Revenue Code) or subchapter S corporation who elects to
pay the tax for taxable years ending on or after December 31, 2021,
and beginning prior to January 1, 2026.
PTE tax credit is the distributive share of the credit allowed as a
result of a partnership or S corporation having elected to pay the
PTE tax.
PTE tax credit is
• reported to your partners on the Schedule K-1-P and
• reported to IDOR on your Form IL-1065 and Illinois Schedule B.
A nonresident individual partner of a partnership for a taxable year
in which the election to pay PTE tax was made shall not be required
to le an income tax return under the IITA for such taxable year if
the only source of net income of the individual (or the individual
and the individual’s spouse in the case of a joint return) is from an
entity making the PTE election and the credit allowed to the partner
equals or exceeds the individual’s liability for the tax imposed under
subsections (a) and (b) of Section 201 of the IITA for the taxable
year.
Pass-through withholding is the amount required to be reported
and paid by the pass-through entity, who does not elect to pay
PTE tax, on behalf of its nonresident partners, shareholders, and
beneciaries
• who have not submitted Form IL-1000-E, Certicate 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 partners on the Schedule K-1-P you send to them,
• reported to IDOR on your Form IL-1065 and Illinois Schedule B,
and
• paid with your return or voluntarily prepaid with Form IL-1065-V.
If any of your partners are pass-through entities themselves,
they are required to report and pay pass-through withholding
on behalf of their own nonresident partners, shareholders, or
beneciaries on the income you passed through. Your partners may
claim a credit on their Illinois Income Tax return for pass-through
withholding you reported and paid on their behalf.
Partnerships can both make and 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 partners who have not submitted Form
IL-1000-E to you. This amount will be reported on Form IL-1065,
Line 59a.
• 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 beneciary of a pass-through
entity. This amount will be reported on Form IL-1065, Line 65c.
If you are a nonresident and the pass-through withholding reported to
you satises your Illinois Income Tax liability, you are not required to
le 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 le 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 le their own annual
Illinois Income Tax return and claim a credit for any pass-through
withholding reported to them.
Investment partnership withholding is the amount required to
be reported and paid by the investment partnership on behalf of
its nonresident partners who have received partnership income
allocable to Illinois.
Investment partnership withholding is
• reported to your partners on Line 55 of the Schedule K-1-P you
send to them,
• reported to IDOR on Form IL-1065, Line 59b, and on Schedule B,
and
• paid with your return or prepaid with Form IL-1065-V.
Form IL-1000-E, Certicate of Exemption for Pass-through
Withholding, will not exempt an investment partnership from
investment partnership withholding.
What if I am an investment partnership?
Eective for tax years ending on or after December 31, 2004, any
partnership that qualies as an “investment partnership” as dened in
the IITA, shall not be subject to replacement tax.
For tax years ending on or after December 31, 2023, any partnership
that qualies as an “investment partnership” as dened in the
IITA Section 1501(a)(11.5)(A-5) is required to withhold for their
nonresident partners the partner’s share of partnership income
allocable to Illinois. See 35 ILCS 5/709.5(d) for more information.
Investment partnerships with nonresident partners must complete
and submit Form IL-1065 to report their investment partnership
withholding. Investment partnerships will calculate the investment
partnership withholding for each nonresident partner using Illinois
Schedule K-1-P(4), Investment Partnership Withholding Calculation
for Nonresident Partners, will carry the withholding amounts from
Schedule(s) K-1-P(4) to Illinois Schedule B, and enter the total
amount on Form IL-1065 or Form IL-1065-X.
If the investment partnership has no income subject to
investment partnership withholding, the investment partnership is not
required to le Form IL-1065.
Investment partnerships may elect to pay PTE tax for their partners.
However, electing to pay PTE tax does not exempt the investment
partnership from investment partnership withholding. Instead,
investment partnerships must calculate their investment partnership
withholding prior to calculating the PTE tax. The income subject
to investment partnership withholding will be deducted from the
base income used to calculate PTE tax prior to making the PTE tax
calculation. See the PTE Tax Worksheet in these instructions for
more information.
Partnerships, including investment partnerships, are
required to make estimated tax payments if they elect to pay PTE
tax and their total tax liability is reasonably expected to exceed
$500. Failure to make estimated tax payments or failure to make
the required amount of estimated tax payments will result in late-
payment penalties for underpayment of estimated tax. For more
information about penalties, see Publication 103, Penalties and
Interest for Illinois Taxes.
To report the investment partnership withholding on Form IL-1065,
• for investment partnerships that are only ling to pay
investment partnership withholding - check the appropriate
box on Form IL-1065, Line F, and enter the total amount of
investment partnership withholding on Form IL-1065, Line 59b.
Complete the remainder of the return with the appropriate
gures. Investment partnerships are also required to complete
all applicable lines of Schedule B.
Page 6 of 28IL-1065 Instructions (R-04/24)
• for investment partnerships electing to le a completed
Form IL-1065 with IDOR - check the appropriate box on Form
IL-1065, Line F, and complete the return with the appropriate
gures. Enter zero on Step 6, Lines 36 through 46, and Step
7, Line 47. Enter the total amount of investment partnership
withholding on Form IL-1065, Line 59b. Complete the
remainder of the return with the appropriate gures. Investment
partnerships are also required to complete all applicable lines of
Schedule B.
All investment partnerships must also complete
• Illinois Schedule K-1-P(4) for each of their nonresident partners,
• Illinois Schedule K-1-P for each of their partners (and distribute
the Schedules K-1-P to the partners),
• Schedule B, Section B, Lines A through C, for each of their
partners if the investment partnership les Form IL-1065, and
• Schedule B, Section B, Line J, to report the amount of
investment partnership withholding withheld for each applicable
partner as calculated on the corresponding Schedule K-1-P(4),
Line 14, if the investment partnership les Form IL-1065.
In addition, each amount entered on Schedule B,
Section B, Line J, must be carried to the applicable line of
Schedule B, Section A, Lines 4a through 4e, and added to
the total to be entered on Schedule B, Section A, Line 5. For
reporting purposes, treat any investment partnership withholding
amounts entered on Schedule B, Section B, Line J, as if they
were pass-through withholding amounts, with the exception
that the amount from Schedule B, Section A, Line 5, would be
entered on Form IL-1065, Line 59b, rather than on Line 59a.
Investment partnerships making the election to pay PTE tax must
also complete
• all other applicable lines of Schedule B, Section B (most notably
Lines K and L), for each of their partners, and
• Schedule B, Section A, Lines 6 and 7.
See the specic form, schedule, or line instructions for more detail.
Credit for investment partnership withholding is distributed to
partners on Illinois Schedule K-1-P, Step 7, Line 55. Partners in an
investment partnership may not be eligible to claim an investment
partnership withholding credit reported to them by an investment
partnership. See Schedule K-1-P(2) for information about when a
partner may claim investment partnership withholding credit.
What if I am a publicly-traded partnership?
A publicly-traded partnership is not required to withhold tax from its
partners. A publicly-traded partnership cannot elect to le and pay
PTE tax.
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
has jurisdiction to subject you to a net income tax even though that
state does not impose such a tax. This denition is for purposes of
allocating nonbusiness income and apportioning business income
inside or outside Illinois.
When must I use Illinois Schedules K-1-P,
K-1-P(3), and B?
You must use Illinois Schedule K-1-P to supply each partner 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-P and a copy of the
Illinois Schedule K-1-P(2), Partner’s and Shareholder’s Instructions,
to each partner. Do not le copies of Illinois Schedule K-1-P
that you issue to your partners with your Form IL-1065.
However, you must keep a copy of each Illinois Schedule K-1-P with
your tax records. See Illinois Schedule K-1-P(1), Instructions for
Partnerships and S Corporations Completing Schedule K-1-P and
Schedule K-1-P(3), for more information.
You must use Illinois Schedule K-1-P(3), Pass-through Withholding
Calculation for Nonresident Members, to calculate the required tax
you must report and pay on behalf of your nonresident partners who
receive business or nonbusiness income from your partnership. You
must complete the schedule if you have business or nonbusiness income
distributable to Illinois nonresident partners who have not provided
you with Form IL-1000-E, Certicate of Exemption for Pass-through
Withholding. You are required to complete Schedule K-1-P(3) for each
such partner and keep a copy of the completed schedule in your les.
Do not submit Schedule K-1-P(3) to IDOR unless we request it
from you. The information entered on this schedule will assist you
in completing Illinois Schedule B. See Schedule K-1-P(1) for more
information.
You must use Illinois Schedule B to supply us with a listing of your
partners, certain items of income and credits they received from you,
and pass-through withholding you made on their behalf. You must
complete all lines of Illinois Schedule B, as applicable, and le it with
your Form IL-1065.
What if I am a member of a unitary group?
Partnerships may not join in the ling of a combined return. However,
you may be required to le a separate unitary return, and le a
Schedule UB, Combined Apportionment for Unitary Business Group,
to apportion your business income.
If the following applies, do not le a Schedule UB: If a partnership
is engaged in a unitary business with one or more of its partners,
but the unitary partners do not own substantially all of the interest
in the partnership, the partnership should not be included on a
Schedule UB with the partners. Substantial ownership is dened as
owning more than 90 percent of all the interest in the partnership.
If a Schedule UB should not be led, each unitary partner must
determine the portion of its business income taxed by Illinois
by adding its share of that partnership’s business income and
apportionment factors (Illinois and everywhere) to its own business
income and apportionment factors (Illinois and everywhere). This rule
applies to you if you are unitary with one or more of your partners
or if you are a partner in another partnership and are engaged in a
unitary business with that partnership. See 86 Ill. Adm. Code Section
100.3380(d), for more information.
If the following applies, you must le a Schedule UB: If you
are a partnership who is a shareholder in a corporation and are
engaged in a unitary business with that corporation, or if you are
owned more than 90 percent by members of your unitary business
group (determined without regard to the rule prohibiting taxpayers
who use dierent apportionment formulas from being included in a
unitary business group and the rule prohibiting taxpayers conducting
80 percent or more of their business activities outside the United
States from being included in a unitary business group), and you:
• use the same taxable year as a combined group that includes
your partners or your subsidiary, you should use the Schedule
UB prepared by the combined group in completing your Form
IL-1065;
• use a dierent taxable year from the combined group that
includes your partners or your subsidiary, or there is no
combined group, you must complete your own Schedule UB
using your own taxable year.
Page 7 of 28IL-1065 Instructions (R-04/24)
If you are required to le a Schedule UB: Use the line reference
chart in the Schedule UB instructions to help complete your Form
IL-1065. Steps 2 and 3 of your Form IL-1065 must be completed
showing only your separate-company items. The amounts on your
Form IL-1065, lines 14 through 22 (less Lines 20 and 21) and Lines
24 through 33 (less Line 25, 26, and 27) shall be the combined totals
shown on Schedule UB, Step 3, Column E.
Notes concerning specic Form IL-1065 income modications:
• The addition modication for guaranteed payments on Form
IL-1065, Line 20, should be zero. This addition modication for all
partnerships included on the Schedule UB is included in the “other
additions” on Schedule UB, Step 3, Column E, Line 8, and so
included in Line 22 of the Form IL-1065.
• The subtraction modications for August 1, 1969, valuation
limitation amounts on Form IL-1065, Line 25, and personal service
income or reasonable allowance for compensation of partners
on Form IL-1065, Line 26, should be zero. These subtraction
modications for all partnerships included on the Schedule UB
are included in the “other subtractions” on Schedule UB, Step 3,
Column E, Line 21, and so included in Line 33 of the Form IL-
1065.
• The modications for Form IL-1065, Lines 21 and 27 are not
included as modications on the Schedule UB. The amount
on your Form IL-1065, Lines 21 or 27, must be computed on
the Illinois Schedule B, Column E Worksheet, found in these
instructions. Carry the combined total amounts from Schedule UB,
Step 3, Column E for each line item of the Column E Worksheet.
Use the Line 21 and Line 27 amounts to compute your base income
on Form IL-1065 Line 35. Check the box on Form IL-1065, Line 35 B,
and complete Form IL-1065, Step 6 by subtracting:
• on Line 36, the combined nonbusiness income of the entire
unitary business group, minus the portion allocable to partners
subject to replacement tax, and
• on Line 37, the amount received by the entire unitary business
group from non-unitary partnerships, partnerships included on
the Schedule UB, S corporations, trusts, and estates, minus the
portion allocable to partners subject to replacement tax.
On Form IL-1065, Step 6, Line 40, include the everywhere sales
amount from Schedule UB, Step 4, Column D, Line 2. On Line 41 of
Step 6 of Form IL-1065, include your Illinois sales. On Form IL-1065,
Step 6, Lines 44 and 45, include only your separate-company
nonbusiness income, and the business income or loss apportionable
to Illinois you received from trusts, estates, non-unitary partnerships,
partnerships included on the Schedule UB, and S corporations
minus the portion of those amounts allocable to partners subject to
replacement tax.
Schedules used to compute any amounts shown must be attached
to Form IL-1065.
If you need more information, visit our web site at tax.illinois.gov
and view the 86 Ill. Adm. Code Section 100 referenced in these
instructions and in the Schedule UB instructions.
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 that
transaction to the IRS, you are also required to disclose that information
to Illinois.
You must send us two copies of the form you used to disclose the
transaction to the IRS.
• Mail the rst 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?
• For assistance, forms, or schedules, visit
our website at tax.illinois.gov or scan the
QR code provided.
• Write us at:
ILLINOIS DEPARTMENT OF REVENUE
PO BOX 19001
SPRINGFIELD IL 62794-9001
• Call 1 800 732-8866 or 217 782-3336 (TTY
at 1 800 544-5304).
• Visit a taxpayer assistance oce - 8:00 a.m. to 5:00 p.m.
(Springeld oce) and 8:30 a.m. to 5:00 p.m. (all other oces),
Monday through Friday.
Where should I le?
File electronically -
• Modernized e-File (MeF)
• Third-party Tax-Prep Software
File on paper -
• If a payment is enclosed, mail your Form IL-1065 to:
ILLINOIS DEPARTMENT OF REVENUE
PO BOX 19053
SPRINGFIELD IL 62794-9053
• If a payment is not enclosed, mail your Form IL-1065 to:
ILLINOIS DEPARTMENT OF REVENUE
PO BOX 19031
SPRINGFIELD IL 62794-9031
If you are operating as a business organized under the Lloyd’s plan
of operation, you should mail your Form IL-1065 to:
ATTN: LLOYD’S OF LONDON
BUSINESS PROCESSING DIVISION
PO BOX 19014
SPRINGFIELD IL 62794-9014
Page 8 of 28IL-1065 Instructions (R-04/24)
Specic instructions for most of the lines are provided on the
following pages. If a specic line is not referenced, follow the
instructions on the form.
Step 1 — Identify your partnership
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.
Any related correspondence issued by IDOR will be mailed
to the address entered on Step 1, Line B.
C — If this is your rst or nal return, check the appropriate box and
the box on Line 68 if you have a credit carryforward on your nal
return.
D — If you checked nal return on Line C, answer the questions on
Line D, if applicable.
E — Apportionment Formulas - If you earn income both inside and
outside of Illinois, check the appropriate box(es). If you are a unitary
business group, check as many boxes as applicable. If more than
one box is checked, you must complete a Subgroup Schedule for
each checked box that is not a sales company. If you earn income
only inside Illinois, leave this line blank. For more information, see
the specic instructions for “Apportionment Formulas.”
F — Check the appropriate box if:
• you are an investment partnership. See “What if I am an
investment partnership?” under General Information for more
information; or
• you are a publicly-traded partnership. See “What if I am a
publicly-traded partnership?” under General Information for more
information.
G — Check the box if you are making the election to not be treated
as a partnership under IRC Section 761.
H — Check this box if you are a 52/53-week ler. A 52/53-week
ler is a scal ler 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.
I — Check this box if you elect to le and pay PTE tax in an amount
equal to 4.95 percent (.0495) of the taxpayer’s calculated net income
for the taxable year on Line 61.
J — Check this box if you are paying Pass-through Entity (PTE) Tax
and you annualized your income on Form IL-2220, Computation of
Penalties for Businesses. Attach Form IL-2220.
K — Enter your entire federal employer identication number (FEIN).
A partial FEIN will delay processing of your return.
L — If you are a member of a unitary business group and are
included on a Schedule UB, Combined Apportionment for Unitary
Business Group, check the box. Enter the entire FEIN of the member
who prepared the Illinois Schedule UB and attach the Schedule UB
to this return.
M — Enter your North American Industry Classication System
(NAICS) Code. If you are unsure of your code, you can research the
information at www.census.gov/naics or www.irs.gov.
N — If you keep your accounting records in a location dierent from
the address indicated on Line B, enter the city, the two-letter state
abbreviation, and the Zip Code for the location the records are kept.
O — If you are making the election to treat all of your income other
than compensation as business income for this tax year, you must
check the box on this line and enter zero on Step 6, Lines 36 and
44. This election must be made by the extended due date of this
return. Once made, the election is irrevocable.
P — If you are required to disclose reportable transactions and
you have completed federal Form 8886 or federal Schedule M-3,
Part II, Line 10, check the appropriate box and attach a copy of the
federal form or schedule to this return. See “What if I participated in a
reportable transaction?” for more information.
Q — If you are claiming a special depreciation addition or
subtraction modications on Form IL-1065, check the box and attach
Form IL-4562, Special Depreciation, to your tax return.
R — If you are claiming other addition or subtraction modications on
Form IL-1065, check the box and attach Schedule M, Other Additions
and Subtractions (for businesses), to your tax return.
S — If you are claiming related-party expenses modications on
your Form IL-1065, check the box and attach Schedule 80/20,
Related-Party Expenses, to your tax return.
T — Check the box if you are claiming deductions or credits listed
on Illinois Schedule 1299-A, Tax Subtractions and Credits. You must
check the box and attach Illinois Schedule 1299-A and any other
required support listed on Schedule 1299-A to your tax return to
support any deductions or credits you are claiming or passing to your
partners.
U — Check this box only if you have sales into Illinois and you are
not required to allocate them because you are protected by Public
Law 86-272. Complete Steps 1 through 7 of the IL-1065.
V — If you are attaching Subgroup Schedule to your Schedule
UB, check the box. See Subgroup Schedule and Schedule UB
instructions for more information.
You must complete an IDOR-issued or previously
approved Form IL-1065 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.
If you are operating a business organized under a Lloyd’s plan of
operation, you must refer to 86 Ill. Adm. Code Section 100.5130, for
specic instructions on how to properly complete Form IL-1065.
Step 2 — Figure your ordinary income or loss
Lines 1 through 5 — Enter the amount for each line item from
the
corresponding line(s) on your
U.S.
Form 1065, Schedule K.
Attach
a copy of your federal return. See the chart below to determine the
correct corresponding lines.
Form IL-1065
U.S. Form 1065,
Schedule K
Line 1 Line 1
Line 2 Line 2
Line 3 Line 3c
Line 4 Lines 5, 6a, 7, 8, 9a
Line 5 Line 10
Under federal law, Paycheck Protection Program (PPP)
loan forgiveness is not considered taxable income and the business
expenses covered by the PPP loan proceeds are deductible
business expenses. Currently, Illinois tax law has no addition
modication to change this; therefore, the same treatment ows
through to the Illinois return and is included as part of federal taxable
income.
Line 6 — Include any items of income or loss from U.S. Form 1065,
Schedule K, that are not included on any other line of Step 2 or Step
3 of this Form IL-1065.
Specic Instructions
Page 9 of 28IL-1065 Instructions (R-04/24)
Step 3 — Figure your unmodied base income
or loss
Lines 8 through 10 — Enter the amount for each line item from
the corresponding line on your U.S. Form 1065, Schedule K. See the
chart below to determine the correct corresponding lines.
Form IL-1065
U.S. Form 1065,
Schedule K
Line 8
Sum of Lines 13a
and 13b
Line 9 Line 12
Line 10 Line 13c
Line 11 — Include any items of expense
• that you are required to state separately to your partners, rather
than include in ordinary income, and
• that would be taken into account by an individual in computing his
or her taxable income, and
• that are not included on any other line of Step 2 or Step 3 of this
Form IL-1065.
Do not include any of the following items on this line:
• net operating loss carryovers;
• any qualied business income deduction allowed under
IRC Section 199A;
• any depletion amounts allowed federally on all of your oil and gas
properties; and
• any excess business interest expense under IRC Section 163(j).
Line 13 — This is your total unmodied base income or loss. If
you are a member of a unitary group see “What if I am a member
of a unitary group?” in the General Instructions for what to enter on
Line 13.
Step 4 — Figure your income or loss
Line 14 — Follow the instructions on the form. If you are a member
of a unitary group see “What if I am a member of a unitary group?” in
the General Instructions for what to enter on Line 14.
Do not enter negative amounts on Lines 15 through 22.
Line 15 — Enter the total of all amounts excluded from unmodied
base income that were received or accrued as federally tax-exempt
interest (e.g. state, municipal and other interest) and all distributions
of exempt interest received from regulated investment companies
during the tax year.
Line 16 — You must add back any amount of Illinois Replacement
taxes that you deducted on your U.S. Form 1065 to arrive at your
federal ordinary income. You are not required to add back taxes from
other states that you included as a federal deduction.
A partnership that elects to pay PTE tax must add back the amount
of that tax deducted federally, in addition to the add back for
replacement tax deducted.
Line 17 — Enter the addition amount calculated on Form IL-4562,
Step 2, Line 4. For more information, see Form IL-4562 Instructions.
Attach Form IL-4562 to your Form IL-1065.
Line 18 — Enter the interest or intangible expenses, or insurance
premiums paid to an aliated company, to the extent these expenses
exceed any taxable dividends you received from the aliated
company. To compute the amount of this addition, complete Step 2
of Illinois Schedule 80/20 and enter on Line 18 the total from Illinois
Schedule 80/20, Step 2, Line 9. Attach Illinois Schedule 80/20 to
your Form IL-1065.
Some interest and intangible expenses may be exempt from this
add-back provision. See Illinois Schedule 80/20 Instructions for more
information including denitions of “aliated company,” “intangible
expenses,” and “intangible assets.”
Line 19 — If you are a partner in a partnership, a shareholder
in a subchapter S corporation, or a beneciary of a trust or an
estate, include your distributive share of additions received from the
partnership, S corporation, trust or estate on Schedules K-1-P or
K-1-T. If you receive multiple schedules 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 you received to your form IL-1065.
The S corporation or the partnership is required to send
you an Illinois Schedule K-1-P and the trust or the estate is required
to send you an Illinois Schedule K-1-T, specically 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 beneciary.
Do not attach copies of Schedules K-1-P you issued to your
partners. You should keep copies of these schedules in your records.
Line 20 — Enter the guaranteed payments to partners from
U.S. Form 1065, Schedule K, Line 4, excluding the amounts you
capitalized.
Line 21 — Complete Illinois Schedule B. Illinois Schedule B,
Section A, Line 3 represents the share of distributable income or
loss that is to be added to or subtracted from base income. If the
total amount on Illinois Schedule B, Section A, Line 3 is a negative
amount (loss), it should be entered on Line 21 as a positive amount.
See the “Illinois Schedule B Instructions” following these “Specic
Instructions” for more information. Attach Illinois Schedule B to
your Form IL-1065.
Line 22 — Enter the addition amount calculated on Illinois
Schedule M, Step 2, Line 11. Attach a copy of Illinois Schedule
M to your Form IL-1065. The following are examples of items
that must be added to taxable income and are included on 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 taxable income.
• 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. See
Illinois Schedule NB, Nonbusiness Income, Line 11, and Illinois
Schedule NB Instructions for more information.
Step 5 — Figure your base income or loss
Do not enter negative amounts on Lines 24 through 34.
A double deduction is prohibited by IITA, Section 203(g).
You cannot deduct the same item more than once.
Line 24 — Enter the total interest received or accrued from U.S.
Treasury bonds, notes, bills, federal agency obligations, and savings
bonds included in federal ordinary income. You may not subtract
anything that is not identied in Illinois Publication 101. This amount
is net of any bond premium amortization deducted federally.
Page 10 of 28IL-1065 Instructions (R-04/24)
Line 25 — Enter the amount from Illinois Schedule F (Form IL-1065),
Gains from Sales or Exchanges of Property Acquired Before August
1, 1969, Line 14. 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 (Form
IL-1065) Instructions for more information. Attach Illinois Schedule
F and a copy of federal Schedule D (or federal Form 8949),
federal Form 4797, and federal Form 6252, if led.
Line 26 — Enter the greater of
• your personal service income as dened in the now-repealed
IRC Section 1348(b)(1); or
• a reasonable allowance for compensation paid or accrued for
services rendered by partners to you.
See 86 Ill. Adm. Code Section 100.2850 for more information.
Line 27 — Complete Illinois Schedule B. Illinois Schedule B,
Section A, Line 3 represents the share of distributable income or
loss that is to be added to or subtracted from base income. If the
total amount on Illinois Schedule B, Section A, Line 3 is a positive
amount, enter that amount on Line 27. If the total amount on Illinois
Schedule B, Section A, Line 3 is negative, leave Line 27 blank and
see the instructions for Line 21. For more information, see the “Illinois
Schedule B Instructions” following these “Specic Instructions”.
Attach Illinois Schedule B to your Form IL-1065.
Line 28 — Enter the River Edge Redevelopment Zone Dividend
subtraction from Illinois Schedule 1299-A, Step 1, Line 3.
Line 29 — Enter the High Impact Business Dividend subtraction
from Illinois Schedule 1299-A, Step 1, Line 6.
You must attach Illinois Schedule 1299-A, Tax
Subtractions and Credits, and any other required support listed
on Schedule 1299-A to your Form IL-1065 if you have an amount
on Line 28 or Line 29.
Line 30 — Enter the subtraction allowance from Form IL-4562,
Step 3, Line 19. Attach Form IL-4562 to your Form IL-1065.
Line 31 — Enter the amount from Illinois Schedule 80/20, Step 4,
Line 23. Attach Illinois Schedule 80/20 to your Form IL-1065.
You should use Illinois Schedule 80/20 if
• you added back interest paid to an aliated company on Step 4,
Line 18. You may subtract any interest received from that
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 aliated company
on Line 18, you may subtract any income you received during
the tax year from similar transactions with the aliated 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.
• you are an aliated company, and you received interest
or intangible income from someone who had to add back the
interest and intangible expense, or insurance premiums on
their Illinois Schedule 80/20. You may subtract your interest or
intangible income from that person.
Line 32 — Enter your distributive share of subtractions passed
through to you by a partnership, trust, or estate on Schedules K-1-P
or K-1-T. Do not include any amounts passed through that are
reected on Illinois Schedule 1299-A. Attach a copy of all Illinois
Schedules K-1-P and K-1-T you received to your Form IL-1065.
The partnership or S corporation is required to send you an
Illinois Schedule K-1-P and the trust or the estate is required to send
you an Illinois Schedule K-1-T, specically 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, shareholder, or beneciary. Do
not attach copies of Schedules K-1-P you issued to your partners.
You should keep copies of these schedules in your records.
Line 33 — Enter the subtraction amount calculated on Illinois
Schedule M, Step 3, Line 40. Attach a copy of Illinois Schedule M
to your Form IL-1065.
You may not subtract anything that is not identied 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 ordinary
income.
• the refund of Illinois replacement tax for a prior year, to the extent
included in your federal ordinary income.
• any other income included on Step 4, Line 23, 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.
• 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.
• contributions you made under the Tax Increment Allocation
Redevelopment Act to a job training project. For more information,
see FY Bulletin 1990-40.
Line 35 — This is your base income or loss.
Follow the instructions on the form and check a box on Line A or B.
You must check one of these boxes and follow the instructions for
that line.
Check the box on Line A if
• all of your base income or loss is derived inside Illinois; and
• you do not have any income or loss to report on Lines 36, 37, 44,
or 45.
If you check the box on Line A, do not complete Step 6. All of
your base income or loss is allocable to Illinois. Skip Step 6, enter
the amount from Step 5, Line 35 on Step 7, Line 47, and complete
the remainder of the return.
Check the box on Line B if any of the following apply
• your base income or loss is derived inside and outside Illinois;
• all of your base income or loss is derived outside Illinois; or
• you have income or loss to report on Lines 36, 37, 44, or 45.
If you check the box on Line B, you must complete all lines
of Step 6. Submitting Form IL-1065 with an incomplete Step 6,
including Lines 40, 41, and 42 may result in a delay in processing
your return, further correspondence, and you may be required to
submit further information to support your ling. See the Specic
Instructions for Step 6 for more information.
Step 6 — Figure your income allocable to
Illinois
You must check the box on Line B and complete all lines of Step
6 if any portion of Line 35, base income or loss, is derived outside
Illinois, or you have any income or loss to report on Lines 36, 37, 44,
or 45.
If you do not complete all of Step 6, Lines 36 through 46, we may
issue a notice and demand proposing 100 percent of income as
being allocated to Illinois, or in the case of a loss return, a notice
indicating none of your loss as being allocated to Illinois.
Page 11 of 28IL-1065 Instructions (R-04/24)
In order to properly allocate your base income or loss you need to
determine what portion of the total base income is business income
or loss that is to be apportioned among all the states in which you do
business, and what portion is nonbusiness income or loss that is to
be allocated to a particular state.
Unitary lers who are required to le a Schedule UB -
You must complete both Step 4 of the Schedule UB and Step 6 of
the Form IL-1065.
Investment partnerships that elect to complete Form IL-1065
should check the box on Line 35 B, enter zero on Step 6, Lines 36
through 46 and Step 7, Line 47, and check the corresponding box in
Step 1, Line F.
Line by Line Instructions
You must complete all lines of Step 6.
Line 36 — Enter the amount of all nonbusiness income or loss
included in base income, net of any related deductions, plus
any recaptured business expenses from Illinois Schedule NB,
Column A. Include any nonbusiness income you received from Illinois
Schedules K-1-P or K-1-T in the amounts reported on Schedule NB.
Attach Illinois Schedule NB and all Illinois Schedules K-1-P or
K-1-T you received to your Form IL-1065. If you do not have an
amount to report on this line, enter zero.
If you are making the election to treat all income other than
compensation as business income for this tax year, you must check
the box in Step 1, Line O, and enter zero here and on Line 44. This
election must be made by the extended due date of this return.
Once made, the election is irrevocable.
Line 37 — Enter the amount of all business income or loss
included in base income received from any non-unitary partnership,
partnership included on a Schedule UB, S corporation, trust, or
estate, of which you are a partner, or a beneciary, net of any
amount distributable to partners subject to replacement tax. See
Illinois Schedules K-1-P(2) or K-1-T(2) for more information. Attach
a copy of all Illinois Schedules K-1-P and K-1-T you received to
your Form IL-1065. If you do not have an amount to report on this
line, enter zero.
The partnership or S Corporation is required to send you
an Illinois Schedule K-1-P and Schedule K-1-P(2) and the trust or
the estate is required to send you an Illinois Schedule K-1-T and
Schedule K-1-T(2), specically identifying your share of income.
If you are a partner engaged in a unitary business
with your partnership, you must either le a Schedule UB with that
partnership or include your distributable share of the partnership’s
business income in your business income. Do not subtract this
business income on Line 37.
Lines 40 through 42 —
You must complete Lines 40 through 42 if any of the following apply
• your business income or loss is derived inside and outside Illinois;
• all of your business income or loss is derived outside Illinois; or
• you have income or loss to report on Lines 36, 37, 44, or 45.
Follow specic instructions below for Lines 40 through 42.
If you are a nancial organization, a transportation
company, sales company, or a federally regulated exchange,
check the appropriate box in Step 1, Line E (nancial organization,
transportation company, sales company, or federally regulated
exchange) and see “Apportionment Formulas” in these instructions.
If you are a partner engaged in a unitary business
with your partnership, you must either le a Schedule UB with that
partnership or include your distributive share of the “everywhere” and
“Illinois” sales factors from the partnership in your “everywhere” and
“Illinois” sales factors. For more information, see 86 Ill. Adm. Code
Section 100.3380(d).
Line 40 — Enter your total sales everywhere.
Line 41 — Enter your total sales inside Illinois. If you have no sales
in Illinois, enter zero.
Lines 40 and 41 cannot be less than zero. The amount on
Line 41 cannot exceed the amount on Line 40.
Line 42 — Divide Line 41 by Line 40 and enter the result, rounded
to six decimal places. The result cannot be greater than one or less
than zero.
If you checked the box on Line 35 B and do not complete
Lines 40, 41, and 42 we may issue a notice and demand proposing
100 percent of your income as being allocated to Illinois, or in the
case of a loss return, a notice indicating none of your loss as being
allocated to Illinois.
Line 43 — Follow the instructions on the form.
Line 44 — Enter the amount of nonbusiness income or loss
allocable to Illinois from Illinois Schedule NB, Column B. Include any
nonbusiness income you received from Illinois Schedules K-1-P or
K-1-T in the amounts reported on Schedule NB. This amount is net
of the portion of your Illinois nonbusiness income distributable to
partners subject to replacement tax. Attach a copy of Schedule NB
and all Illinois Schedules K-1-P and K-1-T you received to your
Form IL-1065. If you do not have an amount to report on this line,
enter zero.
If you checked the box in Step 1, Line O, making the election
to treat all of your income other than compensation as business
income, then enter zero on Line 44.
Line 45 — Enter the amount of the income or loss reported on
Step 6, Line 37 that is apportionable to Illinois as reported by the
non-unitary partnership, partnership included on a Schedule UB,
S corporation, trust, or estate, on Illinois Schedules K-1-P or K-1-T,
net of the portion distributable to partners subject to replacement
tax. See Illinois Schedules K-1-P(2) or K-1-T(2) for more information.
Attach a copy of all Illinois Schedules K-1-P and K-1-T you
received to your Form IL-1065. If you do not have an amount to
report on this line, enter zero.
Step 7 — Figure your net income
Line 47 — Follow the instructions on the form. If this amount is a
loss, you may carry it forward to later years as an Illinois net loss
deduction (NLD).
Line 48 — Enter your Illinois net loss deduction carryforward as
determined on Illinois Schedule NLD, Step 1, Line 7, total box.
Attach Illinois Schedule NLD to your Form IL-1065.
If you are a cooperative and you separate your patronage and
nonpatronage income or loss, complete Schedule INL and follow the
instructions for computation of your Illinois net loss deduction.
If any of the loss being claimed on Line 48, originated from a
company other than the one ling this return, check the box on
Line 48 and attach a detailed statement to your return with
• the FEIN of the company from which you acquired the loss,
• the reason (e.g., merger) you are allowed to use that company’s
losses, and
• the date you acquired the loss.
For more information, see the Schedule NLD Instructions.
Line 51 — Divide Line 47 by Line 50 and enter the result, rounded
to six decimal places. This gure cannot be greater than one.
Line 52 — The standard exemption is $1,000 multiplied by a
fraction in which the numerator is your base income allocable to
Illinois and the denominator is your total base income. This gure
cannot be greater than “$1,000.” The standard exemption is $0.00 if
your unmodied base income amount on Step 3, Line 13 is $250,000
or more.
Page 12 of 28IL-1065 Instructions (R-04/24)
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 rst or nal return, you are allowed to use the full-year standard
exemption even if it is a short tax year.
Line 53 — If Line 49 is a loss, enter the amount from Line 49 on 53.
Do not increase your loss by the exemption allowance on Line 52.
Step 8 — Figure the taxes, pass-through
withholding, and penalty you owe
Line 55 — Enter your recapture of investment credits from Illinois
Schedule 4255, Recapture of Investment Tax Credits, Step 5,
Column D, Line 20.
If you claimed an Illinois investment tax credit in a prior year on
Form IL-477, Replacement Tax Investment Credits, and any of
the property was disqualied 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 disqualied.
Line 57 — 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-1065.
You may claim a replacement tax investment credit of .5 percent
(.005) of the basis of qualied property placed in service in Illinois
during the tax year.
An additional credit of up to .5 percent (.005) of the basis of qualied
property is available if your Illinois base employment increased by
1 percent (.01) or more over the preceding year or if your business
is new to Illinois. Excess credit may be carried forward for ve
years following the excess credit year. For more information, see
Form IL-477 Instructions.
Line 59a — For partnerships other than those that qualify as
“investment partnerships” as dened in the IITA Section 1501(a)
(11.5)(A-5). Complete all sections of Illinois Schedule B and enter
the amount from Illinois Schedule B, Section A, Line 5, on this line.
This is the amount of pass-through withholding you owe on behalf of
your members. Attach Illinois Schedule B to your Form IL-1065.
See “Denitions to help you complete your Form IL-1065” in these
instructions for more information. If you complete Line 59a, then
Line 61 should be blank.
Investment partnerships calculating investment partnership
withholding will enter the amount from Schedule B, Section A, Line 5,
on Line 59b. See the Line 59b instructions and “What if I am an
investment partnership?” for more information.
PTE Income Worksheet
1a Base Income from Line 35.
Investment Partnerships - Subtract income subject to withholding from base income. 1a
00
1b Exempt distributions for retired partners included in Line 1a. 1b
00
1 Subtract Line 1b from Line 1a. 1
00
2a Amount from Line 26. 2a
00
2b Amount from Line 27. 2b
00
3 Add Lines 2a and 2b. 3
00
4 PTE base income. Add Lines 1 and 3. 4
00
5 Nonbusiness income or loss. 5
00
6 Business income or loss included in Line 4 from non-unitary partnerships, partnerships
included on a Schedule UB, S corporations, trusts, or estates. 6
00
7 Add Lines 5 and 6. 7
00
8 Business income or loss. Subtract Line 7 from Line 4. 8
00
9 Total sales everywhere. This amount cannot be negative. 9
00
10 Total sales inside Illinois. This amount cannot be negative. 10
00
11 Divide Line 10 by Line 9. Round to six decimal places. 11
12 Business income or loss apportionable to Illinois. Multiply Line 8 by Line 11. 12
00
13 Nonbusiness income or loss allocable to Illinois. 13
00
14 Business income or loss apportionable to Illinois from non-unitary partnerships, partnerships
included on a Schedule UB, S corporations, trusts, or estates. 14
00
15 PTE Income. Add Lines 12 through 14. Enter this amount on Line 60. 15
00
PTE Worksheet Instructions
Line 1a — Enter the base income from Line 35 of your return. If you are an investment partnership, subtract any income that is subject to
investment partnership withholding.
Line 1b — Enter the amount of distributions for retired partners to the extent that the partner’s distributions are exempt from tax under
35 ILCS 5/203(a)(2)(F). Only enter amounts included in the base income from Line 1a.
Lines 1 through 4 — Follow the instructions on the worksheet.
Lines 5 and 13 — Complete a pro forma Illinois Schedule NB allocating nonbusiness income amounts to Illinois including the portion of
nonbusiness income or loss distributable to partners subject to replacement tax reported from Form IL-1065, Lines 21 and 27.
Line 6 through 12 — Follow the instructions for Form IL-1065, Lines 37 through 43.
Line 14 — Follow the instructions for Form IL-1065, Line 45, but do not include any income from a partnership or S corporation that made
the PTE election.
Page 13 of 28IL-1065 Instructions (R-04/24)
Do not include any amount from Schedule B, Section B,
Line K, PTE tax credit paid to members, or Line L, PTE tax credit
received and distributed to members.
Do not include on Line 59a any pass-through withholding
reported to you on Schedule(s) K-1-P or K-1-T. Pass-through
withholding amounts reported to you are included on Step 9,
Line 65c.
Line 59b — Investment partnerships only. If you are an
investment partnership, enter the total amount of investment
partnership withholding you are withholding for your nonresident
partners as reported on Schedule B, Section A, Line 5. Nonresident
partner investment partnership withholding is calculated on Schedule
K-1-P(4) and carried over to Schedule B, Section B, Line J, for each
applicable partner. Schedule B, Section B, Line J amounts must
be carried to the applicable line of Schedule B, Section A, Lines 4a
through 4e, and added to the total to be entered on Schedule B,
Section A, Line 5. See “What if I am an investment partnership?”
in these instructions and Illinois Schedule K-1-P(4) for more
information.
Line 60 — Complete this line if you elect to le and pay PTE tax
on your calculated base income. The total amount of PTE credit
allocated to partners cannot exceed the PTE liability reported and
actually paid by the partnership. Follow the instructions on the PTE
Income Worksheet on Page 12 to determine the amount to enter on
this line.
Line 61 — Follow the instructions on the form. Do not include any
PTE tax credit you received on Schedule(s) K-1-P or K-1-T on
this line.
If you complete Line 61, then Line 59a should be blank.
Line 63 — If you elected to pay PTE tax and your total tax liability is
$500 or more, enter the amount of any self-assessed underpayment
of estimated tax penalty you gured on Form IL-2220, Penalty
Worksheet 1, Line 22.
If you annualized your income in Step 6 of Form IL-2220, be sure
to check the box in Step 1, Line J of this Form IL-1065. Attach a
completed Form IL-2220 to your Form IL-1065.
If you do not need to annualize your income and do not
wish to complete Form IL-2220, we encourage you to let us gure
your penalties and interest and send you a bill instead of determining
these amounts yourself. We will compute any penalty or interest due
and notify you.
Step 9 — Figure your refund or balance due
Do not include any PTE tax or PTE tax credit on
Lines 65a through 65d. PTE tax is reported on Line 61 and PTE Tax
credit is reported for each member on Schedule B, Section B, Line L.
Line 65a — Enter the sum of any overpayment to be applied to this
year’s tax return. Take into account any correspondence we may
have sent you that changed the amount of your credit carryforward
from the previous year.
Line 65b — Enter the sum of any
• estimated payments or tax prepayments made before the date
this return is led,
• extension payments before the date this return is led, and
• any other payments made before the date this return is led.
Line 65c — Enter the amount you wish to claim of Illinois
pass-through withholding (including any eligible investment
partnership withholding) reported to you by partnerships,
S corporations, or trusts on Schedule(s) K-1-P or K-1-T. If you
received more than one Schedule K-1-P or K-1-T, add the amounts
you wish to claim from all the schedules and enter the total on
Line 65c. Attach copies of the Schedules K-1-P and K-1-T you
received from the pass-through entities to your Form IL-1065.
Schedules K-1-P and K-1-T, Step 1, Line 3, must be completed
or the pass-through withholding reported on this line may not be
credited to your return.
Partners in an investment partnership may not be eligible to
claim a Schedule K-1-P, Step 7, Line 55 amount reported to them by
the investment partnership. See Schedule K-1-P(2) for information
about when a partner may claim investment partnership withholding
credit.
See “Denitions to help you complete your Form IL-1065” in these
instructions for more information.
Do not include on Line 65c any pass-through withholding
you owe on behalf of your members. Pass-through withholding you
owe on behalf of your members is included on Step 8, Line 59a.
Line 65d — Enter the amount of Illinois income tax withheld on
Forms W-2G from gambling and sports wagering winnings that were
received by you.
Line 68 — Enter the amount of overpayment you elect to be carried
forward to your next tax year. Check the box on this line if this is
your nal return and any remaining carryforward is being transferred
to another entity. Attach a detailed statement to your return listing
the FEIN of the entity receiving the credit carryforward, the date the
credit was transferred, and the reason for the transfer.
Step 1, Line C, must also be completed if you are
transferring an overpayment to another entity.
Your credit carryforward will not be applied if you do not le a
processable return.
Your credit carryforward may be reduced by us due to
corrections we make to your return, or to satisfy any unpaid tax,
penalty, and interest due for this year or any other year. If we reduce
your credit carryforward, it may result in a late-payment penalty in a
subsequent year.
To which tax year will my credit apply?
If your 2023 return was led
on or before the original ling and payment due date of
your return, your credit will be applied to the next full tax year,
unless you elect to apply the credit to a dierent tax year.
Example 1: You le your 2023 calendar-year return on
March 1, 2024, requesting to receive your overpayment as
a credit. March 1, 2024, falls before the original ling and
payment due date of the 2023 tax year (April 15, 2024, for
calendar-year lers). Your credit will be applied against your
2024 tax year liability.
after the original ling and payment due date of your return,
your credit will be applied to the next full tax year in which timely
payments can be made as of the date you are ling this return,
unless you elect to apply the credit to a dierent tax year.
Example 2: You le your 2023 calendar-year return on
August 5, 2024, requesting to receive your overpayment
as a credit. August 5, 2024, is after the original ling and
payment due date of the 2023 tax year (April 15, 2024, for
calendar-year lers), but is before the original ling and
payment due date of the 2024 tax year (April 15, 2025, for
calendar-year lers). Your credit will be applied against your
2024 tax year liability.
Example 3: You le your 2023 calendar-year return on
April 28, 2025, requesting to receive your overpayment
as a credit. April 28, 2025, is after the original ling and
payment due date of the 2024 tax year (April 15, 2025, for
calendar-year lers), but is before the original ling and
payment due date of the 2025 tax year (April 15, 2026, for
calendar-year lers). Your credit will be applied against your
2025 tax year liability.
Page 14 of 28IL-1065 Instructions (R-04/24)
If you are ling your return after the extended due date, you
may only elect to claim an overpayment credit for payments received
on or before the date you led your return. Any payments made after
the date you led that return can only be claimed as an overpayment
credit on a subsequent amended return.
With what date will my credit apply against my tax
liability?
If your 2023 return was led
on or before the extended due date of your return
(October 15, 2024, for calendar-year lers), your credit is
considered to be paid on the original due date of this return
(April 15, 2024, for calendar-year lers).
However, if all or a portion of your overpayment results from
payments made after the original due date of this return, that
portion of your credit is considered to be paid on the date you
made the payment.
Example 1: You le your 2023 calendar-year return on
or before the extended due date of your return requesting
$500 be applied as a credit. All of your payments are made
before the original due date of your return. Your credit of
$500 will be considered to be paid on April 15, 2024.
Example 2: You le your 2023 calendar-year return on
or before the extended due date of your return requesting
$500 be applied as a credit. Your overpayment includes
payments of $400 you made before the original due
date of your return, and a $100 payment you made on
June 3, 2024. Your credit of $400 will be considered to be
paid on April 15, 2024. The remaining $100 credit will be
considered to be paid on June 3, 2024.
after the extended due date of your return, your credit is
considered to be paid on the date you led the return on which
you made the election.
Example 3: You le your 2023 calendar-year return on
December 2, 2024, requesting $500 be applied as a
credit. Your credit of $500 will be considered to be paid on
December 2, 2024, because you led your return after the
extended due date of your 2023 calendar-year return.
May I apply my credit to a dierent tax year?
Yes. If you wish to apply your credit to a tax year other than the one
during which you le this return, you must submit a separate request
in writing to:
ILLINOIS DEPARTMENT OF REVENUE
PO BOX 19004
SPRINGFIELD IL 62794-9004
Submit your request at the time you le your return. Do not
submit your return to this address.
Your request must include
• your name,
• your FEIN,
• the tax year of the return creating the overpayment, and
• the tax year you wish to have the credit apply.
If you do not follow these instructions, your election will be
considered invalid and we will not apply your credit as you requested.
If you submit a valid request, we will apply your credit as you
requested and notify you. Once made, your election to change the
tax year to which your credit will apply is irrevocable. Requests will
be worked in the order we receive them.
You may only apply your credit to tax years occurring after
the year of the return creating the overpayment. If you request to
apply more credit than our records show you have available, we
will apply the maximum amount available and notify you of the
dierence.
Line 69 — Follow the instructions on the form. Your refund will not
be issued if you do not le a processable return.
Your refund may be reduced by us to satisfy any unpaid tax,
penalty, and interest due for this year or any other year.
Line 70 — Direct deposit information.
If you choose to deposit your refund directly into your checking or
savings account, you must
• Enter your routing number.
• For a checking account, your routing number must be
nine digits and the rst two digits must be 01 through
12 or 21 through 32.
The sample check following these instructions has an
example of a routing number.
• For a savings account, you must contact your
nancial institution for your routing number.
• Check the appropriate box to indicate whether you want your
refund deposited into your checking or savings account.
• Enter your account number.
• For a checking account, your account number may
be up to 17 digits.
The sample check following these instructions has an
example of an account number.
• For a savings account, you must contact your
nancial institution for your account number.
Do not use your account and routing numbers from your checking
or savings account deposit slip. Do not include your check number.
Include hyphens, but omit spaces and special symbols. You may
have unused boxes.
If your nancial institution does not honor your request for
direct deposit, we will send you a check instead.
We do not support international ACH transactions. We will
only deposit refunds into accounts located within the United States.
If your nancial institution is located outside the United States, we
will send you a check instead of depositing your refund into your
account.
Line 71 — Follow the instructions on the form. This is your amount
of tax due that must be paid in full if $1 or more. If you are not paying
electronically, complete a payment voucher, Form IL-1065-V, make
your check or money order payable to “Illinois Department of
Revenue” and attach them to the front of the return.
If you are paying electronically do not complete and attach
a payment voucher.
You should also enter the amount you are paying in the box
located on the top of Page 1 of the Form IL-1065.
We encourage you to let us gure your penalties and interest and
send you a bill instead of determining these amounts yourself.
We will compute any penalty and interest due and notify you. See
General Information, “What are the penalties and interest?”
Page 15 of 28IL-1065 Instructions (R-04/24)
Certain businesses that derive their income from inside and outside
Illinois require an apportionment formula. The following denitions
will help in completing Step 6.
Business income — See General Information, “Business
income” under “Denitions to help you complete your
Form IL-1065.”
Financial organization — any bank, bank holding company,
trust company, savings bank, industrial bank, land bank, safe
deposit company, private banker, savings and loan association,
building and loan association, credit union, currency exchange,
cooperative bank, small loan company, sales nance company,
investment company, or any person owned by a bank or bank
holding company.
Revenue miles — A revenue mile is the transportation of one
passenger, or one net ton of freight, the distance of one mile.
Federally regulated exchange — A federally regulated
exchange is:
• a regulated entity as dened in 7 U.S.C. Sections 1a(40)(A),
1a(40)(B), or 1a(40)(C);
• an exchange or clearing agency as dened in 15 U.S.C.
Sections 78c(a)(1) or 78c(a)(23);
• any entity regulated under any successor regulatory structure
to a registered entity, exchange, or clearing agency; or
• any member of the same unitary group if 50 percent
or more of the business receipts of the unitary business group
for the taxable year are attributable to the matching, execution,
or clearing of transactions conducted by members of the group
described in the rst three bullet points above.
What if I am a sales company?
If you checked the box in Step 1, Line E, indicating that you are a
sales company and your income is derived from inside and outside
Illinois, you must apportion your business income as follows:
Include gross receipts from the license, sale, or other disposition
of patents, copyrights, trademarks, and similar items of intangible
personal property in the numerator and denominator of your sales
factor only if these gross receipts are more than 50 percent of the
total gross receipts included in gross income for this tax year and
each of the two immediately preceding tax years.
Do not include the following items of income in the numerator or
denominator of your sales factor:
• dividends;
• amounts included under IRC Section 78;
• IRC Section 965 inclusion;
• Global Intangible Low-Taxed Income (GILTI) income under IRC
Section 951A;
• subpart F income as dened in IRC Section 952; and
• any item of income excluded or deducted from base income.
For more information on what should be included in the numerator
or denominator of your sales factor, see 86 Ill. Adm. Code Sections
100.3370 and 100.3380.
Sales of tangible personal property are in Illinois if
• the property is delivered or shipped from anywhere to a purchaser
in Illinois, other than the United States government, regardless of
the Free on Board (f.o.b.) point or other conditions of the sale;
•
the property is shipped from Illinois to any place and the
purchaser is the United States government; or
• the property is shipped from Illinois to another state and you are
not taxable in the state of the purchaser.
For radio and television broadcasting (including cable and satellite
broadcasting), the following sales are in Illinois:
• advertising revenue received from an advertiser whose
headquarters is in Illinois;
• fees received by a broadcaster from its viewers or listeners in
Illinois;
• in the case of fees received by a broadcaster from the producer
or other owner of the contents of a program, the percentage of
the fees equal to the percentage of the broadcast’s viewing or
listening audience located in Illinois; or
• in the case of a person who owns the contents of a program and
who provides the contents to a broadcaster for a fee or other
charge, the fees received for that program from a broadcaster
located in Illinois.
If the “sales everywhere” amount includes gross receipts from
the licensing, sale, or other disposition of patents, copyrights,
trademarks, and other similar items of intangible personal property,
and the receipts are not covered by the broadcasting rules, then
these receipts should be allocated in Illinois to the extent the item
is used in Illinois during the year the gross receipts are included in
gross income. An item is used in Illinois if
• a patent is employed in production, fabrication, manufacturing, or
other processing in Illinois or if the patented product is produced
in Illinois;
• copyrighted material is printed or other publications originated in
Illinois; or
• the commercial domicile of the licensee or purchaser of a
trademark or other item of intangible personal property is in
Illinois.
If you cannot determine from your (or your related party’s)
books and records in which state an item is used, do not include the
gross receipts from that item in the numerator or the denominator of
the sales factor.
Apportionment Formulas
Step 10 — Signature, date, and paid preparer’s
information
You must sign and date your return. If you do not sign your return,
it will not be considered led and you may be subject to a non-ler
penalty.
If you pay someone to prepare your return, the income tax return
preparer must also sign and date the return, enter the preparer tax
identication number (PTIN) issued to them by the Internal Revenue
Service, and provide their rm’s name, FEIN, address, and phone
number.
If you want to allow the paid preparer listed in this step to discuss
this return with IDOR check the box. This authorization will allow
your paid preparer to answer any questions that arise during the
processing of your return, call us with questions about your return,
and receive or respond to notices we send. The authorization will
automatically end no later than the due date for ling your 2024 tax
return (excluding extensions). You may revoke the authorization at
any time by calling or writing us.
Page 16 of 28IL-1065 Instructions (R-04/24)
For sales of telecommunications services, the following sales are in
Illinois:
• sales of telecommunications service sold on a call-by-call basis,
where the call both originates and terminates in Illinois, or the
call either originates or terminates in Illinois and the customer’s
service address is in Illinois;
• retail sales of postpaid telecommunications service if the point of
origination of the signal is in Illinois;
• retail sales of prepaid telecommunications service where
the purchaser receives the prepaid card or other means of
conveyance at a location in Illinois;
• charges imposed at a channel termination point in Illinois;
• charges for channel mileage between two channel termination
points in Illinois;
• charges for channel mileage between one or more channel
termination points in Illinois and one or more channel termination
points outside Illinois, times the number of channel termination
points in Illinois divided by total termination channels;
• charges for services ancillary to sales of services in Illinois. If you
provide ancillary services, but cannot determine where the sales
of the related services are located, your sales are in Illinois if your
customer is in Illinois;
• access fees charged to a reseller of telecommunication for a call
that both originates and terminates in Illinois;
• 50 percent of access fees charged to a reseller of
telecommunications services for an interstate call that originates
or terminates in Illinois; and
• end user access line charges, if the customer’s service address is
in Illinois.
For more information, see 86 Ill. Adm. Code Section 100.3371.
Illinois lottery winnings and proceeds from sales or other transfers of
rights to lottery winnings are in Illinois.
For taxable years ending on or after December 31, 2019, gross
receipts from winnings from pari-mutuel wagering conducted at a
wagering facility licensed under the Illinois Horse Racing Act of 1975
or from winnings from gambling games conducted on a riverboat
or in a casino or organization gaming facility licensed under the
Illinois Gambling Act are Illinois sales and must be included in the
numerator of the sales factor.
For taxable years ending on or after December 31, 2021, payments
from Illinois sources of wagering and winnings conducted in
accordance with the Sports Wagering Act are allocable to Illinois.
Sales, other than sales of tangible personal property or
telecommunications service, and gross receipts from broadcasting,
or the licensing, sale, or other disposition of patents, copyrights,
trademarks, and similar items of intangible personal property, or
Illinois lottery winnings or sales proceeds, are in Illinois as follows:
• sales or leases of real property in Illinois;
• leases or rentals of tangible personal property, to the extent it is
located in Illinois during the rental period;
• interest, net gains, and other items of income from intangible
personal property received by a taxpayer who is a dealer in
that property from a customer who is a resident of Illinois (for
individuals) or who is commercially domiciled in Illinois (for all
other customers). A taxpayer without actual knowledge of the
residence or commercial domicile of a customer may use the
customer’s billing address.
• interest, net gains, and other items of income from intangible
personal property received by a taxpayer who is not a dealer
in that property, if the income-producing activity is performed in
Illinois or if the income-producing activity is performed inside and
outside Illinois, and a greater proportion of the income-producing
activity is performed inside Illinois rather than outside Illinois,
based on performance costs; or
• in all other cases, if the services are received in Illinois.
For more information, see 86 Ill. Adm. Code Section 100.3370.
What if I am a nancial organization?
If you checked the box in Step 1, Line E, indicating that you are a
nancial organization and your income is derived from inside and
outside Illinois, cross out the word “sales” on Lines 40 and 41 and
write “Financial organization.”
On Line 40, enter the amount of gross receipts from all sources.
On Line 41 enter the amount of gross receipts from:
• sales or leases of real property located in Illinois;
• leases or rentals of tangible personal property, to the extent it is
located in Illinois during the rental period;
• interest income, commissions, fees, gains on disposition, and
other receipts from:
– loans secured by real or tangible personal property located
in Illinois;
– unsecured consumer loans to a resident of Illinois;
– unsecured commercial or installment loans where the
proceeds of the loan are applied in Illinois. If the place of
application cannot be determined, the gross receipts are in
Illinois if the oce of the borrower from which the loan was
negotiated is in Illinois. If neither the place of application
nor the oce of the borrower can be determined, do not
include the gross receipts in Lines 40 or 41; and
– credit card receivables billed to a customer in Illinois.
• sales of travelers checks and money orders at a location in Illinois;
• interest, dividends, net gains, and other income from investment
and trading assets and activities, where the majority of your
contacts with the asset or activity is in Illinois. The state to which
an asset or activity is assigned in your books and records for
federal or state regulatory requirements is presumed to be proper
unless a majority of the evidence shows otherwise or you do not
have a xed place of business in that state. If the place with the
majority of contacts cannot be determined under these rules,
the gross receipts are in Illinois if your commercial domicile is in
Illinois.
• any other transaction, if the gross receipts would be included on
Line 41 under the general instructions for Line 41.
For more information, see 86 Ill. Adm. Code Section 100.3405.
Divide Line 41 by Line 40 and enter the result, rounded to six decimal
places, on Line 42. Complete Lines 43 through 46 as indicated in
Specic Instructions for Step 6, Figure your income allocable to
Illinois.
What if I am a transportation company?
If you checked the box in Step 1, Line E, indicating that you are
a company that furnishes transportation service both inside and
outside Illinois, cross out the word “sales” on Lines 40 and 41 and
write “Transportation.” You must apportion business income as
follows:
Transportation by airline — On Line 40, enter the amount of
revenue miles everywhere. On Line 41, enter the amount of
revenue miles in Illinois. Divide Line 41 by Line 40 and enter the
result, rounded to six decimal places, on Line 42.
Page 17 of 28IL-1065 Instructions (R-04/24)
Other modes of transportation — On Line 40, enter the amount
of your gross receipts from providing transportation services. On
Line 41 enter the amount of gross receipts from Illinois, as follows:
• all gross receipts from transportation that both originates
and terminates in Illinois; and
• gross receipts from interstate transportation, multiplied
by a fraction equal to the miles traveled in Illinois on all
interstate trips divided by miles traveled everywhere on
all interstate trips.
Divide Line 41 by Line 40 and enter the result, rounded to six decimal
places, on Line 42.
Transportation of both freight and passengers or
transportation by airline and other modes — Compute
separate fractions for freight transportation and passenger
transportation by airline and for freight transportation and
passenger transportation by all other modes of transportation
under A and B, in the list above and enter on Line 42 the average
of those fractions, weighted by the gross receipts from freight or
passenger transportation by airline or other modes, rounded to six
decimal places
For more information, see 86 Ill. Adm. Code Section 100.3450.
Complete Lines 43 through 46 as indicated in Specic Instructions
for Step 6, Figure your income allocable to Illinois.
What if I am a federally regulated exchange?
If you checked the box in Step 1, Line E, indicating that you are a
federally regulated exchange and your income is derived from inside
and outside Illinois, cross out the word “sales” on Lines 40 and 41
and write “Exchange.” You may apportion your business income as
follows:
On Line 40, enter the amount of business income from all sources.
On Line 41, enter the amount of business income from:
• receipts attributable to transactions executed on a physical
trading oor located in Illinois;
• receipts attributable to all other matching, execution, or clearing
transactions. This includes, without limitation, receipts from the
provision of matching, execution, or clearing services to another
entity.
– Multiply this amount by 27.54 percent (.2754) for tax years
ending on or after December 31, 2013; and
• all other receipts for sales in Illinois.
Divide Line 41 by Line 40 and enter the result, rounded to six decimal
places, on Line 42. Complete Lines 43 through 46 as indicated in
Specic Instructions for Step 6, Figure your income allocable to
Illinois.
For any tax year, the Illinois apportionment percentage
computed using this formula may never be less than the Illinois
apportionment percentage computed for the rst full tax year ending
on or after December 31, 2013, for which the taxpayer used this
formula.
What if I am a member of a unitary group?
The term “unitary business group” means a group of persons related
through common ownership, whose business activities are integrated
with, dependent on, and contribute to each other. In the case of a
corporation, common ownership is dened as the direct or indirect
ownership or control of more than 50 percent of the outstanding
voting stock of a corporation.
If the following applies, do not le a Schedule UB: If a partnership
is engaged in a unitary business with one or more of its partners,
but the unitary partners do not own substantially all of the interest
in the partnership, the partnership should not be included on a
Schedule UB with the partners. Substantial ownership is dened as
owning more than 90 percent of all the interest in the partnership.
If a Schedule UB should not be led, the partnership completes its
Form IL-1065 in the same manner as a non-unitary partnership,
and each unitary partner must determine the portion of its business
income taxed by Illinois by adding its share of that partnership’s
business income and apportionment factors (Illinois and everywhere)
to its own business income and apportionment factors (Illinois and
everywhere). This rule applies to you if you are unitary with one or
more of your partners or if you are a partner in another partnership
and are engaged in a unitary business with that partnership.
If the following applies, you must le a Schedule UB: If you are
a partnership who is a shareholder in a corporation and are engaged
in a unitary business with that corporation, or if you are owned more
than 90 percent by members of a unitary business group (determined
without regard to the rule prohibiting taxpayers conducting 80 percent
or more of their business activities outside the United States from
being included in a unitary business group), you are required to use a
Schedule UB to apportion your business income. See the instructions
for the Schedule UB for more information. Once the Schedule UB
has been completed, you must apportion your business income as
follows:
On Line 40, enter the “everywhere” sales factor of the entire unitary
business group from Illinois Schedule UB, Step 4, Line 2, Column D.
On Line 41, enter only your Illinois sales (including your share of
sales of any unitary partnerships in which you are a partner).
On Lines 44 and 45, enter your own nonbusiness income and the
Illinois portion of business income from non-unitary partnerships in
which you are a partner, from partnerships included on a Schedule
UB and in which you are a partner, from S corporations in which
you are a shareholder, or from trusts or estates of which you are a
beneciary.
What if I want to use an alternative
apportionment formula?
If the apportionment methods prescribed by IITA, Sections 304(a)
through (e), and (h) do not fairly and accurately represent the market
for your goods, services, or other sources of business income,
or lead to a grossly distorted result, you may want to use a more
accurate alternative method. If you want to use an alternative
apportionment method, you must receive permission from IDOR
prior to ling your return.
Your request for an alternative apportionment formula must
follow the requirement of 86 Ill. Adm. Code Section 100.3390. See
the regulations or contact IDOR for more information.
If you receive permission to use an alternative formula, you must
attach to your Form IL-1065 a copy of the letter granting permission.
Send your request to:
ILLINOIS DEPARTMENT OF REVENUE
LEGAL SERVICES OFFICE
SENIOR COUNSEL - INCOME TAX, 5-500
101 WEST JEFFERSON STREET
SPRINGFIELD IL 62702
Page 18 of 28IL-1065 Instructions (R-04/24)
General Information
Read this information before completing Illinois
Schedule B.
Amounts listed on the Schedule(s) K-1-P, Schedule(s) K-1-P(3),
and Schedule(s) K-1-P(4) you complete are carried to your Illinois
Schedule B and then reported on your Form IL-1065. Therefore,
you must complete Schedule(s) K-1-P and Schedule(s) K-1-P(3) or
Schedule(s) K-1-P(4) before completing Schedule B.
In order to ensure you complete Schedule B correctly, do the
following in order:
Complete all Schedule(s) K-1-P and Schedule(s) K-1-P(3) or
Schedule(s) K-1-P(4), as applicable, for your members before
completing any section of Illinois Schedule B. The information
reported on Schedule(s) K-1-P, Schedule(s) K-1-P(3), and
Schedule(s) K-1-P(4) will be used to complete Illinois Schedule
B. See Schedule K-1-P(1) and Schedule K-1-P(4) instructions
for more information.
Complete Section B of Illinois Schedule B before completing
Section A of Illinois Schedule B. Section B reports specic
amounts from each Schedule(s) K-1-P, Schedule(s) K-1-P(3),
and Schedule(s) K-1-P(4) you completed. Section B is required
to be completed in full in order to avoid processing delays,
further correspondence, or delays in the processing of any
overpayments.
Complete Section A of the Illinois Schedule B. Section A reports
total amounts from Section B, and is required to be completed in
full in order to avoid processing delays, further correspondence,
or delays in the processing of any overpayments.
Carry the amount from Illinois Schedule B, Section A, Line 3 and
Line 5 to your Form IL-1065, as applicable.
See the Schedule K-1-P(1) instructions, Schedule K-1-P(4)
instructions, and Illinois Schedule B specic instructions for more
information.
What is the purpose of Illinois Schedule B?
The purpose of Illinois Schedule B, Partners’ or Shareholders’
Information, is for you to identify any person who was a partner or
shareholder at any time during your tax year.
The Illinois Schedule B also allows you to identify your partners or
shareholders that are subject to the Illinois Personal Property Tax
Replacement Income Tax and to gure the share of distributable
income or loss that is to be added to or subtracted from your base
income.
Is Schedule B required?
Yes. You are required to have a copy of this form on le. You
must attach a copy of Schedule B to your Form IL-1065, Illinois
Partnership Replacement Tax Return to support
• the addition modication claimed on Form IL-1065, Step 4,
Line 21,
• the subtraction modication claimed on Form IL-1065, Step 5,
Line 27,
• the pass-through withholding you owe on behalf of your
nonresident members on Form IL-1065, Step 8, Line 59a,
• the investment partnership withholding you owe on behalf of
your nonresident partners on Form IL-1065, Step 8, Line 59b.
• the pass-through entity tax you pay on behalf of your members
on Form IL-1065, Step 8, Line 61, and
• the PTE tax credit you received and distributed to your members
on Schedule(s) K-1-P.
Therefore, you must follow the instructions for Illinois Schedule B,
complete it in full, and attach it to your return.
You must use forms prescribed by 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 delay the
processing of your return or the generation of any overpayment.
Additionally, failure to submit appropriate documentation when
requested may result in a referral to our Audit Bureau for compliance
action.
Partnerships must complete Illinois Schedule B. Do not send a
computer printout with line numbers and dollar amounts attached
to a blank copy of the schedule. 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.
Investment partnerships that le Form IL-1065 must
complete Schedule B, Section B, Lines A through C, for each of
their partners. In addition, investment partnerships must also
complete Schedule B, Section B, Line J, to report the amount of
investment partnership withholding withheld for each applicable
partner as calculated on the corresponding Schedule K-1-P(4),
Line 14. Each amount entered on Schedule B, Section B, Line
J, must be carried to the applicable line of Schedule B, Section
A, Lines 4a through 4e, and added to the total to be entered
on Schedule B, Section A, Line 5. For reporting purposes,
investment partnerships must treat any investment partnership
withholding amounts entered on Schedule B, Section B, Line
J, as if they were pass-through withholding amounts, with the
exception that the amount from Schedule B, Section A, Line
5, would be entered on Form IL-1065, Line 59b, rather than on
Line 59a. Investment partnerships making the election to pay
PTE tax must complete all other applicable lines of Schedule
B, Section B (most notably Lines K and L), for each of their
partners, and Schedule B, Section A, Lines 6 and 7.
What is a resident?
A resident is
• 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;
• 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 denition,
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.
What is a nonresident?
A nonresident is a person who is not a resident, as previously
dened. Corporations, S corporations, partnerships, and exempt
organizations are considered nonresidents for purposes of
Illinois Schedule B.
What do Section B, Lines G through J report?
Lines G through J report certain items of income, credits, and
pass-through withholding you reported to your nonresident members
on the Schedule K-1-P you issued to them.
Illinois Schedule B Instructions
Page 19 of 28IL-1065 Instructions (R-04/24)
Line E Worksheet
Complete this worksheet for each partner or shareholder.
1 Enter the share of income from Form IL-1065, Line 14, for this partner or shareholder. 1 _________________
2 Enter the share of additions distributable to this partner or shareholder from
Form IL-1065, Lines 15 through 20 and Line 22.
2 _________________
3 Add Lines 1 and 2. 3 _________________
4 Enter the share of subtractions distributable to this partner or shareholder from
Form IL-1065, Lines 24 through 25 and 28 through 33. 4 _________________
5 Subtract Line 4 from Line 3. If Line 3 is greater than Line 4 (income),
enter the result as a positive amount in Line E for this partner or shareholder.
If Line 4 is greater than Line 3 (loss), enter the result as a negative amount in
Line E for this partner or shareholder. 5 _________________
How do I determine the amounts to report in
Section B, Lines G through J?
Before completing Illinois Schedule B you must complete
Schedule(s) K-1-P and Schedule(s) K-1-P(3) or Schedule(s) K-1-P(4)
for each of your nonresident members, as applicable. The amounts
reported on those schedules will be used to complete Illinois
Schedule B, Section B, Lines G through J.
See Schedule K-1-P(1) for instructions and more information about
Schedule K-1-P(3). See Schedule K-1-P(4) instructions for more
information about Schedule K-1-P(4).
What do I report in Section B, Line K?
Line K is used to report the PTE tax credit you distribute to your
partners if you elected to le and pay pass-through entity tax.
How do I determine the amounts to report in
Section B, Line K?
Before completing Illinois Schedule B, Line K, you must determine
each member’s portion of the PTE tax credit using the formula in the
Schedule B, Section B, Line K instructions.
What do I report in Section B, Line L?
Line L is used to report the PTE tax credit you receive and distribute
to your partners. Do not include any PTE tax you are paying on
this line.
How do I determine the amounts to report in
Section B, Line L?
Use the Schedule(s) K-1-P or K-1-T you received to determine the
amount of PTE tax credit you received. Distribute the PTE tax credit
based on each member’s share.
Specic Instructions
Section A: Total members’ information
Complete Schedule(s) K-1-P and Schedule(s) K-1-P(3),
as applicable, and all of Illinois Schedule B, Section B, before
completing Section A.
Illinois Schedule B, Section A should be completed using the totals
from Illinois Schedule B, Section B. When you submit your return you
should only attach a single page of Section A. If you require multiple
pages of Section B, you may attach as many pages of Section B as
required behind Section A.
Lines 1 through 3 — Report amounts for both resident and
nonresident members.
Line 1 — Add the amounts you reported on Step 3, Column A,
Line 10 through Line 19, of all the Schedule(s) K-1-P you issued to
your partners and enter the total here. Include amounts you reported
to both your resident and nonresident members.
Line 2 — Add the amounts you reported on Step 7, Line 52a
through Line 52x, and Step 7, Lines 53a through 53b, of all the
Schedule(s) K-1-P you issued to your partners and enter the total
here. Include amounts you reported to both your resident and
nonresident members.
Line 3 — Add the amounts shown in Section B, Line E for all the
partners or shareholders for which you have checked the box in
Section B, Line D.
Do not include
• partners that are identied as individuals or estates in
Section B, Line B, or
• grantor trusts or other disregarded entities whose
grantor or owner is an individual or estate.
Enter the total amount on this line. If this is a
• positive amount, enter this amount on your Form IL-1065, Line 27.
• negative amount (loss), enter this amount as a positive amount on
your Form IL-1065, Line 21.
Lines 4 through 5 — Report amounts for nonresident
members only.
Line 4a — Enter the total amount of pass-through withholding or
investment partnership withholding you reported on the Schedule(s)
K-1-P you issued to your nonresident individual members only.
Total the amounts reported in Section B, Line J, for members that are
identied with an “I” in Section B, Line B, and enter it here.
Line 4b — Enter the total amount of pass-through withholding or
investment partnership withholding you reported on the Schedule(s)
K-1-P you issued to your nonresident estate members only. Total
the amounts reported in Section B, Line J, for members that are
identied with an “M” in Section B, Line B, and enter it here.
Line 4c — Enter the total amount of pass-through withholding or
investment partnership withholding you reported on the Schedule(s)
K-1-P you issued to your partnership and S corporation members
only. Total the amounts reported in Section B, Line J, for members
that are identied with a “P” or “S” in Section B, Line B, and enter it
here.
Line 4d — Enter the total amount of pass-through withholding or
investment partnership withholding you reported on the Schedule(s)
K-1-P you issued to your nonresident trust members only.
Include members identied as an exempt organization (trust). Total
the amounts reported in Section B, Line J, for members that are
identied with a “T” or “A” in Section B, Line B, and enter it here.
Page 20 of 28IL-1065 Instructions (R-04/24)
Line 4e — Enter the total amount of pass-through withholding or
investment partnership withholding you reported on the Schedule(s)
K-1-P you issued to your C corporation members only. Include
members identied as an exempt organization (corporation). Total
the amounts reported in Section B, Line J, for members that are
identied with a “C” or “N” in Section B, Line B, and enter it here.
Line 5 — Add Section A, Lines 4a through 4e of this Illinois
Schedule B and enter this amount here and on
• Form IL-1065, Line 59a, for pass-through withholding, or
• Form IL-1065, Line 59b, for investment partnership withholding.
The amount on Line 5 should match the total amount from Schedule
B, Section B, Line J, for all members on all pages.
Lines 6 and 7 —
Line 6 — Add Section B, Line K, for all members of this Illinois
Schedule B and enter the total here. Enter zero if you paid
pass-through withholding.
Line 7 — Add Section B, Line L, for all members of this Illinois
Schedule B and enter the total here. This amount should equal the
total of all Schedule(s) K-1-P, Step 7, Line 53a, and Schedule(s)
K-1-T, Step 7, Line 50, you received. Attach copies of all
Schedule(s) K-1-P and K-1-T you received to your Form IL-1065.
If you completed multiple pages of Section B, complete Section A
one time reporting the totals from all pages of Section B. Place all
pages of Section B behind the single page of Section A, and attach
them to your return.
Section B: Members’ information
Columns 1 through 3 — Enter each member’s information
using the instructions below.
Line A — Enter the name and address of each partner or
shareholder. Use the following examples as a guide.
If the partner or shareholder is an individual, use the following
formats:
John Doe John and Mary Doe John Doe
111 W. Main Street 111 W Main Street % Mary Doe
Anytown Anytown 111 W Main St. #5A
IL 62666 IL 62666 Anytown
IL 62666
If the partner or shareholder is a trust or an estate, use the
following formats:
John Doe Bankruptcy Trust Estate of John Doe
% Mary Doe, Trustee 111 W Main St., Ste 4A
111 W Main Street, Suite 4A Anytown
Anytown IL 62666
IL 62666
If the partner or shareholder is a corporation (including
S corporations), or a partnership, use the following formats:
Illinois Big Business Group Illinois Small Business Group
% John Doe, VP Finance % Mary Doe
111 West Main Street, Suite 4 111 West Main Street
Anytown Anytown
IL 62666 IL 62666
Line B — Indicate the type of each partner’s or shareholder’s
organization. Enter
• “I” for individual
• “P” for partnership
• “M” for estate
• “T” for trust
• “C” for C corporation
• “S” for S corporation
• “A” for exempt organization (trust)
• “N” for exempt organization (corporation)
If this partner is a grantor trust or other disregarded entity,
enter the letter that corresponds to the tax type of the grantor or
owner.
Line C — Enter the entire Social Security number (SSN) or federal
employer identication number (FEIN) of each partner.
If the partner is a foreign entity and does not have an SSN
or FEIN, leave this line blank for that partner. If you leave this line
blank, you may be contacted for further information.
Line D — Check the box if the partner is subject to the Illinois
Personal Property Tax Replacement Income Tax or is an exempt
organization (including an Employee Stock Ownership Plan (ESOP)).
Individuals, estates, or grantor trusts and other disregarded entities
whose grantors or owners are individuals or estates are not subject
to this tax.
Line E — Enter the total amount of base income or loss distributable
to this partner, using the Line E Worksheet on Page 19. Enter the
amount from Line E Worksheet, Line 5, here. The total of all the
amounts in Line E must equal your total base income, computed
without regard to the addition claimed on your Form IL-1065, Step 4,
Line 21, or the subtraction claimed on your Form IL-1065, Step 5,
Lines 27.
Line F — If the partner was excluded from pass-through withholding
indicate the reason by entering
• “T” if you elect to pay PTE tax,
• “R” if the partner is an Illinois resident,
• “E” if the partner provided you a Form IL-1000-E, Certicate of
Exemption for Pass-through Withholding, indicating that they would
pay their own tax liability,
Partners who provide you Form IL-1000-E must not be
individual taxpayers.
• “P” if you are a publicly-traded partnership or an investment
partnership and therefore not required to make pass-through
withholding payments on behalf of your partners, or
• “N” if the partner or shareholder was an exempt organization and
you did not make pass-through withholding payments on their
behalf.
Taxpayers are not required to make pass-through
withholding payments on behalf of their exempt organization
members, but may do so for tax year ending on or after
December 31, 2014.
If you elected to make pass-through withholding payments on behalf
of an exempt organization member, leave this line blank for that
member and complete Lines G through J.
Lines G through J — Provide the following information from the
Schedule(s) K-1-P and Schedule(s) K-1-P(3) or Schedule(s) K-1-P(4)
you completed for each member listed.
Investment partnerships do not complete Lines G through I.
Line G — Enter the amount you reported on Step 3, Line 12, of the
Schedule K-1-P(3) you completed for this member. This amount is this
member’s share of Illinois income subject to pass-through withholding.
This amount is a dollar amount. Do not list a percentage on
this line.
Line H — Total the amount you reported on Step 3, Line 13, and
Step 3, Line 16, of the Schedule K-1-P(3) you completed for this
member. Enter that amount on Line H for this member. This amount is
this member’s pass-through withholding before credits.
Line I — Total the amount you reported on Step 3, Line 14, and
Step 3, Line 17, of the Schedule K-1-P(3) you completed for this
member. Enter that amount on Line I for this member. This amount is
this member’s distributable share of credits.
Page 21 of 28IL-1065 Instructions (R-04/24)
Line J — Enter the amount of pass-through withholding or
investment partnership withholding that you made on behalf of
each member and reported to them on Schedule K-1-P, Step 7, Line
55. This should match the amount reported on Step 3, Line 19, of the
Schedule K-1-P(3), or on Step 4, Line 14, of Schedule K-1-P(4), you
completed for this member.
For partnerships other than those that qualify as investment
partnerships, this line should be blank if you elected to pay PTE tax.
Lines K and L - If the pass-through entity is itself a member in
an electing pass-through entity, the credit for PTE tax paid by the
electing pass-through entity passes through to its members as
follows:
• If the pass-through entity does not make the election to
pay PTE tax, it will only be passing through each member’s
distributive share of the PTE tax credit that it received on
Schedule(s) K-1-P from electing pass-through entities in which it
is a member (Line L).
• If the pass-through entity does make the election to pay PTE
tax, then it passes through to its members both
• the credit for the PTE tax it pays (Line K) and
• each member’s distributive share of the PTE tax credit it
received from electing pass-through entities in which it is a
member (Line L).
Add each member’s Line K and Line L. Enter the total on each
member’s Schedule K-1-P, Step 7, Line 53a.
Investment partnerships are allowed to use PTE tax credit
that was distributed to them to oset their investment partnership
withholding liability. Investment partnerships should reduce the
amount of PTE tax credit available for distribution to its partners by
the amount used to oset their investment partnership withholding
liability as calculated on Illinois Schedule(s) K-1-P(4). See the
Schedule K-1-P(4) instructions for more information.
Line K — Enter the member’s share of the PTE tax credit. To
determine the share of PTE tax credit due for each member, multiply
the member’s distributive share of pass-through entity income
reported on Form IL-1065, Line 60, by 4.95 percent (.0495).
The total credits allocated to all members may not
exceed the PTE liability reported on Form IL-1065, Line 61. The total
credits may also not exceed the PTE amount actually paid to IDOR.
If you overpaid your PTE liability, the overpayment may be refunded
to the electing partnership or S corporation.
Include this amount on each member’s Schedule K-1-P, Step 7,
Line 53a.
This line should be blank if you made pass-through
withholding payments.
Member’s Schedule B, Line E amount
×
Total
PTE
tax paid
=
Member’s
share of PTE
tax credit
Total amount of Schedule B, Line E
Line L — Enter each member’s distributive share of PTE tax credit
you are passing through from Schedule(s) K-1-P or K-1-T you
received. The PTE tax credit is passed through to your members
in the same proportion that the pass-through income is distributed
to your members. Also include this amount on each member’s
Schedule K-1-P, Step 7, Line 53a.
If you have more than three members to report, and additional
space is needed, complete and attach additional pages of Illinois
Schedule B, Section B. After you have completed Section B, listing
all required amounts for your members, complete the single page of
Illinois Schedule B, Section A.
Page 22 of 28IL-1065 Instructions (R-04/24)
Appendix A - Extension Tax Payment Worksheet
Use this worksheet if all of the following apply to you:
• you are required to le Form IL-1065,
• you cannot le your annual tax return by the due date, and
• you complete this worksheet and determine you owe a tentative tax.
If Line 7 of the worksheet shows you owe tentative tax, pay the full amount due either by ling and paying with Form IL-1065-V or by making
your payment electronically. An extension of time to le does not extend the amount of time you have to make your payment.
Reminder: Entities electing to pay PTE tax must make estimated payments if their total tax due is expected to be greater than $500. See
Appendix C.
Extension Tax Payment Worksheet (for your records)
1 Enter the total tax you expect to owe for this tax year. 1
2 Enter the total amount of estimated tax payments or prepayments you made and
any overpayment you elected to be credited for this tax year. 2
3 Enter any withholding reported to you and pass-through withholding (including any eligible investment
partnership withholding) made on your behalf for this tax year. 3
4 Enter the amount of any previous tax payment you have made for this tax year. 4
5 Enter the estimated replacement tax investment credits. 5
6 Add lines 2 through 5 and enter the result here. 6
7 Subtract Line 6 from Line 1. This is your tentative tax due. Enter the result here and on
Form IL-1065-V. 7
Extension Tax Payment Worksheet Instructions
Line 1 — Enter the total amount of replacement tax you expect to owe for this tax year (including recapture of investment credits using
Schedule 4255 and pass-through withholding payments you will owe on behalf of your members or PTE tax you elect to pay on
Schedule B).
Line 2 — Enter the total amount of estimated tax payments or prepayments you made and any overpayment you elected to be credited for
this tax year.
Line 3 — Enter the total amount of Illinois income tax withheld on Form(s) W-2G and the amount of pass-through withholding (including any
eligible investment partnership withholding) paid on your behalf and reported to you on Illinois Schedule(s) K-1-P or K-1-T.
Line 4 — Enter the amount of any previous tax payment you have made for this tax year.
Line 5 — Enter the amount of any estimated replacement tax investment credits from Form IL-477, Replacement Tax Investment Credit.
Line 6 — Add Lines 2 through 5. This is your total tax payments and credits.
Line 7 — Subtract Line 6 from Line 1. This is your tentative tax due. If Line 7 is $1 or more, you must pay the amount due. If Line 7 is less
than $1, you do not have to pay. Do not attach your federal Form 7004 to your Form IL-1065-V.
Pay electronically at tax.illinois.gov or use Form IL-1065-V, Payment Voucher for Partnership Replacement Tax.
Failure to use the correct voucher for your payments may result in your payment being misapplied, penalties and interest, a delay in the
processing of your return, or a delay in the generation of any overpayment.
Page 23 of 28IL-1065 Instructions (R-04/24)
Appendix B - Pass-through Withholding Prepayment Worksheets
Use this worksheet to determine the amount to voluntarily prepay pass-through withholding on behalf of your partners.
Pass-through withholding prepayments are entirely voluntary; however, we suggest that you make your prepayments in four equal
installments during the course of a year.
Use Appendix C to prepay your own estimated tax liability, including investment partnership withholding and PTE tax.
If you are an investment partnership or elect to le and pay PTE tax, do not use this worksheet. Investment
partnerships and taxpayers electing to le and pay PTE tax cannot report and pay pass-through withholding for their members.
Check the following boxes to determine which worksheets you should complete. (You may check multiple boxes.)
1 If you have nonresident individual and estate members that you wish to voluntarily prepay pass-through
withholding on behalf of, check this box and complete Worksheet 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2 If you have partnership or S corporation members that you wish to voluntarily prepay pass-through withholding
on behalf of, check this box and complete Worksheet 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3 If you have nonresident trust members that you wish to voluntarily prepay pass-through withholding on behalf of,
check this box and complete Worksheet 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4 If you have corporation members that you wish to voluntarily prepay pass-through withholding on behalf of, check
this box and complete Worksheet 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Once the worksheets are complete, add the total from each worksheet:
Worksheet 1, Line 7 ____________
Worksheet 2, Line 7 ____________
Worksheet 3, Line 11 ____________
Worksheet 4, Line 11 ____________
TOTAL _____________
This is the amount of each of your voluntary quarterly prepayments for pass-through withholding. Add this total to the amount from
Appendix C, Step 3, Line 27 to determine your voluntary quarterly prepayments to be made with Form IL-1065-V. These payments may be
made at any time, up to and including the original due date of your return.
Pay electronically at tax.illinois.gov or use Form IL-1065-V to mail your payment.
Failure to use the correct voucher for your pre-payments may result in your payment being misapplied, penalties and interest, a delay in the
processing of your return, or a delay in the generation of any overpayment.
Worksheet 1: Figure your pass-through withholding prepayments for nonresident individual and estate members. If you have nonresident
individual and estate members that you wish to voluntarily prepay pass-through withholding on behalf of, complete this worksheet to
determine the amount of your prepayment. Keep this record for your les.
1 Enter your nonresident individual and estate members’ share of business income apportioned
to Illinois expected in the tax year (cannot be less than zero). 1
2 Enter your nonresident individual and estate members’ share of nonbusiness income allocable
to Illinois expected in the tax year (cannot be less than zero). 2
3 Add Lines 1 and 2 and enter the result. 3
4 Multiply Line 3 by 4.95 percent (.0495) and enter the result. 4
5 Enter the amount of Illinois income tax credits expected in the tax year to be passed to the
members whose income is included on Lines 1 or 2. 5
6 Subtract Line 5 from Line 4 and enter the result. 6
7 Divide Line 6 by 4. This is the amount of each of your voluntary prepayments for nonresident
individual and estate members. 7
Page 24 of 28IL-1065 Instructions (R-04/24)
Appendix B - continued
Worksheet 2: Figure your pass-through withholding prepayments for partnership or S corporation members. If you have partnership or
S corporation members that you wish to voluntarily prepay pass-through withholding for, complete this worksheet to determine the amount of
your prepayment. Keep this record for your les.
1 Enter your partnership or S corporation members’ share of business income apportioned
to Illinois expected in the tax year (cannot be less than zero). 1
2 Enter your partnership or S corporation members’ share of nonbusiness income allocable
to Illinois expected in the tax year (cannot be less than zero). 2
3 Add Lines 1 and 2 and enter the result. 3
4 Multiply Line 3 by 1.5 percent (.015) and enter the result. 4
5 Enter the amount of Illinois replacement tax investment credits expected in the tax year to be passed
to the members whose income is included on Lines 1 or 2. 5
6 Subtract Line 5 from Line 4 and enter the result. 6
7 Divide Line 6 by 4. This is the amount of each of your voluntary prepayments for partnership or
S corporation members. 7
Worksheet 3: Figure your pass-through withholding prepayments for nonresident trust members. If you have nonresident trust members
that you wish to voluntarily prepay pass-through withholding for, complete this worksheet to determine the amount of your prepayment. Keep
this record for your les.
1 Enter your nonresident trust members’ share of business income apportioned to Illinois
expected in the tax year (cannot be less than zero). 1
2 Enter your nonresident trust members’ share of nonbusiness income allocable to Illinois
expected in the tax year (cannot be less than zero). 2
3 Add Lines 1 and 2 and enter the result. 3
4 Multiply Line 3 by 1.5 percent (.015) and enter the result. 4
5 Enter the amount of Illinois replacement tax investment credits expected in the tax year to be
passed to the members whose income is included on Lines 1 or 2. 5
6 Subtract Line 5 from Line 4 and enter the result. 6
7 Multiply Line 3 by 4.95 percent (.0495) and enter the result. 7
8 Enter the amount of Illinois income tax credits expected in the tax year to be passed to the
members whose income is included on Lines 1 or 2. 8
9 Subtract Line 8 from Line 7 and enter the result. 9
10 Add Line 6 and Line 9 and enter the result. 10
11 Divide Line 10 by 4. This is the amount of each of your voluntary prepayments for nonresident
trust members. 11
Page 25 of 28IL-1065 Instructions (R-04/24)
Appendix B - continued
Worksheet 4: Figure your pass-through withholding prepayments for corporation members. If you have corporation members that you
wish to voluntarily prepay pass-through withholding for, complete this worksheet to determine the amount of your prepayment. Keep this
record for your les.
1 Enter your corporation members’ share of business income apportioned to Illinois expected in
the tax year (cannot be less than zero). 1
2 Enter your corporation members’ share of nonbusiness income allocable to Illinois expected in
the tax year (cannot be less than zero). 2
3 Add Lines 1 and 2 and enter the result. 3
4 Multiply Line 3 by 2.5 percent (.025) and enter the result. 4
5 Enter the amount of Illinois replacement tax investment credits expected in the tax year to be
passed to the members whose income is included on Lines 1 or 2. 5
6 Subtract Line 5 from Line 4 and enter the result. 6
7 Multiply Line 3 by 7 percent (.07) and enter the result. 7
8 Enter the amount of Illinois income tax credits expected in the tax year to be passed to the
members whose income is included on Lines 1 or 2. 8
9 Subtract Line 8 from Line 7 and enter the result. 9
10 Add Line 6 and Line 9 and enter the result. 10
11 Divide Line 10 by 4. This is the amount of each of your voluntary prepayments for corporation
members. 11
Appendix C - Estimated Payment and Prepayment Worksheet
Instructions
If you elect to le and pay PTE tax and reasonably expect your total tax liability, including replacement tax and PTE tax, to
exceed $500 after Illinois tax credits and withholding payments made on your behalf, you are required to make estimated payments.
Estimated Payments are due on the 15th day of the 4th, 6th, 9th, and 12th months of the tax year. Complete Steps 1, 2, and 3 of this
worksheet to compute your next tax year’s estimated tax payments.
If you elect to le and pay PTE tax but you do not expect your tax liability, including replacement tax and PTE tax, to exceed $500,
you may voluntarily prepay next year’s taxes including PTE tax. Complete Steps 1, 2, and 3 of this worksheet to determine the amount of
your quarterly prepayment.
If you do not elect to le and pay PTE tax, you may voluntarily prepay next year’s tax liability. Complete Steps 2 and 3 of this worksheet
to determine the amount of your quarterly tax liability prepayment. If you completed Appendix B, add the total from Step 3 to the total
amount from Appendix B to determine your quarterly prepayments to be made with Form IL-1065-V.
If you are an investment partnership with an expected investment partnership withholding liability, are electing to le and pay PTE
tax, and reasonably expect your total tax liability to exceed $500 after Illinois tax credits and withholding payments made on your
behalf, you are required to make estimated payments. Estimated Payments are due on the 15th day of the 4th, 6th, 9th, and 12th months
of the tax year. Complete Steps 1 and 4 of this worksheet to compute your next tax year’s estimated tax payments.
If you are an investment partnership with an expected investment partnership withholding liability and are electing to le and
pay PTE tax, but do not expect your total tax liability to exceed $500, you may voluntarily prepay by completing Steps 1 and 4 of this
worksheet.
If you are an investment partnership with an expected investment partnership withholding liability but are not electing to le and
pay PTE tax, you may voluntarily prepay by completing Step 4 of this worksheet.
If your income or your original estimated tax changes during the year, complete Step 5 of this worksheet to determine your adjusted
payment.
Keep this record for your les.
Pay electronically at tax.illinois.gov or use Form IL-1065-V to mail your payment.
Failure to use the correct voucher for your estimated payments or prepayments may result in your payment being misapplied, penalties and
interest, a delay in the processing of your return, or a delay in the generation of any overpayment.
Page 26 of 28IL-1065 Instructions (R-04/24)
Appendix C - continued
Step 1 - Figure your PTE Tax - Complete Step 1 only if you are ling and paying PTE tax.
1a Enter the amount of base income (Line 35) expected in the next tax year.
Investment partnerships - Subtract any income subject to investment partnership withholding
from the base income (Line 35) amount. 1a
00
1b Enter the amount of distributions included in Line 1a for retired partners whose distributions are exempt
from tax under 35 ILCS 5/203(a)(2)(F). 1b
00
1 Subtract Line 1b from Line 1a. 1
00
2a Enter the amount of Personal service income or reasonable
allowance for compensation of partners expected in the
next tax year (Line 26). 2a
00
2b Enter the amount of income distributable to a partner subject to
replacement tax expected in the next tax year (Line 27). 2b
00
3 Add Lines 2a and 2b. 3
00
4 PTE base income. Add Lines 1 and 3. 4
00
5 Enter the amount of nonbusiness income or loss expected in the next tax year. 5
00
6 Enter the amount of business income or loss included in Line 4 from non-unitary partnerships,
partnerships included on a Schedule UB, S corporations, trusts, or estates expected in the
next tax year. 6
00
7 Add Lines 5 and 6. 7
00
8 Expected base income or loss. Subtract Line 7 from Line 4. 8
00
9 Enter the amount of total sales everywhere expected in
the next tax year. 9
00
10 Enter the amount of total sales inside Illinois expected in
the next tax year. 10
00
11 Divide Line 10 by Line 9. Round to six decimal places. 11
12 Business income or loss apportionable to Illinois expected in the next tax year.
Multiply Line 8 by Line 11. 12
00
13 Enter the amount of nonbusiness income or loss allocable to Illinois expected in the next tax year. 13
00
14 Enter the amount of business income or loss apportionable to Illinois from non-unitary partnerships,
partnerships included on a Schedule UB, S corporations, trusts, or estates expected in the next tax year.
Do not include any income from a partnership or S corporation that will make the PTE election. 14
00
15 PTE Income. Add Lines 12 through 14. 15
00
16 PTE Tax. Multiply Line 15 by 4.95 percent (.0495). 16
00
Step 2 - Figure your Replacement Tax
17 Enter the amount of Illinois net income expected in the next tax year. 17
00
18 Multiply Line 17 by 1.5 percent (.015) and enter the result. 18
00
19 Enter the amount of recapture of investment credits expected in the next tax year. 19
00
20 Add Lines 18 and 19. Enter the result. 20
00
21 Enter the amount of Illinois tax credits expected in the next tax year as calculated on the
corresponding Form IL-477 or Schedule 1299-A. 20
00
22 Enter the amount of pass-through withholding (including any eligible investment partnership withholding)
expected to be made on your behalf in the next tax year on any Schedule K-1-P or Schedule K-1-T
you receive. 22
00
23 Enter the amount of any Illinois gambling and sports wagering winnings withholding shown on
the next tax year Form W-2G you expect to receive. 23
00
24 Add Lines 21 through 23. Enter the result. 24
00
25 Subtract Line 24 from Line 20 and enter the result. 25
00
Step 3 - Figure your Estimated Payments or Prepayments
26 If you completed Step 1, add Lines 16 and 25. Otherwise, enter the amount from Line 25. 26
00
27 Divide Line 26 by 4. This is the amount of your quarterly estimated payments or prepayments. 27
00
Page 27 of 28IL-1065 Instructions (R-04/24)
Special Note
You may use pass-through withholding (including any eligible investment partnership withholding) made on your behalf on any
Schedule K-1-P or K-1-T you received to reduce the estimated tax payment for the quarter in which the tax year shown on the Schedule
K-1-P or K-1-T falls and any subsequent tax payment until the entire credit is used.
You may use Illinois gambling and sports wagering withholding shown on any Form W-2G you receive to reduce the estimated tax
payment for the quarter in which the gambling winnings were received and any subsequent tax payment until the entire credit is used.
If you made the election to credit a prior year overpayment to the next tax year and
• the election was made on or before the extended due date of that prior year return, use the credit to reduce the rst estimated tax
payment and any subsequent tax payments until the entire credit is used.
• the election was made after the extended due date of that prior year return, the credit will be treated as paid on the date you
submitted the election. If that payment date is on or before an estimated payment due date, you may use the credit to reduce that
estimated tax payment and any subsequent tax payments until the entire credit is used.
Appendix C - continued
Step 4 - Figure your investment partnership withholding - Complete Step 4 only if you are an investment partnership.
1 Enter the total amount of Illinois apportioned business income from other partnerships
under IITA Section 305(a). 1
00
2 Enter the total amount of Illinois allocated nonbusiness income from other partnerships under
IITA Sections 305(b) and 303 (other than nonbusiness income that is allocated based on
commercial domicile) 2
00
3 Add Lines 1 and 2. This is the amount of income subject to investment partnership withholding. 3
00
4a Enter the share of the amount on Line 3 for your partners identied
as estates, partnerships, S corporations, and nonresident individuals. 4a
00
4 Multiply the amount on Line 4a by 4.95 percent (.0495). 4
00
5a Enter the share of the amount on Line 3 for your partners identied
as trusts. 5a
00
5 Multiply the amount on Line 5a by 6.45 percent (.0645). 5
00
6a Enter the share of the amount on Line 3 for your partners identied
as corporations. 6a
00
6 Multiply the amount on Line 6a by 9.5 percent (.095). 6
00
7 Add Lines 4, 5, and 6. 7
00
8 Enter the amount of PTE tax credit you expect to be made on your behalf in the next tax year
and in which you want to use to oset your investment partnership withholding. 8
00
9 Subtract Line 7 by Line 8. 9
00
10 Enter the amount from Appendix C, Step 1, Line 16, if applicable. 10
00
11 Add Lines 9 and 10. 11
00
12 Enter the amount of Illinois tax credits expected to be earned in the next tax year as would be
calculated on the Form IL-477 or Schedule 1299-A. 12
00
13 Enter the amount of pass-through withholding (including any eligible investment partnership withholding)
expected to be made on your behalf in the next tax year as would be reported to you on any
Schedule K-1-P or Schedule K-1-T you receive. 13
00
14 Enter the amount of any Illinois gambling and sports wagering winnings withholding expected
to be made on your behalf in the next tax year as would be reported to you on Form W-2G. 14
00
15 Add Lines 12 through 14. Enter the result. 15
00
16 Subtract Line 15 from Line 11 and enter the result. 16
00
17 Divide Line 16 by 4. This is the amount of your quarterly estimated payments or prepayments. 17
00
Page 28 of 28IL-1065 Instructions (R-04/24)
Step 5 - Amended worksheet - Complete Step 5 if a change occurs in your original estimated tax.
1 Enter the amount of PTE income expected in the next tax year.
If you are not electing to le and pay PTE tax, enter zero. 1
2 PTE Tax. Multiply Line 1 by 4.95 percent ( .0495). 2
3 Enter the amount of Illinois net income expected in the next tax year. 3
4 Multiply Line 3 by 1.5 percent (.015) and enter the result. 4
5 Enter the amount of recapture of investment credits expected in the next tax year. 5
6 Replacement Tax. Add Lines 4 through 5 and enter the result. 6
7 Enter the amount of Illinois tax credits expected in the next tax year as calculated on the corresponding
Form IL-477 or Schedule 1299-A. 7
8 Enter the amount of pass-through withholding (including any eligible investment partnership withholding)
expected to be made on your behalf in the next tax year on any Schedule K-1-P or Schedule K-1-T
you receive. 8
9 Enter the amount of any Illinois gambling and sports wagering winning withholding expected
on the next tax year Form W-2G. 9
10 Add Lines 7 through 9 and enter the result. 10
11 Subtract Line 10 from Line 6 and enter the result. This amount may be negative. 11
12 Add Line 2 and 11. 12
13 Divide Line 12 by 4. 13
14 Multiply Line 13 by the number of previously due estimated payments. 14
15 Enter the amount of any estimated tax payments actually paid, timely prior year overpayments, timely
pass-through withholding (including any eligible investment partnership withholding) and pass-through
entity tax credit paid on your behalf, or timely Illinois gambling and sports wagering winnings
withholding shown on Form W-2G you received. 15
16 Subtract Line 15 from Line 14 and enter the result. This amount may be negative. 16
17 Add Lines 13 and 16 and enter the result.
If positive, this is the amount due on your next payment due date.
If zero or negative, the amount due on your next payment due date is zero.
If Line 17 is negative, continue to Line 18. Otherwise, stop here. 17
18 If Line 17 is negative, enter that amount as a positive number. 18
19 Subtract Line 18 from Line 13 and enter the result.
This is the amount due on the following due date, if applicable. 19
Pay electronically at tax.illinois.gov or use Form IL-1065-V to mail your payment.
Failure to use the correct voucher for your estimated payments or prepayments may result in your payment being misapplied, penalties and
interest, a delay in the processing of your return, or a delay in the generation of any overpayment.
