IL-477: Replacement Tax Investment Credits (2024)
Illinois · Illinois DOR · Used for tax years 2024
Form IL-477 calculates Illinois Replacement Tax Investment Credits for qualified property placed in service during the tax year. It includes credits received from partnerships and S corporations, prior-year credit carryforwards, and a worksheet for an additional credit based on e
Who files this form
Form IL-477 figures the Replacement Tax Investment Credit for qualified property placed in service during the tax year, along with credit carryforwards and distributive shares from partnerships and S corporations.
Attach it to Form IL-1120, IL-1065, IL-1120-ST, IL-1041, or IL-990-T, as applicable.
When it's due
For the 2024 tax-year form, Step 3 requires you to affirm that the listed credits are valid and based on costs incurred under a binding contract entered into on or before December 31, 2018.
This is a contract cutoff. The form does not print a filing due date.
What you'll need
Have these details and forms ready, as applicable:
- Your name as shown on your return and your federal employer identification number (FEIN).
- Each qualified property's description, month and year placed in service, useful life, new or used status, business activity, location of use, and basis. For used property, provide the abbreviation of the state where it was previously used.
- Schedule(s) K-1-P for any distributive share of credit from partnerships or S corporations. Attach these schedules.
- Your credit carryforward from a previous year and total replacement tax.
- Illinois Department of Employment Security Form UI-3/40, Line 1, for covered-worker counts if completing the base employment worksheet.
- For partnerships and S corporations, the percentage of ownership attributable to partners or shareholders subject to replacement tax.
- For trusts, Form IL-1041, Schedule CR, Line 60.
How to file
Attach Form IL-477 to your applicable return: Form IL-1120, IL-1065, IL-1120-ST, IL-1041, or IL-990-T.
Attach Schedule(s) K-1-P if reporting a distributive share of credit on Line 4. Enter the credit from Line 13 on your return.
In Step 3, check the box to affirm that the listed credits are valid and meet the binding-contract requirement.
The provided form does not give a mailing address or e-filing instructions.
Common mistakes
- Completing the employment worksheet for a business new to Illinois. The note in Step 2 says to check the box and skip Lines 15 through 22. A business new to Illinois automatically qualifies for the additional credit.
- Leaving out the prior-use state for used property. The form says to enter the abbreviation of the state where the property was previously used.
- Omitting required information. The form warns that disclosure is required and failure to provide information could result in a penalty.
Questions people ask
How is the initial property credit calculated?
For each listed qualified property, multiply its basis in Column G by 0.5% (.005) and enter the result in Column H. Line 2 totals each column.
Does a business new to Illinois qualify for an additional credit?
Yes. Enter the amount from Line 2, Column H, on Line 3 and check the box in Step 2. Do not complete Lines 15 through 22.
What happens if average base employment did not increase?
If Line 19 is zero or negative, stop the employment calculation, enter zero on Line 3, and continue to Line 4. You do not qualify for the additional credit.
How much credit can I use this year?
Line 13 is the lesser of Line 9, your total available investment credit, or Line 12, your replacement tax after the specified trust credit adjustment. Enter that amount on your return.
Can unused credit be carried forward?
Yes. Line 14 identifies excess credit available to carry forward five years. Subtract Line 13 from Line 9, and enter zero if the result is negative.