IL-477: Replacement Tax Investment Credits (2025)
Illinois · Illinois DOR · Used for tax years 2025
Form IL-477 calculates Illinois Replacement Tax Investment Credits for qualified property placed in service during the tax year. It reports current-year credits, credits received from partnerships and S corporations, prior-year carryforwards, and the credit available to use or ca
Who files this form
Use Form IL-477 to figure the Replacement Tax Investment Credit for qualified property placed in service during the tax year, include credits passed through from partnerships and S corporations, and apply credit carried forward from a previous year.
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 2025 form, Step 3 requires you to affirm that the listed credits are based on costs incurred under a binding contract entered into on or before December 31, 2018. This is a contract cutoff, not a filing deadline.
The form does not state a filing deadline.
What you'll need
Have these records and forms available, as applicable:
- Your return, including the name shown on it and your federal employer identification number (FEIN).
- Qualified property details: description, month and year placed in service, useful life, whether it is new or used, business activity, city or county of use, and basis. For used property, include the abbreviation of the state where it was previously used.
- Schedule(s) K-1-P for credits passed through from partnerships and S corporations. Attach these schedules.
- Records of credit carried forward from a previous year and your total replacement tax.
- Illinois Department of Employment Security Form UI-3/40, Line 1, for the current and preceding years if you must complete 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.
- Binding contract information needed to make the affirmation in Step 3.
How to file
Complete Form IL-477 and attach it to your applicable return: Form IL-1120, IL-1065, IL-1120-ST, IL-1041, or IL-990-T.
- Complete Step 1 to calculate the credit available and the amount you can use this year.
- Complete Step 2 if your business is not new to Illinois to determine whether you qualify for an additional credit. If your business is new to Illinois, check the Step 2 box and skip Lines 15 through 22.
- Check the Step 3 box to affirm that the listed credits are valid and meet the binding-contract requirement.
- Enter the credit from Line 13 on your return. Attach Schedule(s) K-1-P if you report passed-through credits on Line 4.
The form does not provide a mailing address or electronic filing directions.
Common mistakes
- Omitting the prior-use state for used property. The form asks for the abbreviation of the state where the property was previously used.
- Completing the employment worksheet for a business new to Illinois. Check the Step 2 box instead and do not complete Lines 15 through 22.
- Including employment entries for months you were not taxed by Illinois. Line 15 says to make entries only for months you were taxed by Illinois.
- Continuing the additional-credit calculation when Line 19 is zero or negative. Stop, enter zero on Line 3, and continue to Line 4. You do not qualify for the additional credit.
- Leaving out required information. The form warns that failure to provide required information could result in a penalty.
Questions people ask
What rate is used for the initial investment credit calculation?
For each qualified property entry, multiply the basis in Column G by 0.5% (.005) to calculate Column H.
Does a business new to Illinois qualify for an additional credit?
Yes. The form says a business new to Illinois automatically qualifies. Enter the amount from Line 2, Column H, on Line 3, check the box in Step 2, and skip Lines 15 through 22.
How much credit can I use this year?
Line 13 is the smaller of Line 9, your total available investment credit, or Line 12, your total replacement tax after subtracting the credit entered on Line 11 for trusts. Enter the Line 13 amount on your return.
Can unused credit be carried forward?
Yes. Line 14 shows the excess credit available to carry forward five years. Subtract Line 13 from Line 9 and enter zero if the result is negative.