Schedule 4255: Recapture of Investment Tax Credits (2025)
Illinois · Illinois DOR · Used for tax years 2025
Illinois Schedule 4255 calculates the recapture of investment tax credits when property becomes disqualified. It also reports additional income tax credit recapture and recapture amounts passed through from partnerships and S corporations.
Who files this form
Schedule 4255 is used to report recapture of these investment tax credits:
- Enterprise Zone or River Edge Redevelopment Zone Investment Credit
- High Impact Business Investment Credit
- REV Illinois Investment Credit
- Replacement Tax Investment Credit
- MICRO Investment Credit
It also includes a section for additional income tax credit recapture, including amounts passed through from partnerships and S corporations. The form does not explain what events trigger a recapture requirement.
What you'll need
Have the information needed for the applicable parts of the form:
- Your name as shown on your return and your Social Security number or federal employer identification number.
- The tax year ending month and year when the property was placed in service.
- Each property's description, original basis, credit rate, dates placed in service and disqualified, and reason for disqualification.
- The applicable zone name or project location.
- Your total property basis, original credit amount, and original tax amount.
- Any other Schedules 4255 filed this year and any Schedules K-1-P showing your share of recapture from partnerships or S corporations.
- Prior-year credit amounts requested in Step 7, if you have additional income tax credit recapture.
How to file
Attach Schedule 4255 to your applicable return: Form IL-1040, IL-1120, IL-1065, IL-1120-ST, IL-1041, or IL-990-T.
The supplied form does not provide a mailing address or instructions for mailing or e-filing.
Common mistakes
- Completing Step 7 on multiple schedules: If you attach multiple Schedules 4255, complete Step 7 only on the last schedule you complete.
- Completing Step 7 when it does not apply: Do not complete Step 7 if you have no additional income tax credit recapture amounts.
- Leaving out required information: The form warns that disclosure is required and failure to provide information could result in a penalty.
Questions people ask
How do I calculate the disqualified credit amount?
In Steps 1, 2, 3, and 5, multiply the original basis in Column E by the credit rate in Column G. In Step 4, multiply Column E by the credit rate in Column F.
What if the calculation on Line 17 is negative?
Enter zero if subtracting Line 14 from Line 16 gives a negative result.
Where do I report recapture passed through from a partnership or S corporation?
Report your distributive share from Schedule K-1-P on Line 19 for the investment credit recapture categories in Step 6. Report your distributive share of additional income tax credit recapture on Line 32.
Which additional credits are listed in Step 7?
Step 7 lists Angel Investment, EDGE, New Construction EDGE, Historic Preservation, New Markets Development, REV Illinois, REV Construction Jobs, MICRO Illinois, and MICRO Construction Jobs credits.