Schedule CR (IL-1041): Credit for Tax Paid to Other States (2024)
Illinois · Illinois DOR · Used for tax years 2024
Illinois Schedule CR (IL-1041) calculates the credit for income tax paid to other states on income included in Illinois base income. It reports non-Illinois income, Illinois additions and subtractions, and the resulting income tax credit and, for trusts, replacement tax credit. A
Who files this form
The form says you should file Schedule CR if all of these apply:
- You were an Illinois resident or part-year resident during the tax year.
- You paid income tax to another state on income earned while you were an Illinois resident.
- You did not deduct that tax on federal Form 1041, Line 11, or you deducted it and added it back on Illinois Schedule M, Line 5.
- The income taxed by the other state is included in Illinois base income on Form IL-1041, Line 26.
Do not use this schedule if you did not pay income tax to both Illinois and another state on the same income, or if you are claiming a credit for the Michigan Single Business Tax.
What you'll need
Have these forms and records available:
- Your Form IL-1041, including the name and federal employer identification number (FEIN) to enter on Schedule CR.
- Your federal Form 1041 and the income and deduction amounts used to complete Step 2.
- Illinois Schedule M, if you added back income tax paid to another state.
- Records of income tax paid to other states on Illinois base income.
Attach Schedule CR and a copy of federal Form 1041, Page 1, with a detailed breakdown of federal Form 1041, Line 11, to Form IL-1041.
Keep your out-of-state tax returns with your records. You must send them to the department if requested.
How to file
Attach Schedule CR to your Form IL-1041. Also attach federal Form 1041, Page 1, and a detailed breakdown of the amount on federal Form 1041, Line 11.
After calculating the credit:
- Enter Schedule CR, Line 59, on Form IL-1041, Step 6, Line 45, for the income tax credit.
- Trusts only: Enter Schedule CR, Line 60, on Form IL-1041, Step 5, Line 37, for the replacement tax credit.
The supplied form does not give a mailing address or e-filing directions.
Common mistakes
- Claiming the credit without adding back deducted taxes. If you deducted another state's income tax on federal Form 1041, Line 11, you must add it back on Illinois Schedule M, Line 5, to qualify.
- Claiming a credit for the Michigan Single Business Tax. The form specifically says not to use Schedule CR for this tax.
- Missing required attachments. Attach Schedule CR, federal Form 1041, Page 1, and a detailed breakdown of federal Form 1041, Line 11, to Form IL-1041.
- Discarding out-of-state returns. Keep them with your records and send them if the department requests them.
- Overlooking reciprocal-state compensation rules. If you received employee compensation, such as salary received as income in respect of a decedent, from Iowa, Kentucky, Michigan, or Wisconsin, the form directs you to the Form IL-1040 Schedule CR instructions.
Questions people ask
What counts as another “state” for this credit?
The term includes U.S. states, the District of Columbia, Puerto Rico, U.S. territories or possessions, and their political subdivisions, such as counties and cities. It does not include foreign countries.
Do I attach my out-of-state tax returns?
The form says to keep those returns with your records and send them if requested. Attach Schedule CR and federal Form 1041, Page 1, with a detailed breakdown of Line 11, to Form IL-1041.
How do I round the Schedule CR decimal?
On Line 51, divide Line 50, Column B, by Line 50, Column A, and round to three decimal places. If Column B is greater than Column A, enter 1.000. Carry the decimal to Line 56.
Can a trust calculate a replacement tax credit?
Yes. For trusts only, Line 60 calculates the replacement tax credit by subtracting Line 59 from Line 58. Enter zero if the result is negative. Carry the amount to Form IL-1041, Step 5, Line 37.