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News – Monday, June 30, 2025
FY 2025-29, Legislative Income Tax Changes that May Increase Current Tax Year Liabilities
Public Act 104-0006 made several changes to the Illinois Income Tax Act (IITA) which will affect many taxpayers and may increase current tax year liabilities for certain taxpayers.
Effective for tax years ending on or after June 16, 2025, gains and losses from sales or exchanges of shares in Subchapter S corporations or from interest in partnerships, other than investment partnerships, are allocable to Illinois if the pass-through entity is taxable in Illinois.
Effective for tax years ending on or after December 31, 2025:
- Illinois adopts the Finnigan method of apportionment when computing the sales factor numerator and applying the throwback and throw-out rules.
- Two Safe Harbor exceptions have been removed from the 80/20 company addback provisions for interest and intangible expense.
- Illinois aligns with federal filing guidelines regarding allocations of certain interest expenses for taxpayers subject to the IRC Sec. 163(j) deduction limit.
- The dividend received deduction for Global Intangible Low-Taxed Income (GILTI) is limited to 50% of the amount recognized.
See FY 2025-29 Bulletin, Legislative Income Tax Changes that May Increase Current Tax Year Liabilities, for more information.