Illinois Tax Form 1040 - Individual Income Tax Return Instructions

2007 Form IL-1040 Instructions

General Information

Who must ﬁle an Illinois tax return?

If you were

an Illinois resident, you must ﬁle Form IL-1040 if
- you were required to ﬁle a federal income tax return, or
- you were not required to ﬁle a federal income tax return, but your Illinois base income from Line 11 is greater than your Illinois exemption allowance.
an Illinois resident who worked in Iowa, Kentucky, Michigan, or Wisconsin, you must ﬁle Form IL-1040 and include as Illinois income any compensation you received from an employer in these states. Compensation paid to Illinois residents working in these states is taxed by Illinois. Based on reciprocal agreements between Illinois and these states, these states do not tax the compensation of Illinois residents.

If your employer in any of these states withheld that state’s tax from your compensation, you may ﬁle the correct form with that state to claim a refund.You may not use tax withheld by an employer in these states as a credit on your Illinois return.

a retired Illinois resident who ﬁled a federal return, you must ﬁle Form IL-1040. However, certain types of retirement income (e.g., pension, Social Security, railroad retirement, governmental deferred compensation) may be subtracted from your Illinois income. See the instructions for Line 5 and Publication 120, Retirement Income.
a part-year resident, you must ﬁle Form IL-1040 and Schedule NR, Nonresident and Part-Year Resident Computation of Illinois Tax, if
- you earned income from any source while you were a resident,
- you earned income from Illinois sources while you were not a resident, or
- you want a refund of any Illinois Income Tax withheld.
a nonresident, you must ﬁle Form IL-1040 and Schedule NR if
- you earned enough taxable income from Illinois sources to have a tax liability (i.e., your Illinois base income from Schedule NR, Step 5, Line 50, is greater than your Illinois exemption allowance on Schedule NR, Step 5, Line 54), or
- you want a refund of any Illinois Income Tax withheld in error.You must attach a letter of explanation from your employer.

Note: If you are a nonresident and your only income in Illinois is from one or more partnerships or S corporations that ﬁled a Form IL-1023-C, Composite Income and Replacement Tax Return, on your behalf, you are not required to ﬁle a Form IL-1040.

an Iowa, Kentucky, Michigan, or Wisconsin resident who worked in Illinois, you must ﬁle Form IL-1040 and Schedule NR if
- you received income in Illinois from sources other than wages, salaries, tips, and commissions, or
- you want a refund of any Illinois Income Tax withheld.

If you received wages, salaries, tips, and commissions from Illinois employers, you are not required to pay Illinois Income Tax on this income. This is based on reciprocal agreements between Illinois and these states.

The reciprocal agreements do not apply to any other income you might have received, such as Illinois lottery winnings.

an Illinois resident who was claimed as a dependent on your parents’ or another person’s return, you must ﬁle Form IL-1040 if
- your Illinois base income from Line 11 is greater than $2,000, or
- you want a refund of Illinois Income Tax withheld from your pay.

Note: If your parent reported your interest and dividend income through U.S. Form 8814, Parent’s Election to Report Child’s Interest and Dividends, do not count that income in determining if you must ﬁle your own Form IL-1040.

the surviving spouse or representative of a deceased taxpayer who was required to ﬁle in Illinois, you must ﬁle any return required of that taxpayer.
a student, you are not exempt from tax nor are there special residency provisions for you. However, income, such as certain scholarships or fellowships, that is not taxable under federal income tax law, is also not taxed by Illinois.
a nonresident alien, you must ﬁle Form IL-1040 if your income is taxed under federal income tax law. You must attach a completed copy of your U.S. 1040NR, U.S. Nonresident Alien Income Tax Return, or U.S. 1040NR-EZ, U.S. Income Tax Return for Certain Nonresident Aliens With No Dependents.

Even if you are not required to ﬁle Form IL-1040, you must ﬁle to get a refund of any Illinois Income Tax withheld from your pay or any estimated tax payments you made.

Who is an Illinois resident?

You are an Illinois resident if you were domiciled in Illinois for the entire tax year. Your domicile is the place where you reside and the place where you intend to return after temporary absences. Temporary absences may include duty in the U.S. Armed Forces, residence in a foreign country, out-of-state residence as a student, or out-of-state residence during the winter or summer. If you are absent from Illinois for one year or more, we will presume you are a nonresident of Illinois.

If you ﬁled a joint federal return and one spouse is an Illinois resident while the other spouse is a nonresident or a part-year resident, you may ﬁle separate Illinois returns. If you ﬁle a joint Illinois return, you will both be taxed as residents.

What is Illinois income?

Your Illinois income includes the adjusted gross income (AGI) amount ﬁgured on your federal return, plus any additional income that must be added to your AGI. Some of your income may be subtracted when ﬁguring your Illinois base income. See the Step-by-Step Instructions for details.

You should follow the federal law concerning passive activity income and losses.You are not required to reﬁgure your federal passive activity losses.

Also, federal law will govern the taxation of income from community property sources in the case of spouses who are residents of different states and who ﬁle separate returns.

How may I File

File your individual income tax return electronically by using

the internet,
a tax professional, or
tax preparation software.

Almost all taxpayers can ﬁle electronically. Visit our web site at tax.illinois.gov or see your tax professional for details.
If you do not wish to ﬁle electronically, you may use the paper Form IL-1040.

When must I file?

Your Illinois ﬁling period is the same as your federal ﬁling period. We will assume that you are ﬁling your Form IL-1040 for calendar year 2007 unless you indicate a different ﬁling period in the space provided at the top of the return. The due date for calendar year ﬁlers is April 15, 2008.

We grant an automatic six-month extension of time to ﬁle your return. If you receive a federal extension of more than six months, you are automatically allowed that extension for Illinois. These extensions do not grant you an extension of time to pay any tax you owe. If you determine that you will owe tax, you must ﬁle Form IL-505-I, Automatic Extension Payment for Individuals, to pay any tax you owe to avoid penalty and interest on tax not paid by April 15, 2008.

Will I owe penalties and interest?

You will owe

a late-ﬁ ling penalty if you do not ﬁle a return that we can process by the extended due date.
a late-payment penalty for tax not paid by the original due date of the return.
a late-payment penalty for underpayment of estimated tax if you were required to make estimated tax payments and failed to pay the required amount by the payment due dates.
a bad check penalty if your remittance is not honored by your ﬁnancial institution.
a cost of collection fee if you do not pay the amount you owe within 30 days of the date printed on any ITR-85, Individual Income Tax First and Final Bill, you receive.
a frivolous return penalty if you ﬁle a return that does not contain information necessary to ﬁgure the correct tax or shows a substantially incorrect tax, because you are taking a frivolous position or are trying to delay or interfere with collection of the tax.
interest on unpaid tax from the day after the original due date of your return through the date you pay the tax.

We will bill you for penalties and interest. For more information about penalties and interest, see Publication 103, Penalties and Interest for Illinois Taxes.

What if I cannot pay?

If you cannot pay the tax you owe but you can complete your return on time, ﬁle your return by the due date without the payment.This will prevent a late-ﬁling penalty from being assessed.You will, however, owe I cannot a late-payment penalty and interest on any tax you owe after the original due date, even if you have an pay? extension of time to ﬁle.

You have the option to pay the amount you owe electronically by using our web site or by credit card. See the instructions for Line 34.

When must I ﬁle an amended return?

You must ﬁle Form IL-1040-X, Amended Individual Income Tax Return, if

you discover that you made an error on your Illinois return after it was ﬁled, or
your federal return has been adjusted either by the Internal Revenue Service (IRS) or on a U.S. 1040X, Amended U.S. Individual Income Tax Return, you ﬁled; the change affects your Illinois income, additions, subtractions, exemptions, or credits; and the change is ﬁnal.

Note: If the federal change results in a refund, do not ﬁle Form IL-1040-X until you receive notiﬁcation that your change has been accepted by the IRS.

For more information, see Form IL-1040-X and instructions.

What if I have household employees?

Illinois does not allow you to use Form IL-1040 to pay your household employees’ Illinois withholding. For more details on how to pay Illinois withholding for your employees, see the instructions for Form UI-WIT, Combined Return for Household Employers, and Publication 121, Illinois Income Tax Withholding for Household Employees.

What if I change my address?

If you change your address after you ﬁle, visit our web site or call us to tell us your new address and the date you moved.

What if I am an injured spouse?

If you are ﬁling a joint tax return and all or a portion of your refund may be used to pay an unpaid liability owed by your spouse for any outstanding tax, penalties, and interest and for amounts owed to other agencies or governments, we may grant you injured spouse relief. Write “Injured Spouse” in red ink across the top of the front page of your Form IL-1040. For more information, see Publication 125, Injured and Innocent Spouse Relief.

What if I participated in a potentially abusive tax avoidance transaction?

If you participated in a potentially abusive tax avoidance transaction, commonly known as a “listed transaction,” during this tax year and were required to disclose that tax shelter to the IRS, you are also required to disclose that information to Illinois. You must send us two copies of the form you used to disclose the tax shelters to the IRS.You must

attach one copy to your tax return, and
mail a second copy to the Illinois Department of Revenue, P.O. Box 19029, Springﬁeld, Illinois 62794-9029.

Note: Employee beneﬁt plans and other subtractions allowed on Form IL-1040, Lines 5 through 9, are not tax shelters. For more information, contact the IRS or your federal income tax professional.

Step-by-Step Instructions

STEP 1: Personal Information

Line A

Social Security number

Write your Social Security number (SSN) and your spouse’s SSN, even if you are married ﬁling separate returns.

Note: If you do not qualify for a SSN and were issued an Individual Taxpayer Identiﬁcation Number (ITIN) by the IRS, write your ITIN.

Line B

Name and address

Use the label from the front of the booklet. If your preprinted name and address are incorrect, cross through them and write the correct information.

If you do not have a label, print your full name. If you are married and ﬁling a joint return, print both names as they appear on your federal return. If you are married and ﬁling separate returns, print only your full name. Do not print your spouse’s name. If your spouse’s name appears on your return, any refund will be issued in both names.

Filing a decedent’s return

When you are ﬁling a joint return as a surviving spouse,

use your label, or print your name and your spouse’s name on the appropriate lines.
cross through your spouse’s name, and write “deceased” and the date of death above your spouse’s name.
sign your name in the area provided for your signature, and write “ﬁling as surviving spouse” in place of the decedent’s signature.

If you, as the surviving spouse, are due a refund, the refund will be issued directly to you.

When you are ﬁling a return on behalf of a single deceased taxpayer,

print the name of the taxpayer on the appropriate line.
cross through the taxpayer’s name, and write “deceased” and the date of death above the decedent’s name.
write “in care of,” and the executor’s name and address.

A personal representative, such as an executor or administrator must sign and date the return. The representative’s title and telephone number must be provided.

Attach: If a refund is due, attach Form IL-1310, Statement of Person Claiming Refund Due a Deceased Taxpayer.

Foreign addresses

Write your street address on the “mailing address” line. Write the rest of the information on the “City, State, ZIP” line in the following order: City, province or state, and country. Follow the country’s practice for entering the postal code. Do not abbreviate the country name.

Line C

Filing status

Select the same ﬁling status you checked on your federal return, unless the note applies to you.

Note: If you ﬁle a joint federal return and one spouse is a full-year Illinois resident while the other is a part-year resident or a nonresident (e.g., military personnel), you may choose to ﬁle “married ﬁling separately.” In this case, each spouse must determine income and exemptions as if he or she had ﬁled separate federal returns.

If you choose to ﬁle a joint Illinois return, you must treat both your spouse and yourself as residents. This election is irrevocable for the tax year.You may be allowed a credit for income tax paid to another state on Schedule CR, Credit for Tax Paid to Other States.

STEP 2: Income

Line 1

Adjusted gross income. Write the adjusted gross income from your federal return. If you are not required to ﬁle a federal income tax return, use the 1040, U.S. Individual Income Tax Return, as a worksheet to determine your adjusted gross income.

Net operating loss (NOL). If you have a federal NOL this year, you may write a negative amount on Line 1. However, you must reduce that amount by any NOL that you carry back to prior years.

If you deducted an NOL carryforward on your federal return for this year, the amount on Line 1 should be your federal adjusted gross income computed without deducting the NOL carryforward, minus the amount of “Modiﬁed Taxable Income” on Line 9 of the federal Worksheet for NOL Carryover found in Table 1 of IRS Publication 536, Net Operating Losses (NOLs) for Individuals, Estates, and Trusts.

Line 2

Federally tax-exempt income. Write the amount of federally tax-exempt interest and dividend income you received.

Your distributive share of federally tax-exempt interest and dividend income received from a partnership, an S corporation, an estate, or a trust is added back on Schedule M, Line 2.

Line 3

Other additions to income. Complete Schedule M if you have any of the following items:

your child’s federally tax-exempt interest and dividend income
from U.S. Form 8814 a distributive share of additions received from a partnership, an S corporation, an estate, or a trust
withdrawals made and interest earned from your Medical Care Savings Account that are not included in your adjusted gross income, Line 1
Lloyds plan of operations loss, if that loss was reported on your behalf on Form IL-1023-C, and included in your federal adjusted gross income
earnings distributed to you from some non-Illinois IRC Section 529 college savings and tuition programs if these earnings are not included in your adjusted gross income, Line 1
an addition amount calculated on Form IL-4562, Special Depreciation
business expense recapture (nonresidents only) recapture of deductions for contributions to Illinois college savings plans transferred to an out-of-state plan
any other amounts that you are required to add to your federal adjusted gross income

See the Schedule M instructions for more details.

Attach: Schedule M and any required supporting documents.

STEP 3: Base Income

Line 5

Federally taxed Social Security beneﬁts and certain retirement plans. You may subtract most retirement income if it is included in Form IL-1040, Line 1. This includes income from

qualiﬁed employee beneﬁ t plans (including railroad retirement and 401(K) plans) reported on U.S. 1040, Line 16b, or
U.S. 1040A, U.S. Individual Income Tax Return, Line 12b.
Individual Retirement Accounts or self-employed retirement plans reported on U.S. 1040, Line 15b, or U.S. 1040A, Line 11b.
Social Security and railroad retirement beneﬁ ts reported on
U.S. 1040, Line 20b, or U.S. 1040A, Line 14b.
government retirement and government disability plans and group term life insurance premiums paid by a qualiﬁ ed
retirement plan reported as wages on your U.S. 1040 or 1040A, Line 7.
state or local government deferred compensation plans reported on U.S. 1040, Line 7 or 16b, or U.S. 1040A, Line 7 or 12b.
capital gains on employer securities reported on U.S. 1040, Line 13.
retirement payments to retired partners reported on U.S. 1040, Line 17.

See Publication 120 for more details.

U.S. Form 1040 or 1040A, page 1 and any W-2 and 1099 forms. If your retirement income is not reported on your 1040, Line 15b, 16b, 20b or U.S. 1040A, Lines 11b, 12b, and 14b or shown on your W-2 and 1099 forms, see Publication 120 for a list of any additional required attachments.

Line 6

Military pay earned. Write the amount of military pay that you received from the U.S. Armed Forces or the National Guard of any state.
You may not subtract the following:

combat pay that is not included in your adjusted gross income, Line 1
pay you received
- under the Voluntary Separation Incentive,
- from the military as a civilian,
- under the Ready Reserve Mobilization Income Insurance Program,
- for duty as an ofﬁcer in the Public Health Service

For more information, see Publication 102, Illinois Filing Requirements for Military Personnel.

Attach: Form W-2 showing your military pay.

Line 7

Illinois Income Tax refund. Write the total amount of any Illinois Income Tax overpayment (including any amount that was credited to another tax liability) reported as income on your 2007 U.S. 1040, Line 10. Do not include other states’ refunds on this line.

Note:If you ﬁled a U.S. 1040A or U.S. 1040EZ, Income Tax Return for Single and Joint Filers With No Dependents, you may not take this subtraction.

Line 8

U.S.Treasury bonds, bills, notes, savings bonds, and U.S. agency interest. Write the income included in your Form IL-1040, Line 1, you received from U.S. Treasury bonds, bills, notes, savings bonds,

U.S. agency income, and other similar obligations from your

U.S. 1040, Schedule B, Interest and Ordinary Dividends;
U.S. 1040A, Schedule 1, Interest and Ordinary Dividends for Form 1040A Filers; or
mutual fund statement, plus any income listed in Publication 101, Income Exempt from Tax, under
“What if I have income from obligations of the United States Government?”;
“What federally-taxable income is exempt from Illinois Income Tax by other federal statutes?”;
“What if I have distributions from money market trusts (mutual funds)?”

Mutual fund distributions. Include the entire amount of federally taxed distributions received from mutual funds investing exclusively in U.S. government obligations. If the mutual fund invests in U.S. government obligations and non-exempt obligations, your deduction is the distribution received from the mutual fund attributable to the U.S. government obligations, as determined by the mutual fund. If the mutual fund does not provide this percentage amount, multiply the total distribution by a fraction. The numerator is the amount invested by the fund in exempt U.S. government obligations, and the denominator is the fund’s total investment.

Note: Savings bond interest that is not included in your federal adjusted gross income is not an allowable subtraction.

Note: If you received a distributive share of a subtraction for U.S. government obligations from a partnership, an S corporation, a trust, or an estate, include that amount on Schedule M and on Line 9.

Attach: a copy of U.S. 1040, Schedule B or U.S. 1040A, Schedule 1, if required for your federal return; a copy of the statement from the mutual fund; and any worksheets that clearly identify your interest from U.S. obligations.

For more details, see Publication 101.

Line 9

Other subtractions to income. You may be entitled to subtract other items from your income. See the instructions for Schedule M to see if you are eligible for other subtractions.

Attach: Schedule M and any required supporting documents.

Line 11

Base income. This line may not be less than zero. If the result is a negative number, write “zero.”

STEP 4: Exemptions

Illinois exemption allowance

Line 12a

If you ﬁled

U.S. Form 1040 or 1040A, your number of exemptions is found in box 6d of your federal return.
U.S. Form 1040EZ, your number of exemptions is
- 0 - if you are single and you checked the “You” box on Line 5 of your federal return, or if you are married ﬁling jointly and you checked both the “You” and “Spouse” boxes on Line 5 of your federal return.
- 1 -if you are single and did not check the “You” box on Line 5 of your federal return, or if you are married ﬁling jointly and you checked only one box (either “You” or “Spouse”) on Line 5 of your federal return.
- 2 - if you are married ﬁling jointly and did not check either box on Line 5 of your federal return.

If you did not ﬁle a federal return, use the U.S. 1040 as a worksheet, and write the number of exemptions you would have claimed if you had ﬁled one.

Line 12b

If someone else claimed you as a dependent and your Illinois base income (Form IL-1040, Line 11, or Schedule NR, Line 50) is

$2,000 or less, your number of exemptions is 1.
greater than $2,000, your number of exemptions is 0.

Note: If your Illinois base income is $4,000 or less, you are married ﬁling jointly, and both of you can be claimed as dependents on someone else’s return, your number of exemptions is 2.

Line 12c

If you or your spouse were 65 or older, check the appropriate box(es).Your number of exemptions is equal to the number of boxes checked.

Line 12d

If you or your spouse were legally blind, check the appropriate box(es).Your number of exemptions is equal to the number of boxes checked.

STEP 5: Net Income

Line 13

Illinois residents only – Net income. This line may not be less than zero. If the result is a negative number, write “zero.”

Line 14

Nonresidents and part-year residents only – Residency and Illinois income. First, check the box to identify whether you were a nonresident or a part-year resident of Illinois during 2007.

Next, complete Schedule NR. Write the amount from Schedule NR, Line 50, on Line 14. This line may not be less than zero.

Attach: Schedule NR.

STEP 6: Tax

Line 15

Tax amoun. Illinois residents: Follow the instructions on the form.

Nonresidents and part-year residents only: Write your tax amount from Schedule NR, Line 56.

Attach: Schedule NR.

This line may not be less than zero.

Note: If you claimed an investment credit in a previous year, and the property considered in the computation of that investment credit was disqualiﬁed within 48 months after being placed in service, you must complete Schedule 4255, Recapture of Investment Tax Credits, and the Schedule 4255 Recapture Worksheet.

STEP 7: Payments and Credits

Line 17

Illinois Income Tax withheld. Write the total Illinois Income Tax withheld in 2007 as shown on your W-2, Wage and Tax Statement, forms. This amount is generally found on your W-2 forms in Box 17, state income tax. Also include any Illinois Income Tax withheld as shown on your Form 1099-R, Distributions From Pensions, Annuities, Retirement or Proﬁt-Sharing Plans, IRAs, Insurance Contracts, etc., Form 1099-G, Certain Government Payments, and Form W-2G, Certain Gambling Winnings.

Attach: a copy of each W-2, 1099-R, 1099-G, and W-2G form.

Note: If you have income from a partnership or S corporation and you were included on a Form IL-1023-C, you may not enter your share of taxes paid on your behalf on Line 17 unless we have given written permission for you to do so.

In order to receive credit for these payments, you must attach a copy of the Form IL-1023-C, a copy of your Schedule K-1-P, Partner’s or Shareholder’s Share of Income, Deductions, Credits, and Recapture, and a copy of the ruling you received from us allowing you to claim this credit.

Line 18

Estimated income tax payments. Write the total of any payments you made with

Form IL-1040-ES, Estimated Income Tax Payments for Individuals;
Form IL-505-I; and
any 2006 overpayment that was credited to your 2007 estimated tax.

Note: If you expect your yearly tax liability to be greater than $500 after subtracting your withholding and credits, you may be required to make estimated income tax payments. See Line 27 and the instructions for Form IL-2210, Computation of Penalties for Individuals, for more information.

Line 19

Credit for tax paid to other states – Illinois residents and part-year residents only. If you were taxed by another state on income you received while you were an Illinois resident, you may be entitled to this credit. See the Schedule CR instructions and Publication 111, Illinois Schedule CR Comparison Formulas for Individuals, to see if you are eligible to take this credit.

Attach: Schedule CR and any required supporting documents.

Line 20

Illinois Property Tax Credit – Illinois residents and part-year residents only. You may ﬁgure a credit for the Illinois property taxes you paid in 2007 on your principal residence (not a vacation home or rental property) for the time you owned and lived at the property during 2006, if that residence was in Illinois.

You may not ﬁgure a credit for mobile home privilege tax, penalties, or fees included in your property tax bill, or the portion of the property that is deductible as a business expense.

For more information, see Publication 108, Illinois Property Tax Credit.

TIP: Illinois property you purchased. You may ﬁgure a credit for Illinois property you purchased during 2006 providing you ﬁgure only that portion of your taxes that pertains to the time you owned and lived at the property during 2006.You may not take a credit for taxes you paid if the seller reimbursed you at the time of closing.You also may not take a credit on your 2007 return for property you purchased in 2007.

TIP: Illinois property you sold. You may ﬁgure a credit for Illinois property you sold in 2007 by combining the 2006 property tax paid in 2007, as well as a portion of the 2007 tax paid based on the time you owned and lived at the property during 2007.You may not take a credit on your 2007 return for property sold during 2006.

Note: If you are eligible for a property tax credit, you must complete the “Homeowner’s Property Tax (PT) Worksheet” to ﬁgure the amount of your credit.

Homeowner’s Property Tax (PT) Worksheet

You must complete this worksheet if you are eligible for the Illinois Property Tax credit. Nonresidents may not claim this credit.

Homeowner’s Property Tax (PT) Worksheet
You must complete this worksheet if you are eligible for the Illinois Property Tax credit. Nonresidents may not claim this credit.
1 Illinois property tax paid in 2007 for the real estate that includes your principal residence	__________
2 Portion of your tax bill that is deductible as a business expense on U.S. Schedule C, E, or F or other U.S. income tax forms or schedules, whether or not you actually took the federal deduction 2	__________
3. Subtract Line 2 from Line 1. Write this amount on Line 20a of your Form IL-1040.	__________
4 Multiply Line 3 by 5% (.05).	__________
5 Income tax from Form IL-1040, Line 16	__________
6 Credit for tax paid to other states from Form IL-1040, Line 19	__________
7 Subtract Line 6 from Line 5.	__________
8 Compare the amounts on Line 4 and Line 7. Write the lesser amount here and on Form IL-1040, Line 20b. This is your Illinois Property Tax Credit.	__________
NOTE: Be sure to keep this worksheet, proof of your property tax paid, and copies of any closing statements with your income tax records. You must submit this information to us if we request it.

Line 21

Credit for K-12 education expenses - Illinois residents and part-year residents only. You may ﬁgure a credit for qualiﬁed education expenses, in excess of $250, you paid during 2007 if

you were the parent or legal guardian of a full-time student who was under the age of 21 at the close of the school year,
you and your student were Illinois residents when you paid the expenses, and
your student attended kindergarten (at a school that also has a ﬁrst grade) through twelfth grade at a public or nonpublic school in Illinois during 2007.

If you

received a receipt from the school, you must complete the “K-12 Education Expense (ED) Worksheet” below to ﬁgure the amount of your credit.

Attach: The “Receipt for Qualiﬁed K-12 Education Expenses” that you received from the school (not the ED Worksheet).

did not obtain a receipt from the school, you must complete Schedule ED, Credit for K-12 Education Expenses.

Attach: Schedule ED (not the ED Worksheet).

home school your child(ren), see Publication 119, K-12 Education Expense Credit General Rules and Requirements for Home Schools.

Attach: Schedule ED and receipts.

Note: If you are the parents or legal guardians of a qualiﬁed student and you are ﬁling separate Illinois returns, you may each claim an education expense credit. However, you both may not claim a credit for the same expenses, and the total amount of credit claimed between both parents or guardians may not exceed $500.For more details, see Publication 132.

TIP: Qualiﬁed education expenses. Education expenses that qualify for this credit include

tuition (including summer school classes meeting elementary or secondary graduation requirements).
book fees covering the rental of books that were required as a part of the school’s education program.
lab fees covering the use of supplies, equipment, materials, or instruments that were required as part of a lab course in the school’s education program.

For example, if you rented a musical instrument from the school (not from a business)

for a class, or

for participation in an extracurricular activity that resulted in a credit toward completion of the school’s education program,

this rental expense qualiﬁes as an education expense.

Education expenses that do not qualify for this credit include

expenses paid to a daycare, preschool, kindergarten at a school that does not also have a ﬁrst grade, college, university, independent tutoring service, or trade school.
expenses paid for the purchase of supplies, books, or equipment that are not signiﬁcantly used up during the school year (e.g., purchasing musical instruments, costumes for a play).
expenses paid for the use of supplies, equipment, materials, or instruments if the program does not result in a credit towards completion of the school’s education program.
expenses paid directly to a business (e.g., renting a musical instrument from a music store).
expenses for after school care, even if paid to the school.
expenses paid for yourself or your spouse.

K-12 Education Expense Credit (ED) Worksheet
Complete this worksheet only if you received a receipt from the school. Otherwise, complete Schedule ED.
1 Total amount of qualifi ed expenses you paid during 2007 from your receipt. If less than $250, stop here. If greater than $250, write the amount here and on Line 21a of your Form IL-1040.	__________
2 You may not take a credit for the fi rst $250 paid for your family’s education expenses.	$250.00
3 Subtract Line 2 from Line 1.	__________
4 Multiply the amount on Line 3 by 25% (.25).	__________
5 Income tax from Form IL-1040, Line 16	__________
6 Credit for tax paid to other states from Form IL-1040, Line 19	__________
7 Property tax credit from Form IL-1040, Line 20b	__________
8 Add Lines 6 and 7.	__________
9 Subtract Line 8 from Line 5.	__________
10 Compare the amount on Line 4, the amount on Line 9, and $500. Write the lowest amount here and on your Form IL-1040, Line 21b. This is your education expense credit.	__________
NOTE: Be sure to keep this worksheet with your income tax records. However, you must attach the receipts you received from the school to your Form IL-1040.

Line 22

Earned Income Credit. If you qualiﬁed for a federal Earned Income Credit (EIC), you also qualify for the Illinois Earned Income Credit.

Complete the “Earned Income Credit (EIC) Worksheet” to determine the amount of your credit.

Note: You must keep a copy of your federal income tax return, federal Schedule EIC, federal EIC worksheet, or any other documentation that veriﬁes the amount of your federal EIC and submit it to us if we request it

Earned Income Credit (EIC) Worksheet
1 Federal EIC from your U.S. 1040, Line 66a; U.S. 1040A, Line 40a; or U.S. 1040EZ, Line 8a. Write the amount here and on Line 22a of your Form IL-1040.	__________
2 Multiply the amount on Line 1 by 5% (.05).	__________
3 Illinois residents: Write 1.0. Nonresidents and part-year residents: Write the decimal from your completed Schedule NR, Line 52.	__________
4 Multiply Line 2 by the decimal on Line 3. This is your Illinois Earned Income Credit. Write the result here and on Line 22b of your Form IL-1040.	__________
NOTE: Keep this worksheet with your income tax records.

Line 23

Credit from Schedule 1299-C. See the instructions for Schedule 1299-C to determine if you are eligible for these credits.
The last page of this booklet tells where to get forms and instructions.

Attach: Schedule 1299-C.

Line 24

Total payments and credits. Add Lines 17, 18, 19, 20b, 21b, 22b, and 23, and write the total on Line 24.

STEP 9: Penalty

Line 27

Late-payment penalty for underpayment of estimated tax. If you

have a tax liability greater than $500 after subtracting your withholding and credits, or
were required to make estimated tax payments and failed to pay the required amount by the payment due dates, you may owe a late-payment penalty for underpayment of estimated tax. See Form IL-2210 for details.

Note: If you owe this penalty, you should consider increasing your withholding or the amount of your estimated tax payments. See the instructions for Form IL-1040-ES and Form IL-W-4, Employee’s Illinois Withholding Allowance Certiﬁcate.

TIP: Let us ﬁgure your penalty and bill you. Figuring your own penalty can be difﬁcult. We encourage you to ﬁle your Form IL-1040 and pay the tax you owe without including any penalty. If you owe this penalty, we will ﬁgure the amount and bill you.

Note: If you annualized your income, you must complete Form IL-2210.

Line 27a

Annualized income or nursing home residents. Check the box on Form IL-1040, Step 9, Line 27a, if you

annualized your income on Form IL-2210, or
are 65 years of age or older and you permanently live in a nursing home.

Attach: Form IL-2210 if you annualized your income.

Line 27b

Farmers. Check the box on Form IL-1040, Step 9, Line 27b, if at least two-thirds of your total federal gross income came from farming. Total federal gross income includes your spouse’s income if your ﬁling status is “married ﬁling jointly.”

TIP: Federal gross income from farming. “Federal gross income from farming” is the amount of income you received from your participation in the production of crops, fruits, ﬁsh, livestock (used for draft, breeding, or dairy purposes), or other agricultural products. This includes income from the operation of a stock, dairy, poultry, fruit, or truck farm, plantation, ranch, nursery, range, or orchard – regardless of whether the operation is organized as a sole proprietorship, a partnership, an S corporation, or a trust. “Federal gross income from farming” also includes a share of crops produced in exchange for the use of the land.

“Federal gross income from farming” does not include payments from the sale of farm land and farm equipment, nor does it include income received by a custom grain harvester who performs grain harvesting and hauling services on farms he or she does not own, rent, or lease. It also does not include the wages of a farm employee or cash rent.

Note: If you are 65 years of age or older and you permanently live in a nursing home or if at least two-thirds of your federal gross income is from farming, you are not required to make estimated tax payments and are not subject to a late-payment penalty for underpayment of estimated tax.

STEP 10: Donations

Line 28

Donations. You may contribute to one or more of the following state funds. Contributions to the funds may be in any amount ($1 or more) and will decrease your refund or increase your balance due. Write the amount you wish to contribute on Lines 28a through 28k.

You cannot change your contributions to these funds on an amended return.

Wildlife Preservation Fund - Survival of Illinois’ native plants and animals is an ever-growing challenge as important habitats are lost or degraded.Your contribution will pay for projects to help restore and manage habitats, monitor rare species, conduct research to help plan the recovery of endangered species, and educate Illinoisans about the values of our native species.
Child Abuse Prevention Fund - Last year the DCFS hotline received over 250,000 calls to report suspected child abuse. Your contribution will support programs in your community designed to help strengthen families to prevent abuse of their children.
Alzheimer’s Disease Research Fund -An estimated 210,000 Illinois residents suffer from Alzheimer’s disease. Grants from this fund will help support important research to ﬁnd a cure and treatment for this progressive and fatal brain disorder that is the ﬁfth leading cause of death in Illinois for people 65 and older.
Assistance to the Homeless Fund -Your contribution supports local agencies that provide shelter, meals, and services needed by homeless families and individuals. The assistance given by the local not-for-proﬁt organizations enables homeless people to regain residence in the community and maintain their independence.
Penny Severns Breast, Cervical, and Ovarian Cancer Research Fund - Breast, cervical, and ovarian cancers account for more than one-third of all cancers diagnosed in Illinois. Your contribution will help support research to ﬁnd ways to prevent these cancers, as well as improve early detection and
treatment.
Multiple Sclerosis Assistance Fund - Multiple Sclerosis (MS) is a chronic, often disabling disease of the central nervous system that generally strikes people between the ages of 20 and 50. Your donation to the Multiple Sclerosis Assistance Fund will help fund research and treatment and provide hope for thousands of individuals with MS and their families.
Military Family Relief Fund -Thousands of members of the Illinois National Guard and reserves have been called to active duty since the September 11, 2001, terrorist attacks. Your contribution will help guard members, reservists, and members of their families defray expenses that become difﬁcult to afford when a wage-earner temporarily leaves civilian employment for active military duty or is injured while performing such duty.
Illinois Veterans’ Home Fund - More than 1,000 veterans and their spouses call one of the four Illinois Veterans’ Homes “home.” Contributions to this fund will be used to purchase supplies and equipment that will be used to enhance the lives of the residents and to enhance the operations of the homes.
Diabetes Research Fund - Diabetes is a disease that affects millions of people and their families. An estimated 778,000 Illinois residents have diagnosed diabetes. The American Diabetes Association and the Juvenile Diabetes Research Foundation will use your contribution to support scientiﬁc research on the causes and treatment of diabetes.
Autoimmune Disease Research Fund -There are more than 80 autoimmune diseases, including rheumatoid arthritis, lupus, Graves’ disease, and scleroderma, which force your body’s immune system to attack itself by mistake. Your donations will provide grants to public and private organizations to research the treatment and cure of these diseases, which impact 5 to 8 percent of the population.
Lung Cancer Research Fund -Lung cancer is the third most prevalent form of cancer in Illinois. Contributions to this fund will support research grants to public and private not-for-proﬁt entities to study methods of preventing lung cancer and ﬁnding better ways to treat it.

STEP 11: Refund or Amount You Owe

Line 31

Overpayment applied to next year. We will reduce any credit to your 2008 estimated tax by the amount of any outstanding tax, penalties, and interest you owe. If your credit is reduced, you may owe a late-payment penalty for underpayment of estimated tax for the following year. See Form IL-1040-ES for details.

Line 32

Refund. We will not refund any amount less than $1. We will also reduce any refund by the amount of any outstanding tax, penalties, and interest you owe and by amounts you owe to other agencies or governments, if those debts have been certiﬁed to us.

Line 33

Direct deposit your refund. If you use direct deposit, you will get your refund faster.

TIP: Direct deposit. If you choose to deposit your refund directly into your checking or savings account, you must

enter your routing number on Line 33.
- For a checking account, your routing number must be nine digits and the ﬁrst two digits must be 01 through 12 or 21 through 32. The sample check on the next page has an example of a routing number.
- For a savings account, you must contact your ﬁnancial institution for your routing number.
check the appropriate box on Line 33 to indicate that you want your refund deposited into your checking or savings account.
enter your account number on Line 33.
- For a checking account, your account number may be up to 17 digits. The sample check on the next page has an example of an account number.
- For a savings account, you must contact your ﬁnancial institution for your account number.

Do not take your account and routing numbers from your checking or savings account deposit slip or include your check number. Include hyphens, but omit spaces and special symbols.You may have unused boxes.

Note: Some ﬁnancial institutions may not allow a refund to be deposited into an account if the names on the account are not the same names that appear on the refund. If your ﬁnancial institution does not honor your request for direct deposit, we will send you a check instead.

Line 34

Amount you owe. If Line 34 is less than $1, you do not have to pay, but you still must ﬁle your tax return.

Your tax payment is due on or before April 15, 2008.

Payment options - You may pay by

bank account debit. To have your payment electronically taken from your checking or savings account
- visit our web site at tax.illinois.gov, or
- ask your tax professional.

You need the same information that is required for direct deposit (see the instructions for Line 33) plus your IL-PIN (Illinois Personal Identiﬁcation Number).

Warning: Many credit unions will not allow an electronic debit from a savings account. Please check with your ﬁnancial institution.

credit card. To pay with Visa, MasterCard, Discover, or American Express
- visit – www.ofﬁ cialpayments.com, or
- call – 1 800 2PAYTAX (1 800 272-9829).

Have your credit card ready. Telephone payments require you to enter a Jurisdiction Code. The Jurisdiction Code is 2300.

An additional convenience fee will be assessed to your credit card account by the credit card service provider.

check or money order. Make the check or money order payable to “Illinois Department of Revenue” (not IRS). Write the taxpayer’s Social Security number, the spouse’s Social Security number if ﬁling jointly, and the tax year in the lower left corner of the payment.

Payments must be U.S. negotiable currency, expressed in U.S. dollars, and drawn on a U.S. bank.

Attach: Staple your check or money order to the front of your paper Form IL-1040.

Late ﬁling or late payment. If you do not ﬁle or pay your tax on time, you may owe penalties and interest. We will send you a bill.

If you prefer to ﬁgure the penalties yourself, you may complete Form IL-2210.

STEP 12: Sign and Date

You, and your spouse if ﬁling jointly, must sign and date your return. If you are ﬁling for a minor as a parent or guardian, you must sign and date the return.

If you do not sign your return

it will not be considered ﬁled and you may be subject to a nonﬁler penalty.
and three years have passed since the extended due date of that return, any overpayment will be forfeited.

Attach: Staple all required copies of forms and schedules, powers of attorney, and letters of estate or ofﬁce to the tax return.

Mailing your income tax return

If no payment is enclosed, mail your return to:

ILLINOIS DEPARTMENT OF REVENUE
SPRINGFIELD IL 62719-0001

If a payment is enclosed, mail your return to:

ILLINOIS DEPARTMENT OF REVENUE
SPRINGFIELD IL 62726-0001

Illinois Tax Help Links