February 2nd, 2026
The University of Illinois Tax School held its Illinois Tax Issues & Updates webinar on January 22, 2026. During the session, participants submitted a wide range of Illinois-specific tax questions.
To make those answers easier to reference during filing season, the instructor has compiled responses to the most common and timely questions below. Topics include Illinois Department of Revenue procedures, available credits, pass-through entity capital gain apportionment, and recent apportionment law changes.
As always, the information below is intended as general guidance for tax professionals preparing Illinois returns and should not be considered a substitute for professional judgment or firm-specific policies.
IDOR does not require direct deposit of a taxpayer’s refund. Direct debit of amounts owed to IDOR are also not required.
The Form AG990-IL can be electronically filed through the IL Attorney General website. Visit https://illinoisattorneygeneral.gov, scroll down and click Charitable Trust Filings & Resources. Follow the steps to start an online filing. Part of the process will include registering an online account with the IL Attorney General.
The IL Gives Tax Credit is available to individuals and businesses, including corporations and partnerships.
Yes. Taxpayers can get a federal deduction for these gifts as an itemized deduction and also get a state credit. This is because the federal itemized deductions are after federal adjusted gross income.
The IL Credit for Wages Paid to Returning Citizens is allowed to the employer as a way to incentivize employers hiring returned citizens.
Yes, Illinois continues to allow the replacement tax investment credit (on Form IL-477) for qualified property placed in service in 2025. If the credit exceeds tax liability, the credit may be carried forward for up to five years.
For tax years ending on or after June 16, 2025, new Illinois tax law changes how capital gains or losses from the sale of an interest in an S corporation or partnership that is taxable in Illinois are apportioned. The law apportions these gains or losses based on the pass-through entity’s average Illinois apportionment factor for the year of the sale and the two immediately preceding tax years. Installment payments received on or after the effective date may be subject to these new apportionment rules.
The PTE capital gain apportionment change applies to the sale of an interest in an S corporation or partnership that is taxable in Illinois. The law change does not apply to investment partnerships.
Illinois officially adopted the Finnigan method for unitary business groups for tax years ending on or after December 31, 2025. The new law applies to groups of related corporations operating as a single, integrated business (unitary business group) across multiple states, and companies that operate in multiple states. As defined by IDOR, a unitary business group is “a group of persons related through common ownership whose business activities are integrated with, dependent upon, and contribute to each other. In the case of a corporation, common ownership is defined as the direct or indirect ownership or control of more than 50 percent of the outstanding voting stock.”
By Rheanon Rabideau, CPA
Disclaimer: The information referenced in Tax School’s blog is accurate at the date of publication. You may contact taxschool@illinois.edu if you have more up-to-date, supported information and we will create an addendum.
University of Illinois Tax School is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information in this site is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information. This blog and the information contained herein does not constitute tax client advice.
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