Discussion:Domestic Production Activities Deduction and Illinois

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Discussion Forum Index --> Tax Questions --> Domestic Production Activities Deduction and Illinois

Kh1812 (talk|edits) said:

27 February 2006
I know that Illinois did not de-couple from the domestic production activities deduction. On the Illinois C corp returns, the deduction flows through without an add back for computation of both income tax and replacement tax.

However, on the IL-1120-ST the deduction does not flow through. It seems to me that IL should have had a line item in Part IA similar to the adjustment for Sec.179. There is no reference in the IL instructions for this item and it appears that IL has just ignored it or did not have enough time to address the issue. Also, Lacerte does not address this issue in the program.

I am thinking that I should enter the deduction as an "Other deduction" in Part IA. It is not a big item for most of my clients since we are only talking about the replacement tax but I want to handle this correctly. Any thoughts?

Kh1812 (talk|edits) said:

1 March 2006
I find it hard to believe I am the only practitioner who has this question. Based on the lack of response, I have to assume that all the users reading the items in the forum are from the rest of the US or if there are any IL people, they are only preparing 1040s.

March 15th is approaching quickly...

Kh1812 (talk|edits) said:

3 March 2006
The state of IL came out the other day and stated that taxpayers filing IL-1120-ST and IL-1065 are not allowed to deduct the domestic production activities deduction when calculating IL income subject to the Personal property replacement tax.

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