IL-1120-X Instructions

              IL-1120-X Instructions (R-8/06) Page 1 of 4
Illinois Department of Revenue
IL-1120-X Instructions Use for tax years ending on or after December 31, 2005
What is new?
• For tax years ending on or after December 31, 2005, the
Form IL-1120, Illinois Corporation Income and Replacement Tax
Return has been redesigned. Form IL-1120-X, with revision date
8/06, reflects the changes made to the 2005 IL-1120. Use this
version of Form IL-1120-X for tax years ending on or after
December 31, 2005.
Who must file Form IL-1120-X?
You should file Form IL-1120-X if you are amending a previously
filed, processable Form IL-1120, Illinois Corporation Income and
Replacement Tax Return, or Form IL-1120-X, for a tax year ending
on or after December 31, 1986. Your change can occur from a state
or federal change, such as
• an amendment of your federal income tax return,
• an adjustment made by the Internal Revenue Service (IRS), or
• any other recomputation or redetermination,
and your change affects items used to compute your Illinois net
income, net loss, or credits. A separate Form IL-1120-X must be filed
for each tax year you need to amend.
Use Form IL-1120X-PY, Amended Corporation Income and
Replacement Tax Return, to amend tax years ending prior to
December 31, 1986.
What if I need to correct my return before the
extended due date expires?
If you filed your original Form IL-1120 and a state or federal correction
or change needs to be made before the extended due date expires
(see the instructions of your original return), you should file Form
IL-1120-X, and write “CORRECTED” at the top. Due to the automatic
extension, any corrected return filed after the original return and prior
to the extended due date will be treated as the original return, rather
than an amended return.
If you are filing a “corrected return” to change the election on your
original return to treat all income other than compensation as
business income, mark the box in Step 1, Line J and provide a
written explanation indicating the change to your election in Step 2 of
Form IL-1120-X.
How long do I have to amend my return?
The amount of time you have to amend your return depends on
whether your Form IL-1120-X is being filed to report a state or
federal change.
State change - If your change creates or increases the Illinois net
loss for the year, you must file Form IL-1120-X showing the increase
in order to carry the increased loss amount to another year.
If your change decreases the tax due to Illinois and you are entitled
to a refund, you must file Form IL-1120-X within
• three years after the due date of the return (including extensions),
• three years after the date your original return was filed, or
• one year after the date your Illinois tax was paid, whichever is
latest.
If your change increases the tax due to Illinois, you should file Form
IL-1120-X and pay the tax, penalty, and interest promptly.
Federal change - You should not file this form until you receive a
federal finalization notification from the IRS, stating that they have
accepted your change, either by paying a refund, or by final
assessment, agreement, or judgment.
If your federal change decreases the tax due to Illinois and you are
entitled to a refund, you must file Form IL-1120-X within two years
plus 120 days of federal finalization.
If your federal change increases the tax due to Illinois, you must file
Form IL-1120-X and pay any additional tax within 120 days of IRS
partial agreement or finalization. In order to avoid late payment
penalties, you must attach proof of the federal finalization date,
showing the change was reported to Illinois within 120 days of IRS
acceptance, or you may be assessed a late-payment penalty.
If you fail to notify us of your change by filing Form IL-1120-X,
we may issue a notice of deficiency at any time. Once you file your
change, we may issue a notice of deficiency within two years.
What if my amended return involves unitary
filing?
If you are amending your original
• unitary Form IL-1120 to report a state or federal change to your
unitary income, you must file one combined Form IL-1120-X for all
members and a revised Schedule UB, Combined Apportionment
for Unitary Business Groups.
• non-unitary Form IL-1120 to be included in an existing unitary
group, you must file Form IL-1120-X, reporting a zero tax liability,
and the unitary group must file one combined Form IL-1120-X and
attach a revised Schedule UB that includes you as a member.
What if my amended return involves an Illinois
net loss deduction (NLD)?
If you have an Illinois NLD carryforward from any loss year ending on
or after December 31, 1986, it is subtracted from and limited to base
income allocable to Illinois.
To determine your “Illinois net loss” start with federal taxable income
and apply all addition and subtraction modifications, and all allocation
and apportionment provisions.
If you are carrying an Illinois NLD, you must complete and attach
Illinois Schedule NLD, Illinois Net Loss Deduction, and claim the
deduction on Step 6, Line 38. See specific instructions for Step 6,
Line 38.
If you are a member of a unitary business group and you are carrying
an Illinois NLD, you must complete and attach Illinois Schedule
UB/NLD, Unitary Net Loss Deduction to support the amount of Illinois
NLD claimed. Additionally, you must attach a copy of each loss year’s
Schedule UB, Step 6. If Step 6 does not report each member’s
average apportionment factor, you must also attach a separate
worksheet providing this information. Refer to current Schedule UB
for an example of the required formatting.
Do not file Form IL-1120-X to report an Illinois NLD carryforward until
after you have filed the loss year Form IL-1120 or Form IL-1120-X
reporting the loss. When you file Form IL-1120-X, you must attach a
completed Illinois Schedule NLD or UB/NLD. Failure to attach the
correct and completed schedule could result in partial or total
denial of your claim.
If you need further information,
• visit our web site at www.tax.illinois.gov and view the Illinois
Income Tax Regulations, Sections 100.2050 and 100.2300
through 100.2330, or
• write to Illinois Department of Revenue, Legal Services Office,
Senior Counsel - Income Tax, 5-500, 101 West Jefferson Street,
Springfield, Illinois 62702, and request these sections of the
Illinois Income Tax Regulations.