IL-1120-X: Use for tax years ending before December 31, 2005

              IL-1120-X Instructions (R-12/05) Page 1 of 4
Illinois Department of Revenue
IL-1120-X InstructionsUse for tax years ending before December 31, 2005
What is new?
• Effective immediately, “business income” is defined to mean all
income that may be apportioned without violating the Constitution
of the United States. This new definition overrules recent court
cases that had ruled that gain from disposition of an entire business
or from property that previously had been used in a business is not
business income.
• The IL-477, Replacement Tax Investment Credit, scheduled to
expire on December 31, 2003, has been extended until December
31, 2008.
• For tax years ending on or after December 31, 2005, the Form
IL-1120, Illinois Corporation Income and Replacement Tax Return
has been completely revised. Use this version of Form IL-1120-X
to amend tax returns for tax years ending before December 31,
2005. If you need to file a corrected or amended return for tax
years ending on or after December 31, 2005, you may obtain a
copy of the revised Form IL-1120-X by visiting our web site at
www.tax.illinois.gov.
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 Replace-ment
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 additional return filed after the original return and prior
to the extended due date will be considered a “corrected 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, clearly indicate the change to your election in Part V of Form
IL-1120-X.
If you are filing a “corrected return” to change the election on your
original return to forgo the Illinois NLD carryback period, clearly
indicate the change to your election in Part V of Form IL-1120-X.
For tax years ending on or after December 31, 2003, the carryback
provision is repealed. You must carryforward any losses earned on or
after December 31, 2003.
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 within three years after the
due date of the return, including extensions, 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 you are reporting an Illinois net loss deduction (NLD)
carryback, Form IL-1120-X must be filed within three years of the
extended due date for the loss year return.
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 assess-ment,
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. 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?
For tax years ending on or after December 31, 1993, you
must file combined unitary.
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.
• non-unitary Form IL-1120, you must file one Form IL-1120-X and
a completed Schedule UB that includes all members of the unitary
group.
For tax years ending prior to December 31, 1993 -
Separate unitary
If you are amending your original unitary or non-unitary Form IL-1120 to
report a state or federal change to your unitary income, you must file a
separate Form IL-1120-X for each Illinois member of the unitary group.
Attach a completed Schedule UB or indicate, in the space provided on
Page 1 of this form, the FEIN of the member who is including the
Schedule UB with Form IL-1120-X. You cannot file a combined unitary
Form IL-1120-X.
Combined unitary
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.
• non-unitary Form IL-1120 to be included in an existing unitary group,
you must file Form IL-1120-X as if you were filing a separate unitary
return 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 carryback or carryforward from any loss year
ending on or after December 31, 1986, it is subtracted from and limited
to base income allocable to Illinois.