Bill Text: IL HB1396 | 2025-2026 | 104th General Assembly | Introduced

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Bill Title: Amends the Illinois Income Tax Act. Provides that provisions concerning a credit for foreign taxes shall be applied without regard to provisions concerning distributions of investment partnership income to nonresident partners. Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2025-01-15 - Filed with the Clerk by Rep. Curtis J. Tarver, II [HB1396 Detail]

Download: Illinois-2025-HB1396-Introduced.html

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104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB1396 Introduced , by Rep. Curtis J. Tarver, II SYNOPSIS AS INTRODUCED:
35 ILCS 5/601 from Ch. 120, par. 6-601
Amends the Illinois Income Tax Act. Provides that provisions concerning a credit for foreign taxes shall be applied without regard to provisions concerning distributions of investment partnership income to nonresident partners. Effective immediately.
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A BILL FOR
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AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Income Tax Act is amended by
changing Section 601 as follows:
(35 ILCS 5/601) (from Ch. 120, par. 6-601)
Sec. 601. Payment on due date of return.
(a) In general. Every taxpayer required to file a return
under this Act shall, without assessment, notice or demand,
pay any tax due thereon to the Department, at the place fixed
for filing, on or before the date fixed for filing such return
(determined without regard to any extension of time for filing
the return) pursuant to regulations prescribed by the
Department. If, however, the due date for payment of a
taxpayer's federal income tax liability for a tax year (as
provided in the Internal Revenue Code or by Treasury
regulation, or as extended by the Internal Revenue Service) is
later than the date fixed for filing the taxpayer's Illinois
income tax return for that tax year, the Department may, by
rule, prescribe a due date for payment that is not later than
the due date for payment of the taxpayer's federal income tax
liability. For purposes of the Illinois Administrative
Procedure Act, the adoption of rules to prescribe a later due

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date for payment shall be deemed an emergency and necessary
for the public interest, safety, and welfare.
(b) Amount payable. In making payment as provided in this
section there shall remain payable only the balance of such
tax remaining due after giving effect to the following:
(1) Withheld tax. Any amount withheld during any
calendar year pursuant to Article 7 from compensation paid
to a taxpayer shall be deemed to have been paid on account
of any tax imposed by subsections 201(a) and (b) of this
Act on such taxpayer for his taxable year beginning in
such calendar year. If more than one taxable year begins
in a calendar year, such amount shall be deemed to have
been paid on account of such tax for the last taxable year
so beginning.
(2) Estimated and tentative tax payments. Any amount
of estimated tax paid by a taxpayer pursuant to Article 8
for a taxable year shall be deemed to have been paid on
account of the tax imposed by this Act for such taxable
year.
(3) Foreign tax. The aggregate amount of tax which is
imposed upon or measured by income and which is paid by a
resident for a taxable year to another state or states on
income which is also subject to the tax imposed by
subsections 201(a) and (b) of this Act shall be credited
against the tax imposed by subsections 201(a) and (b)
otherwise due under this Act for such taxable year. For

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taxable years ending prior to December 31, 2009, the
aggregate credit provided under this paragraph shall not
exceed that amount which bears the same ratio to the tax
imposed by subsections 201(a) and (b) otherwise due under
this Act as the amount of the taxpayer's base income
subject to tax both by such other state or states and by
this State bears to his total base income subject to tax by
this State for the taxable year. For taxable years ending
on or after December 31, 2009, the credit provided under
this paragraph for tax paid to other states shall not
exceed that amount which bears the same ratio to the tax
imposed by subsections 201(a) and (b) otherwise due under
this Act as the amount of the taxpayer's base income that
would be allocated or apportioned to other states if all
other states had adopted the provisions in Article 3 of
this Act bears to the taxpayer's total base income subject
to tax by this State for the taxable year. This subsection
is exempt from the 30-day threshold set forth in
subparagraph (iii) of paragraph (B) of item (2) of
subsection (a) of Section 304. Beginning with tax years
ending on or after December 31, 2025, this subsection
shall be applied without regard to subsection (c-5) of
Section 305. The credit provided by this paragraph shall
not be allowed if any creditable tax was deducted in
determining base income for the taxable year. Any person
claiming such credit shall attach a statement in support

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thereof and shall notify the Director of any refund or
reductions in the amount of tax claimed as a credit
hereunder all in such manner and at such time as the
Department shall by regulations prescribe.
(4) Accumulation and capital gain distributions. If
the net income of a taxpayer includes amounts included in
his base income by reason of Section 667 of the Internal
Revenue Code (relating to accumulation and capital gain
distributions by a trust, respectively), the tax imposed
on such taxpayer by this Act shall be credited with his pro
rata portion of the taxes imposed by this Act on such trust
for preceding taxable years which would not have been
payable for such preceding years if the trust had in fact
made distributions to its beneficiaries at the times and
in the amounts specified in Sections 666 and 669 of the
Internal Revenue Code. The credit provided by this
paragraph shall not reduce the tax otherwise due from the
taxpayer to an amount less than that which would be due if
the amounts included by reason of Section 667 of the
Internal Revenue Code were excluded from his or her base
income.
(c) Cross reference. For application against tax due of
overpayments of tax for a prior year, see Section 909.
(Source: P.A. 101-585, eff. 8-26-19.)