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Category: Illinois

Illinois Subtractions (Schedule M)

Military Pay Earned

Enter the amount of military pay that you received from the U.S Armed Forces or the National Guard of any state. You may not subtract the following:

  • combat pay that is not included in your federal adjusted gross income, Line 1
  • pay you received: under the Voluntary Separation Incentive, from the military as a civilian, or under the Ready Reserve Mobilization Income Insurance Program, as well as income for duty as an officer in the Public Health Service

For additional information, please refer to Illinois Publication 102.

U.S. Treasury Bonds, Bills, Notes, Savings Bonds, and U.S. Agency Interest

Enter the income included in your Form IL-1040, Line 1, you received from U.S. Treasury bonds, bills, notes, savings bonds, U.S. agency income, and other similar obligations from your

  • U.S. 1040, or 1040A or
  • mutual fund statement, plus:

any income listed in Illinois Publication 101, Income Exempt from Tax, under

  • “What if I have income from obligations of the United States Government?”;
  • “What federally-taxable income is exempt from Illinois Income Tax by other federal statutes?”;
  • “What if I have distributions from money market trusts (mutual funds)?”

TIP: Mutual fund distributions - Include the entire amount of federally taxed distributions received from mutual funds investing exclusively in U.S. government obligations. If the mutual fund invests in U.S. government obligations and non-exempt obligations, your deduction is the distribution received from the mutual fund attributable to the U.S. government obligations, as determined by the mutual fund. If the mutual fund does not provide this percentage amount, multiply the total distribution by a fraction. The numerator is the amount invested by the fund in exempt U.S. government obligations, and the denominator is the fund’s total investment.
NOTE: This subtraction is the amount net of any related bond premium amortization.

NOTE: Savings bond interest that is not included in your federal adjusted gross income is NOT an allowable subtraction.

NOTE: If you received a distributive share of a subtraction for U.S. government obligations from a partnership, an S corporation, a trust, or an estate, include that amount on Line 13.

Contributions you made to “Bright Start” and “Bright Directions” College Savings Pools and “College Illinois” Prepaid Tuition Program

Enter the amount of contributions you made during the tax year to the “Bright Start” and “Bright Directions” College Savings Pools and the “College Illinois” Prepaid Tuition Program. You may not subtract contributions made to any other college savings program. If your contributions were made by rolling over funds from another college savings program into a “Bright Start,” “Bright Directions,” or “College Illinois” account, you may not subtract any income that was earned in the other savings program and rolled over into your Illinois account.

Note: The total contribution deduction may not exceed $10,000 ($20,000 if married filing ling a joint return).

Contributions to a Job Training Project

Enter the amount equal to the contributions you made under the Tax Increment Allocation Redevelopment Act to a job training project. For more information, refer to Informational Bulletin FY 90-40.

Recovery of Items Previously Deducted on U.S. 1040, Schedule A

Enter the amount of recovery of items (including refunds of any state and local income taxes, other than Illinois) that you deducted on your U.S. 1040, Schedule A in a prior year. You must have included these items on your U.S. 1040, page 1, and your Form IL-1040, Line 1, for this tax year.

For additional assistance, please refer to Illinois Schedule M Instructions