Illinois Tax Form Schedule 4255

What is Ilinois Tax Form Schedule 4255

Schedule 4255 Illinois is a critical document for taxpayers in the state who need to adjust their tax liabilities due to specific changes in their investment situations. It's primarily used for the recapture of various investment tax credits previously claimed against Illinois income or replacement tax liabilities. If certain conditions are met, such as disqualification of property or investments initially qualifying for tax credits, taxpayers must file Schedule 4255 to recapture some of these credits.

Given the complexities involved, understanding how to properly complete and submit this form is crucial for maintaining compliance with Illinois tax laws.

How to Fill Out Schedule 4255 Illinois

Filling out Illinois Tax Schedule 4255 involves a step-by-step process to ensure all required information is correctly reported. The steps are as follows:

1. Identify the Recapture Requirement: Determine whether you're required to recapture any specific tax credits, such as Enterprise Zone Investment Credit, River Edge Redevelopment Zone Investment Credit, or others listed in IL Schedule 4255 instructions.
2. Complete the appropriate step based on the credit: Schedule 4255 is divided into steps relating to different tax credits. You must complete the step that matches the credit you're required to recapture. Each step involves filling out details about disqualified property.
   • For Enterprise Zone or River Edge Investment Credits.
   • ​​For High Impact Business Investment Credits, and so on. 
3. Provide Detailed Property Information: For each item of disqualified property, enter the date it was placed into service, the disqualification date, a description, the reason for disqualification, and its basis for the computation of the investment credit.
4. Calculate Recapture Amounts: Utilize the provided formula or percentage in each step to calculate the recapture amount for each disqualified property item.
5. Total Up the Recapture Amounts: Sum the calculated recapture amounts for each type of credit being recaptured and enter the totals in the designated lines.
6. Include Additional Information if Required: If you're recapturing additional income tax credits (like Angel Investment Credits), complete Step 6 with the total claimed amount to be recaptured based on specific events triggered within the tax year.

It's imperative to go through the form thoroughly and attach it to your Illinois tax return. Remember, if you're amending credits from multiple years or types, you might need to attach multiple Schedules 4255.

Submission Deadlines and Address

The submission deadline for IL tax Schedule 4255 aligns with your Illinois state tax return due date, typically April 15, unless extended. 

Regarding where to send Schedule 4255, it should be attached and submitted along with your Illinois tax return (IL-1040 for individuals, IL-1120 for corporations, etc.) to the Illinois Department of Revenue (IDOR). If filing electronically, follow the e-filing service guidelines for attaching additional schedules.

In conclusion, Illinois Tax Schedule 4255 plays a vital role in adjusting tax liabilities for those who had previously claimed certain investment tax credits. Proper completion and timely submission of the schedule are essential steps in ensuring compliance with state tax regulations while accurately reflecting changes in your tax situation.