Public Act 103-0647

HB5290 Enrolled LRB103 39138 CES 69280 b

AN ACT concerning health.

Be it enacted by the People of the State of Illinois,

represented in the General Assembly:

Section 1. Short title. This Act may be cited as the

Medical Debt Relief Act.

Section 5. Findings. The General Assembly finds that:

(a) People with medical debt often forgo needed medical

care, have difficulty meeting basic needs, and face an

increased risk of bankruptcy.

(b) Of the estimated 1,900,000 Illinois residents with

medical debt in collections, 1,700,000 live at or below 400%

of the federal poverty guidelines updated periodically in the

Federal Register by the U.S. Department of Health and Human

Services. The average medical debt per individual is

approximately $2,300, and of the total estimated

$4,370,000,000 in medical debt that is in collections in

Illinois, roughly $4,000,000,000 is acquirable, erasable

medical debt carried by low-income Americans.

(c) Medical debt impacts communities throughout the State.

There are at least 12 counties in Illinois in which 20% to 30%

of residents are living with medical debt in collections:

Alexander, Coles, Grundy, Jefferson, Macon, Marion, Massac,

Randolph, Schuyler, Shelby, Vermilion, and Warren counties.

These 12 counties have approximately 475,000 residents, about

112,000 of whom have medical debt in collections. 13% of Cook

County residents have medical debt in collections, and their

medical debts comprise more than a quarter of the statewide

total.

(d) While any person can accumulate medical debt, people

of color are disproportionately affected. Nationally, 13% of

the population has medical debt in collections, but 15% of

people in communities of color have medical debt in

collections. In Illinois, 14% of the population has medical

debt in collections, but 20% of the population in communities

of color have medical debt in collections.

(e) The medical debt disparity reinforces racial inequity

and exacerbates disparities in health outcomes. Structural

barriers, including housing, credit, and employment

opportunities, further increase financial vulnerability for

communities of color, making it more difficult to pay medical

bills on time.

(f) Since medical debt can be difficult for hospital

systems to collect, they will often settle debt obligations

for a fraction of the total amount owed.

(g) Cook County launched a successful effort to erase

medical debt obligations for Cook County residents in

partnership with a national nonprofit organization. Accounting

for Cook County's investment, an additional commitment of

approximately $24,500,000 would eliminate all current medical

debt for Illinois residents living at or below 400% of the

federal poverty guidelines.

(h) Illinois can accelerate health equity for residents

across the State by establishing a Medical Debt Relief Pilot

Program to provide grant funding to a nonprofit medical debt

relief coordinator to relieve thousands of families from the

crushing burden of medical debt.

Section 10. Definitions. As used in this Act:

"Eligible resident" means an individual who:

(1) is a resident of the State of Illinois; and

(2) has a household income at or below 400% of the

federal poverty guidelines or who has medical debt equal

to 5% or more of the individual's household income.

"Department" means the Department of Healthcare and Family

Services.

"Medical debt" means an obligation to pay money arising

from the receipt of health care services.

"Medical debt relief" means the discharge of a patient's

medical debt, including debt that is not in collections.

"Nonprofit medical debt relief coordinator" means a

nonprofit organization that is experienced in locating,

acquiring, and relieving medical debt for individuals and that

is able to discharge medical debt of an eligible resident in a

manner that does not result in a taxable event for the

resident.

"Pilot program" means the Medical Debt Relief Pilot

Program.

Section 15. Medical Debt Relief Pilot Program.

(a) Subject to appropriation, the Department of Healthcare

and Family Services shall establish a Medical Debt Relief

Pilot Program to discharge the medical debt of eligible

residents.

(b) Under the pilot program, the Department shall provide

grant funding to a nonprofit medical debt relief coordinator

to use the grant funds and any other private funds available to

negotiate and settle, to the extent possible, the medical debt

of eligible residents owed to hospitals and other health care

providers and entities. The hospitals and other health care

providers and entities may be located outside of the State of

Illinois, so long as the negotiation and settlement of medical

debt is on behalf of an eligible resident.

(c) The Department shall establish the pilot program no

later than January 1, 2025. The Department shall administer

the pilot program consistent with the requirements of the

Grant Accountability and Transparency Act to determine which

nonprofit medical debt relief coordinator to use, unless the

Department and the State's Grant Accountability and

Transparency Unit determine that only a single nonprofit

medical debt relief coordinator has the capacity and

willingness to carry out the duties specified in this Act. The

Department shall publish on its website any agreement,

including amendments and attachments, entered into with a debt

relief coordinator within 5 business days after the agreement

or amendment was entered into by the Department.

(d) The nonprofit medical debt relief coordinator shall:

(1) Identify eligible residents who qualify for the

pilot program.

(2) Review the medical debt accounts of each

commercial debt collection agency or health care provider

willing to sell medical debt accounts of eligible

residents.

(3) Conduct an outreach pilot program with hospitals,

hospital systems, and other providers and entities about

the benefits of the Medical Debt Relief Pilot Program.

Such outreach shall first be initiated with safety-net

hospitals.

(4) Negotiate and acquire medical debt of eligible

residents from health care providers and medical debt

collection agencies.

(5) Within 60 days of the acquisition of an eligible

resident's medical debt, notify all eligible residents

whose medical debt has been discharged under the pilot

program, in a manner approved by the Department, that they

no longer have specified medical debt owed to the relevant

health care provider or commercial debt collection agency.

(6) Not attempt to seek payment from an eligible

resident for medical debt purchased by the nonprofit

medical debt relief coordinator.

(7) To the extent possible, give priority to hospitals

and providers who serve a high percentage of volume of

Medicaid customers and providers located in

disproportionately impacted area zip codes.

(e) The Department shall provide an annual report to the

Governor and General Assembly that includes, but is not

limited to:

(1) The amount of medical debt purchased and

discharged under the pilot program.

(2) The number of eligible residents who received

medical debt relief under the pilot program.

(3) The demographic characteristics of the eligible

residents, including, but not limited to, race, ethnicity,

income level, zip code, and insurance status.

(4) The number and characteristics of health care

providers from whom medical debt was purchased and

discharged, including, but not limited to, geography and

payor mix.

(f) The Department shall adopt any rules necessary to

implement this Act.

Section 20. Repealer. The Act is repealed on July 1, 2029.

Section 100. The State Finance Act is amended by adding

Sections 5.1015 and 6z-140 as follows:

(30 ILCS 105/5.1015 new)

Sec. 5.1015. The Medical Debt Relief Pilot Program Fund.

(30 ILCS 105/6z-140 new)

Sec. 6z-140. Medical Debt Relief Pilot Program Fund. The

Medical Debt Relief Pilot Program Fund is created as a special

fund in the State treasury. All moneys in the Fund shall be

appropriated to the Department of Healthcare and Family

Services and expended exclusively for the Medical Debt Relief

Pilot Program to provide grant funding to a nonprofit medical

debt relief coordinator to be used to discharge the medical

debt of eligible residents as defined in the Medical Debt

Relief Act. Based on a budget approved by the Department, the

grant funding may also be used for any administrative services

provided by the nonprofit medical debt relief coordinator to

discharge the medical debt of eligible residents.

Section 105. The Illinois Income Tax Act is amended by

changing Section 203 as follows:

(35 ILCS 5/203)

Sec. 203. Base income defined.

(a) Individuals.

(1) In general. In the case of an individual, base

income means an amount equal to the taxpayer's adjusted

gross income for the taxable year as modified by paragraph

(2).

(2) Modifications. The adjusted gross income referred

to in paragraph (1) shall be modified by adding thereto

the sum of the following amounts:

(A) An amount equal to all amounts paid or accrued

to the taxpayer as interest or dividends during the

taxable year to the extent excluded from gross income

in the computation of adjusted gross income, except

stock dividends of qualified public utilities

described in Section 305(e) of the Internal Revenue

Code;

(B) An amount equal to the amount of tax imposed by

this Act to the extent deducted from gross income in

the computation of adjusted gross income for the

taxable year;

(C) An amount equal to the amount received during

the taxable year as a recovery or refund of real

property taxes paid with respect to the taxpayer's

principal residence under the Revenue Act of 1939 and

for which a deduction was previously taken under

subparagraph (L) of this paragraph (2) prior to July

1, 1991, the retrospective application date of Article

4 of Public Act 87-17. In the case of multi-unit or

multi-use structures and farm dwellings, the taxes on

the taxpayer's principal residence shall be that

portion of the total taxes for the entire property

which is attributable to such principal residence;

(D) An amount equal to the amount of the capital

gain deduction allowable under the Internal Revenue

Code, to the extent deducted from gross income in the

computation of adjusted gross income;

(D-5) An amount, to the extent not included in

adjusted gross income, equal to the amount of money

withdrawn by the taxpayer in the taxable year from a

medical care savings account and the interest earned

on the account in the taxable year of a withdrawal

pursuant to subsection (b) of Section 20 of the

Medical Care Savings Account Act or subsection (b) of

Section 20 of the Medical Care Savings Account Act of

2000;

(D-10) For taxable years ending after December 31,

1997, an amount equal to any eligible remediation

costs that the individual deducted in computing

adjusted gross income and for which the individual

claims a credit under subsection (l) of Section 201;

(D-15) For taxable years 2001 and thereafter, an

amount equal to the bonus depreciation deduction taken

on the taxpayer's federal income tax return for the

taxable year under subsection (k) of Section 168 of

the Internal Revenue Code;

(D-16) If the taxpayer sells, transfers, abandons,

or otherwise disposes of property for which the

taxpayer was required in any taxable year to make an

addition modification under subparagraph (D-15), then

an amount equal to the aggregate amount of the

deductions taken in all taxable years under

subparagraph (Z) with respect to that property.

If the taxpayer continues to own property through

the last day of the last tax year for which a

subtraction is allowed with respect to that property

under subparagraph (Z) and for which the taxpayer was

allowed in any taxable year to make a subtraction

modification under subparagraph (Z), then an amount

equal to that subtraction modification.

The taxpayer is required to make the addition

modification under this subparagraph only once with

respect to any one piece of property;

(D-17) An amount equal to the amount otherwise

allowed as a deduction in computing base income for

interest paid, accrued, or incurred, directly or

indirectly, (i) for taxable years ending on or after

December 31, 2004, to a foreign person who would be a

member of the same unitary business group but for the

fact that foreign person's business activity outside

the United States is 80% or more of the foreign

person's total business activity and (ii) for taxable

years ending on or after December 31, 2008, to a person

who would be a member of the same unitary business

group but for the fact that the person is prohibited

under Section 1501(a)(27) from being included in the

unitary business group because he or she is ordinarily

required to apportion business income under different

subsections of Section 304. The addition modification

required by this subparagraph shall be reduced to the

extent that dividends were included in base income of

the unitary group for the same taxable year and

received by the taxpayer or by a member of the

taxpayer's unitary business group (including amounts

included in gross income under Sections 951 through

964 of the Internal Revenue Code and amounts included

in gross income under Section 78 of the Internal

Revenue Code) with respect to the stock of the same

person to whom the interest was paid, accrued, or

incurred.

This paragraph shall not apply to the following:

(i) an item of interest paid, accrued, or

incurred, directly or indirectly, to a person who

is subject in a foreign country or state, other

than a state which requires mandatory unitary

reporting, to a tax on or measured by net income

with respect to such interest; or

(ii) an item of interest paid, accrued, or

incurred, directly or indirectly, to a person if

the taxpayer can establish, based on a

preponderance of the evidence, both of the

following:

(a) the person, during the same taxable

year, paid, accrued, or incurred, the interest

to a person that is not a related member, and

(b) the transaction giving rise to the

interest expense between the taxpayer and the

person did not have as a principal purpose the

avoidance of Illinois income tax, and is paid

pursuant to a contract or agreement that

reflects an arm's-length interest rate and

terms; or

(iii) the taxpayer can establish, based on

clear and convincing evidence, that the interest

paid, accrued, or incurred relates to a contract

or agreement entered into at arm's-length rates

and terms and the principal purpose for the

payment is not federal or Illinois tax avoidance;

or

(iv) an item of interest paid, accrued, or

incurred, directly or indirectly, to a person if

the taxpayer establishes by clear and convincing

evidence that the adjustments are unreasonable; or

if the taxpayer and the Director agree in writing

to the application or use of an alternative method

of apportionment under Section 304(f).

Nothing in this subsection shall preclude the

Director from making any other adjustment

otherwise allowed under Section 404 of this Act

for any tax year beginning after the effective

date of this amendment provided such adjustment is

made pursuant to regulation adopted by the

Department and such regulations provide methods

and standards by which the Department will utilize

its authority under Section 404 of this Act;

(D-18) An amount equal to the amount of intangible

expenses and costs otherwise allowed as a deduction in

computing base income, and that were paid, accrued, or

incurred, directly or indirectly, (i) for taxable

years ending on or after December 31, 2004, to a

foreign person who would be a member of the same

unitary business group but for the fact that the

foreign person's business activity outside the United

States is 80% or more of that person's total business

activity and (ii) for taxable years ending on or after

December 31, 2008, to a person who would be a member of

the same unitary business group but for the fact that

the person is prohibited under Section 1501(a)(27)

from being included in the unitary business group

because he or she is ordinarily required to apportion

business income under different subsections of Section

304. The addition modification required by this

subparagraph shall be reduced to the extent that

dividends were included in base income of the unitary

group for the same taxable year and received by the

taxpayer or by a member of the taxpayer's unitary

business group (including amounts included in gross

income under Sections 951 through 964 of the Internal

Revenue Code and amounts included in gross income

under Section 78 of the Internal Revenue Code) with

respect to the stock of the same person to whom the

intangible expenses and costs were directly or

indirectly paid, incurred, or accrued. The preceding

sentence does not apply to the extent that the same

dividends caused a reduction to the addition

modification required under Section 203(a)(2)(D-17) of

this Act. As used in this subparagraph, the term

"intangible expenses and costs" includes (1) expenses,

losses, and costs for, or related to, the direct or

indirect acquisition, use, maintenance or management,

ownership, sale, exchange, or any other disposition of

intangible property; (2) losses incurred, directly or

indirectly, from factoring transactions or discounting

transactions; (3) royalty, patent, technical, and

copyright fees; (4) licensing fees; and (5) other

similar expenses and costs. For purposes of this

subparagraph, "intangible property" includes patents,

patent applications, trade names, trademarks, service

marks, copyrights, mask works, trade secrets, and

similar types of intangible assets.

This paragraph shall not apply to the following:

(i) any item of intangible expenses or costs

paid, accrued, or incurred, directly or

indirectly, from a transaction with a person who

is subject in a foreign country or state, other

than a state which requires mandatory unitary

reporting, to a tax on or measured by net income

with respect to such item; or

(ii) any item of intangible expense or cost

paid, accrued, or incurred, directly or

indirectly, if the taxpayer can establish, based

on a preponderance of the evidence, both of the

following:

(a) the person during the same taxable

year paid, accrued, or incurred, the

intangible expense or cost to a person that is

not a related member, and

(b) the transaction giving rise to the

intangible expense or cost between the

taxpayer and the person did not have as a

principal purpose the avoidance of Illinois

income tax, and is paid pursuant to a contract

or agreement that reflects arm's-length terms;

or

(iii) any item of intangible expense or cost

paid, accrued, or incurred, directly or

indirectly, from a transaction with a person if

the taxpayer establishes by clear and convincing

evidence, that the adjustments are unreasonable;

or if the taxpayer and the Director agree in

writing to the application or use of an

alternative method of apportionment under Section

304(f);

Nothing in this subsection shall preclude the

Director from making any other adjustment

otherwise allowed under Section 404 of this Act

for any tax year beginning after the effective

date of this amendment provided such adjustment is

made pursuant to regulation adopted by the

Department and such regulations provide methods

and standards by which the Department will utilize

its authority under Section 404 of this Act;

(D-19) For taxable years ending on or after

December 31, 2008, an amount equal to the amount of

insurance premium expenses and costs otherwise allowed

as a deduction in computing base income, and that were

paid, accrued, or incurred, directly or indirectly, to

a person who would be a member of the same unitary

business group but for the fact that the person is

prohibited under Section 1501(a)(27) from being

included in the unitary business group because he or

she is ordinarily required to apportion business

income under different subsections of Section 304. The

addition modification required by this subparagraph

shall be reduced to the extent that dividends were

included in base income of the unitary group for the

same taxable year and received by the taxpayer or by a

member of the taxpayer's unitary business group

(including amounts included in gross income under

Sections 951 through 964 of the Internal Revenue Code

and amounts included in gross income under Section 78

of the Internal Revenue Code) with respect to the

stock of the same person to whom the premiums and costs

were directly or indirectly paid, incurred, or

accrued. The preceding sentence does not apply to the

extent that the same dividends caused a reduction to

the addition modification required under Section

203(a)(2)(D-17) or Section 203(a)(2)(D-18) of this

Act;

(D-20) For taxable years beginning on or after

January 1, 2002 and ending on or before December 31,

2006, in the case of a distribution from a qualified

tuition program under Section 529 of the Internal

Revenue Code, other than (i) a distribution from a

College Savings Pool created under Section 16.5 of the

State Treasurer Act or (ii) a distribution from the

Illinois Prepaid Tuition Trust Fund, an amount equal

to the amount excluded from gross income under Section

529(c)(3)(B). For taxable years beginning on or after

January 1, 2007, in the case of a distribution from a

qualified tuition program under Section 529 of the

Internal Revenue Code, other than (i) a distribution

from a College Savings Pool created under Section 16.5

of the State Treasurer Act, (ii) a distribution from

the Illinois Prepaid Tuition Trust Fund, or (iii) a

distribution from a qualified tuition program under

Section 529 of the Internal Revenue Code that (I)

adopts and determines that its offering materials

comply with the College Savings Plans Network's

disclosure principles and (II) has made reasonable

efforts to inform in-state residents of the existence

of in-state qualified tuition programs by informing

Illinois residents directly and, where applicable, to

inform financial intermediaries distributing the

program to inform in-state residents of the existence

of in-state qualified tuition programs at least

annually, an amount equal to the amount excluded from

gross income under Section 529(c)(3)(B).

For the purposes of this subparagraph (D-20), a

qualified tuition program has made reasonable efforts

if it makes disclosures (which may use the term

"in-state program" or "in-state plan" and need not

specifically refer to Illinois or its qualified

programs by name) (i) directly to prospective

participants in its offering materials or makes a

public disclosure, such as a website posting; and (ii)

where applicable, to intermediaries selling the

out-of-state program in the same manner that the

out-of-state program distributes its offering

materials;

(D-20.5) For taxable years beginning on or after

January 1, 2018, in the case of a distribution from a

qualified ABLE program under Section 529A of the

Internal Revenue Code, other than a distribution from

a qualified ABLE program created under Section 16.6 of

the State Treasurer Act, an amount equal to the amount

excluded from gross income under Section 529A(c)(1)(B)

of the Internal Revenue Code;

(D-21) For taxable years beginning on or after

January 1, 2007, in the case of transfer of moneys from

a qualified tuition program under Section 529 of the

Internal Revenue Code that is administered by the

State to an out-of-state program, an amount equal to

the amount of moneys previously deducted from base

income under subsection (a)(2)(Y) of this Section;

(D-21.5) For taxable years beginning on or after

January 1, 2018, in the case of the transfer of moneys

from a qualified tuition program under Section 529 or

a qualified ABLE program under Section 529A of the

Internal Revenue Code that is administered by this

State to an ABLE account established under an

out-of-state ABLE account program, an amount equal to

the contribution component of the transferred amount

that was previously deducted from base income under

subsection (a)(2)(Y) or subsection (a)(2)(HH) of this

Section;

(D-22) For taxable years beginning on or after

January 1, 2009, and prior to January 1, 2018, in the

case of a nonqualified withdrawal or refund of moneys

from a qualified tuition program under Section 529 of

the Internal Revenue Code administered by the State

that is not used for qualified expenses at an eligible

education institution, an amount equal to the

contribution component of the nonqualified withdrawal

or refund that was previously deducted from base

income under subsection (a)(2)(y) of this Section,

provided that the withdrawal or refund did not result

from the beneficiary's death or disability. For

taxable years beginning on or after January 1, 2018:

(1) in the case of a nonqualified withdrawal or

refund, as defined under Section 16.5 of the State

Treasurer Act, of moneys from a qualified tuition

program under Section 529 of the Internal Revenue Code

administered by the State, an amount equal to the

contribution component of the nonqualified withdrawal

or refund that was previously deducted from base

income under subsection (a)(2)(Y) of this Section, and

(2) in the case of a nonqualified withdrawal or refund

from a qualified ABLE program under Section 529A of

the Internal Revenue Code administered by the State

that is not used for qualified disability expenses, an

amount equal to the contribution component of the

nonqualified withdrawal or refund that was previously

deducted from base income under subsection (a)(2)(HH)

of this Section;

(D-23) An amount equal to the credit allowable to

the taxpayer under Section 218(a) of this Act,

determined without regard to Section 218(c) of this

Act;

(D-24) For taxable years ending on or after

December 31, 2017, an amount equal to the deduction

allowed under Section 199 of the Internal Revenue Code

for the taxable year;

(D-25) In the case of a resident, an amount equal

to the amount of tax for which a credit is allowed

pursuant to Section 201(p)(7) of this Act;

and by deducting from the total so obtained the sum of the

following amounts:

(E) For taxable years ending before December 31,

2001, any amount included in such total in respect of

any compensation (including but not limited to any

compensation paid or accrued to a serviceman while a

prisoner of war or missing in action) paid to a

resident by reason of being on active duty in the Armed

Forces of the United States and in respect of any

compensation paid or accrued to a resident who as a

governmental employee was a prisoner of war or missing

in action, and in respect of any compensation paid to a

resident in 1971 or thereafter for annual training

performed pursuant to Sections 502 and 503, Title 32,

United States Code as a member of the Illinois

National Guard or, beginning with taxable years ending

on or after December 31, 2007, the National Guard of

any other state. For taxable years ending on or after

December 31, 2001, any amount included in such total

in respect of any compensation (including but not

limited to any compensation paid or accrued to a

serviceman while a prisoner of war or missing in

action) paid to a resident by reason of being a member

of any component of the Armed Forces of the United

States and in respect of any compensation paid or

accrued to a resident who as a governmental employee

was a prisoner of war or missing in action, and in

respect of any compensation paid to a resident in 2001

or thereafter by reason of being a member of the

Illinois National Guard or, beginning with taxable

years ending on or after December 31, 2007, the

National Guard of any other state. The provisions of

this subparagraph (E) are exempt from the provisions

of Section 250;

(F) An amount equal to all amounts included in

such total pursuant to the provisions of Sections

402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and

408 of the Internal Revenue Code, or included in such

total as distributions under the provisions of any

retirement or disability plan for employees of any

governmental agency or unit, or retirement payments to

retired partners, which payments are excluded in

computing net earnings from self employment by Section

1402 of the Internal Revenue Code and regulations

adopted pursuant thereto;

(G) The valuation limitation amount;

(H) An amount equal to the amount of any tax

imposed by this Act which was refunded to the taxpayer

and included in such total for the taxable year;

(I) An amount equal to all amounts included in

such total pursuant to the provisions of Section 111

of the Internal Revenue Code as a recovery of items

previously deducted from adjusted gross income in the

computation of taxable income;

(J) An amount equal to those dividends included in

such total which were paid by a corporation which

conducts business operations in a River Edge

Redevelopment Zone or zones created under the River

Edge Redevelopment Zone Act, and conducts

substantially all of its operations in a River Edge

Redevelopment Zone or zones. This subparagraph (J) is

exempt from the provisions of Section 250;

(K) An amount equal to those dividends included in

such total that were paid by a corporation that

conducts business operations in a federally designated

Foreign Trade Zone or Sub-Zone and that is designated

a High Impact Business located in Illinois; provided

that dividends eligible for the deduction provided in

subparagraph (J) of paragraph (2) of this subsection

shall not be eligible for the deduction provided under

this subparagraph (K);

(L) For taxable years ending after December 31,

1983, an amount equal to all social security benefits

and railroad retirement benefits included in such

total pursuant to Sections 72(r) and 86 of the

Internal Revenue Code;

(M) With the exception of any amounts subtracted

under subparagraph (N), an amount equal to the sum of

all amounts disallowed as deductions by (i) Sections

171(a)(2) and 265(a)(2) of the Internal Revenue Code,

and all amounts of expenses allocable to interest and

disallowed as deductions by Section 265(a)(1) of the

Internal Revenue Code; and (ii) for taxable years

ending on or after August 13, 1999, Sections

171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the

Internal Revenue Code, plus, for taxable years ending

on or after December 31, 2011, Section 45G(e)(3) of

the Internal Revenue Code and, for taxable years

ending on or after December 31, 2008, any amount

included in gross income under Section 87 of the

Internal Revenue Code; the provisions of this

subparagraph are exempt from the provisions of Section

250;

(N) An amount equal to all amounts included in

such total which are exempt from taxation by this

State either by reason of its statutes or Constitution

or by reason of the Constitution, treaties or statutes

of the United States; provided that, in the case of any

statute of this State that exempts income derived from

bonds or other obligations from the tax imposed under

this Act, the amount exempted shall be the interest

net of bond premium amortization;

(O) An amount equal to any contribution made to a

job training project established pursuant to the Tax

Increment Allocation Redevelopment Act;

(P) An amount equal to the amount of the deduction

used to compute the federal income tax credit for

restoration of substantial amounts held under claim of

right for the taxable year pursuant to Section 1341 of

the Internal Revenue Code or of any itemized deduction

taken from adjusted gross income in the computation of

taxable income for restoration of substantial amounts

held under claim of right for the taxable year;

(Q) An amount equal to any amounts included in

such total, received by the taxpayer as an

acceleration in the payment of life, endowment or

annuity benefits in advance of the time they would

otherwise be payable as an indemnity for a terminal

illness;

(R) An amount equal to the amount of any federal or

State bonus paid to veterans of the Persian Gulf War;

(S) An amount, to the extent included in adjusted

gross income, equal to the amount of a contribution

made in the taxable year on behalf of the taxpayer to a

medical care savings account established under the

Medical Care Savings Account Act or the Medical Care

Savings Account Act of 2000 to the extent the

contribution is accepted by the account administrator

as provided in that Act;

(T) An amount, to the extent included in adjusted

gross income, equal to the amount of interest earned

in the taxable year on a medical care savings account

established under the Medical Care Savings Account Act

or the Medical Care Savings Account Act of 2000 on

behalf of the taxpayer, other than interest added

pursuant to item (D-5) of this paragraph (2);

(U) For one taxable year beginning on or after

January 1, 1994, an amount equal to the total amount of

tax imposed and paid under subsections (a) and (b) of

Section 201 of this Act on grant amounts received by

the taxpayer under the Nursing Home Grant Assistance

Act during the taxpayer's taxable years 1992 and 1993;

(V) Beginning with tax years ending on or after

December 31, 1995 and ending with tax years ending on

or before December 31, 2004, an amount equal to the

amount paid by a taxpayer who is a self-employed

taxpayer, a partner of a partnership, or a shareholder

in a Subchapter S corporation for health insurance or

long-term care insurance for that taxpayer or that

taxpayer's spouse or dependents, to the extent that

the amount paid for that health insurance or long-term

care insurance may be deducted under Section 213 of

the Internal Revenue Code, has not been deducted on

the federal income tax return of the taxpayer, and

does not exceed the taxable income attributable to

that taxpayer's income, self-employment income, or

Subchapter S corporation income; except that no

deduction shall be allowed under this item (V) if the

taxpayer is eligible to participate in any health

insurance or long-term care insurance plan of an

employer of the taxpayer or the taxpayer's spouse. The

amount of the health insurance and long-term care

insurance subtracted under this item (V) shall be

determined by multiplying total health insurance and

long-term care insurance premiums paid by the taxpayer

times a number that represents the fractional

percentage of eligible medical expenses under Section

213 of the Internal Revenue Code of 1986 not actually

deducted on the taxpayer's federal income tax return;

(W) For taxable years beginning on or after

January 1, 1998, all amounts included in the

taxpayer's federal gross income in the taxable year

from amounts converted from a regular IRA to a Roth

IRA. This paragraph is exempt from the provisions of

Section 250;

(X) For taxable year 1999 and thereafter, an

amount equal to the amount of any (i) distributions,

to the extent includible in gross income for federal

income tax purposes, made to the taxpayer because of

his or her status as a victim of persecution for racial

or religious reasons by Nazi Germany or any other Axis

regime or as an heir of the victim and (ii) items of

income, to the extent includible in gross income for

federal income tax purposes, attributable to, derived

from or in any way related to assets stolen from,

hidden from, or otherwise lost to a victim of

persecution for racial or religious reasons by Nazi

Germany or any other Axis regime immediately prior to,

during, and immediately after World War II, including,

but not limited to, interest on the proceeds

receivable as insurance under policies issued to a

victim of persecution for racial or religious reasons

by Nazi Germany or any other Axis regime by European

insurance companies immediately prior to and during

World War II; provided, however, this subtraction from

federal adjusted gross income does not apply to assets

acquired with such assets or with the proceeds from

the sale of such assets; provided, further, this

paragraph shall only apply to a taxpayer who was the

first recipient of such assets after their recovery

and who is a victim of persecution for racial or

religious reasons by Nazi Germany or any other Axis

regime or as an heir of the victim. The amount of and

the eligibility for any public assistance, benefit, or

similar entitlement is not affected by the inclusion

of items (i) and (ii) of this paragraph in gross income

for federal income tax purposes. This paragraph is

exempt from the provisions of Section 250;

(Y) For taxable years beginning on or after

January 1, 2002 and ending on or before December 31,

2004, moneys contributed in the taxable year to a

College Savings Pool account under Section 16.5 of the

State Treasurer Act, except that amounts excluded from

gross income under Section 529(c)(3)(C)(i) of the

Internal Revenue Code shall not be considered moneys

contributed under this subparagraph (Y). For taxable

years beginning on or after January 1, 2005, a maximum

of $10,000 contributed in the taxable year to (i) a

College Savings Pool account under Section 16.5 of the

State Treasurer Act or (ii) the Illinois Prepaid

Tuition Trust Fund, except that amounts excluded from

gross income under Section 529(c)(3)(C)(i) of the

Internal Revenue Code shall not be considered moneys

contributed under this subparagraph (Y). For purposes

of this subparagraph, contributions made by an

employer on behalf of an employee, or matching

contributions made by an employee, shall be treated as

made by the employee. This subparagraph (Y) is exempt

from the provisions of Section 250;

(Z) For taxable years 2001 and thereafter, for the

taxable year in which the bonus depreciation deduction

is taken on the taxpayer's federal income tax return

under subsection (k) of Section 168 of the Internal

Revenue Code and for each applicable taxable year

thereafter, an amount equal to "x", where:

(1) "y" equals the amount of the depreciation

deduction taken for the taxable year on the

taxpayer's federal income tax return on property

for which the bonus depreciation deduction was

taken in any year under subsection (k) of Section

168 of the Internal Revenue Code, but not

including the bonus depreciation deduction;

(2) for taxable years ending on or before

December 31, 2005, "x" equals "y" multiplied by 30

and then divided by 70 (or "y" multiplied by

0.429); and

(3) for taxable years ending after December

31, 2005:

(i) for property on which a bonus

depreciation deduction of 30% of the adjusted

basis was taken, "x" equals "y" multiplied by

30 and then divided by 70 (or "y" multiplied

by 0.429);

(ii) for property on which a bonus

depreciation deduction of 50% of the adjusted

basis was taken, "x" equals "y" multiplied by

1.0;

(iii) for property on which a bonus

depreciation deduction of 100% of the adjusted

basis was taken in a taxable year ending on or

after December 31, 2021, "x" equals the

depreciation deduction that would be allowed

on that property if the taxpayer had made the

election under Section 168(k)(7) of the

Internal Revenue Code to not claim bonus

depreciation on that property; and

(iv) for property on which a bonus

depreciation deduction of a percentage other

than 30%, 50% or 100% of the adjusted basis

was taken in a taxable year ending on or after

December 31, 2021, "x" equals "y" multiplied

by 100 times the percentage bonus depreciation

on the property (that is, 100(bonus%)) and

then divided by 100 times 1 minus the

percentage bonus depreciation on the property

(that is, 100(1-bonus%)).

The aggregate amount deducted under this

subparagraph in all taxable years for any one piece of

property may not exceed the amount of the bonus

depreciation deduction taken on that property on the

taxpayer's federal income tax return under subsection

(k) of Section 168 of the Internal Revenue Code. This

subparagraph (Z) is exempt from the provisions of

Section 250;

(AA) If the taxpayer sells, transfers, abandons,

or otherwise disposes of property for which the

taxpayer was required in any taxable year to make an

addition modification under subparagraph (D-15), then

an amount equal to that addition modification.

If the taxpayer continues to own property through

the last day of the last tax year for which a

subtraction is allowed with respect to that property

under subparagraph (Z) and for which the taxpayer was

required in any taxable year to make an addition

modification under subparagraph (D-15), then an amount

equal to that addition modification.

The taxpayer is allowed to take the deduction

under this subparagraph only once with respect to any

one piece of property.

This subparagraph (AA) is exempt from the

provisions of Section 250;

(BB) Any amount included in adjusted gross income,

other than salary, received by a driver in a

ridesharing arrangement using a motor vehicle;

(CC) The amount of (i) any interest income (net of

the deductions allocable thereto) taken into account

for the taxable year with respect to a transaction

with a taxpayer that is required to make an addition

modification with respect to such transaction under

Section 203(a)(2)(D-17), 203(b)(2)(E-12),

203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed

the amount of that addition modification, and (ii) any

income from intangible property (net of the deductions

allocable thereto) taken into account for the taxable

year with respect to a transaction with a taxpayer

that is required to make an addition modification with

respect to such transaction under Section

203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or

203(d)(2)(D-8), but not to exceed the amount of that

addition modification. This subparagraph (CC) is

exempt from the provisions of Section 250;

(DD) An amount equal to the interest income taken

into account for the taxable year (net of the

deductions allocable thereto) with respect to

transactions with (i) a foreign person who would be a

member of the taxpayer's unitary business group but

for the fact that the foreign person's business

activity outside the United States is 80% or more of

that person's total business activity and (ii) for

taxable years ending on or after December 31, 2008, to

a person who would be a member of the same unitary

business group but for the fact that the person is

prohibited under Section 1501(a)(27) from being

included in the unitary business group because he or

she is ordinarily required to apportion business

income under different subsections of Section 304, but

not to exceed the addition modification required to be

made for the same taxable year under Section

203(a)(2)(D-17) for interest paid, accrued, or

incurred, directly or indirectly, to the same person.

This subparagraph (DD) is exempt from the provisions

of Section 250;

(EE) An amount equal to the income from intangible

property taken into account for the taxable year (net

of the deductions allocable thereto) with respect to

transactions with (i) a foreign person who would be a

member of the taxpayer's unitary business group but

for the fact that the foreign person's business

activity outside the United States is 80% or more of

that person's total business activity and (ii) for

taxable years ending on or after December 31, 2008, to

a person who would be a member of the same unitary

business group but for the fact that the person is

prohibited under Section 1501(a)(27) from being

included in the unitary business group because he or

she is ordinarily required to apportion business

income under different subsections of Section 304, but

not to exceed the addition modification required to be

made for the same taxable year under Section

203(a)(2)(D-18) for intangible expenses and costs

paid, accrued, or incurred, directly or indirectly, to

the same foreign person. This subparagraph (EE) is

exempt from the provisions of Section 250;

(FF) An amount equal to any amount awarded to the

taxpayer during the taxable year by the Court of

Claims under subsection (c) of Section 8 of the Court

of Claims Act for time unjustly served in a State

prison. This subparagraph (FF) is exempt from the

provisions of Section 250;

(GG) For taxable years ending on or after December

31, 2011, in the case of a taxpayer who was required to

add back any insurance premiums under Section

203(a)(2)(D-19), such taxpayer may elect to subtract

that part of a reimbursement received from the

insurance company equal to the amount of the expense

or loss (including expenses incurred by the insurance

company) that would have been taken into account as a

deduction for federal income tax purposes if the

expense or loss had been uninsured. If a taxpayer

makes the election provided for by this subparagraph

(GG), the insurer to which the premiums were paid must

add back to income the amount subtracted by the

taxpayer pursuant to this subparagraph (GG). This

subparagraph (GG) is exempt from the provisions of

Section 250;

(HH) For taxable years beginning on or after

January 1, 2018 and prior to January 1, 2028, a maximum

of $10,000 contributed in the taxable year to a

qualified ABLE account under Section 16.6 of the State

Treasurer Act, except that amounts excluded from gross

income under Section 529(c)(3)(C)(i) or Section

529A(c)(1)(C) of the Internal Revenue Code shall not

be considered moneys contributed under this

subparagraph (HH). For purposes of this subparagraph

(HH), contributions made by an employer on behalf of

an employee, or matching contributions made by an

employee, shall be treated as made by the employee;

(II) For taxable years that begin on or after

January 1, 2021 and begin before January 1, 2026, the

amount that is included in the taxpayer's federal

adjusted gross income pursuant to Section 61 of the

Internal Revenue Code as discharge of indebtedness

attributable to student loan forgiveness and that is

not excluded from the taxpayer's federal adjusted

gross income pursuant to paragraph (5) of subsection

(f) of Section 108 of the Internal Revenue Code; and

(JJ) For taxable years beginning on or after

January 1, 2023, for any cannabis establishment

operating in this State and licensed under the

Cannabis Regulation and Tax Act or any cannabis

cultivation center or medical cannabis dispensing

organization operating in this State and licensed

under the Compassionate Use of Medical Cannabis

Program Act, an amount equal to the deductions that

were disallowed under Section 280E of the Internal

Revenue Code for the taxable year and that would not be

added back under this subsection. The provisions of

this subparagraph (JJ) are exempt from the provisions

of Section 250; and .

(KK) (JJ) To the extent includible in gross income

for federal income tax purposes, any amount awarded or

paid to the taxpayer as a result of a judgment or

settlement for fertility fraud as provided in Section

15 of the Illinois Fertility Fraud Act, donor

fertility fraud as provided in Section 20 of the

Illinois Fertility Fraud Act, or similar action in

another state.

(LL) For taxable years beginning on or after

January 1, 2025, if the taxpayer is an eligible

resident as defined in the Medical Debt Relief Act, an

amount equal to the amount included in the taxpayer's

federal adjusted gross income that is attributable to

medical debt relief received by the taxpayer during

the taxable year from a nonprofit medical debt relief

coordinator under the provisions of the Medical Debt

Relief Act. This subparagraph (LL) is exempt from the

provisions of Section 250.

(b) Corporations.

(1) In general. In the case of a corporation, base

income means an amount equal to the taxpayer's taxable

income for the taxable year as modified by paragraph (2).

(2) Modifications. The taxable income referred to in

paragraph (1) shall be modified by adding thereto the sum

of the following amounts:

(A) An amount equal to all amounts paid or accrued

to the taxpayer as interest and all distributions

received from regulated investment companies during

the taxable year to the extent excluded from gross

income in the computation of taxable income;

(B) An amount equal to the amount of tax imposed by

this Act to the extent deducted from gross income in

the computation of taxable income for the taxable

year;

(C) In the case of a regulated investment company,

an amount equal to the excess of (i) the net long-term

capital gain for the taxable year, over (ii) the

amount of the capital gain dividends designated as

such in accordance with Section 852(b)(3)(C) of the

Internal Revenue Code and any amount designated under

Section 852(b)(3)(D) of the Internal Revenue Code,

attributable to the taxable year (this amendatory Act

of 1995 (Public Act 89-89) is declarative of existing

law and is not a new enactment);

(D) The amount of any net operating loss deduction

taken in arriving at taxable income, other than a net

operating loss carried forward from a taxable year

ending prior to December 31, 1986;

(E) For taxable years in which a net operating

loss carryback or carryforward from a taxable year

ending prior to December 31, 1986 is an element of

taxable income under paragraph (1) of subsection (e)

or subparagraph (E) of paragraph (2) of subsection

(e), the amount by which addition modifications other

than those provided by this subparagraph (E) exceeded

subtraction modifications in such earlier taxable

year, with the following limitations applied in the

order that they are listed:

(i) the addition modification relating to the

net operating loss carried back or forward to the

taxable year from any taxable year ending prior to

December 31, 1986 shall be reduced by the amount

of addition modification under this subparagraph

(E) which related to that net operating loss and

which was taken into account in calculating the

base income of an earlier taxable year, and

(ii) the addition modification relating to the

net operating loss carried back or forward to the

taxable year from any taxable year ending prior to

December 31, 1986 shall not exceed the amount of

such carryback or carryforward;

For taxable years in which there is a net

operating loss carryback or carryforward from more

than one other taxable year ending prior to December

31, 1986, the addition modification provided in this

subparagraph (E) shall be the sum of the amounts

computed independently under the preceding provisions

of this subparagraph (E) for each such taxable year;

(E-5) For taxable years ending after December 31,

1997, an amount equal to any eligible remediation

costs that the corporation deducted in computing

adjusted gross income and for which the corporation

claims a credit under subsection (l) of Section 201;

(E-10) For taxable years 2001 and thereafter, an

amount equal to the bonus depreciation deduction taken

on the taxpayer's federal income tax return for the

taxable year under subsection (k) of Section 168 of

the Internal Revenue Code;

(E-11) If the taxpayer sells, transfers, abandons,

or otherwise disposes of property for which the

taxpayer was required in any taxable year to make an

addition modification under subparagraph (E-10), then

an amount equal to the aggregate amount of the

deductions taken in all taxable years under

subparagraph (T) with respect to that property.

If the taxpayer continues to own property through

the last day of the last tax year for which a

subtraction is allowed with respect to that property

under subparagraph (T) and for which the taxpayer was

allowed in any taxable year to make a subtraction

modification under subparagraph (T), then an amount

equal to that subtraction modification.

The taxpayer is required to make the addition

modification under this subparagraph only once with

respect to any one piece of property;

(E-12) An amount equal to the amount otherwise

allowed as a deduction in computing base income for

interest paid, accrued, or incurred, directly or

indirectly, (i) for taxable years ending on or after

December 31, 2004, to a foreign person who would be a

member of the same unitary business group but for the

fact the foreign person's business activity outside

the United States is 80% or more of the foreign

person's total business activity and (ii) for taxable

years ending on or after December 31, 2008, to a person

who would be a member of the same unitary business

group but for the fact that the person is prohibited

under Section 1501(a)(27) from being included in the

unitary business group because he or she is ordinarily

required to apportion business income under different

subsections of Section 304. The addition modification

required by this subparagraph shall be reduced to the

extent that dividends were included in base income of

the unitary group for the same taxable year and

received by the taxpayer or by a member of the

taxpayer's unitary business group (including amounts

included in gross income pursuant to Sections 951

through 964 of the Internal Revenue Code and amounts

included in gross income under Section 78 of the

Internal Revenue Code) with respect to the stock of

the same person to whom the interest was paid,

accrued, or incurred.

This paragraph shall not apply to the following:

(i) an item of interest paid, accrued, or

incurred, directly or indirectly, to a person who

is subject in a foreign country or state, other

than a state which requires mandatory unitary

reporting, to a tax on or measured by net income

with respect to such interest; or

(ii) an item of interest paid, accrued, or

incurred, directly or indirectly, to a person if

the taxpayer can establish, based on a

preponderance of the evidence, both of the

following:

(a) the person, during the same taxable

year, paid, accrued, or incurred, the interest

to a person that is not a related member, and

(b) the transaction giving rise to the

interest expense between the taxpayer and the

person did not have as a principal purpose the

avoidance of Illinois income tax, and is paid

pursuant to a contract or agreement that

reflects an arm's-length interest rate and

terms; or

(iii) the taxpayer can establish, based on

clear and convincing evidence, that the interest

paid, accrued, or incurred relates to a contract

or agreement entered into at arm's-length rates

and terms and the principal purpose for the

payment is not federal or Illinois tax avoidance;

or

(iv) an item of interest paid, accrued, or

incurred, directly or indirectly, to a person if

the taxpayer establishes by clear and convincing

evidence that the adjustments are unreasonable; or

if the taxpayer and the Director agree in writing

to the application or use of an alternative method

of apportionment under Section 304(f).

Nothing in this subsection shall preclude the

Director from making any other adjustment

otherwise allowed under Section 404 of this Act

for any tax year beginning after the effective

date of this amendment provided such adjustment is

made pursuant to regulation adopted by the

Department and such regulations provide methods

and standards by which the Department will utilize

its authority under Section 404 of this Act;

(E-13) An amount equal to the amount of intangible

expenses and costs otherwise allowed as a deduction in

computing base income, and that were paid, accrued, or

incurred, directly or indirectly, (i) for taxable

years ending on or after December 31, 2004, to a

foreign person who would be a member of the same

unitary business group but for the fact that the

foreign person's business activity outside the United

States is 80% or more of that person's total business

activity and (ii) for taxable years ending on or after

December 31, 2008, to a person who would be a member of

the same unitary business group but for the fact that

the person is prohibited under Section 1501(a)(27)

from being included in the unitary business group

because he or she is ordinarily required to apportion

business income under different subsections of Section

304. The addition modification required by this

subparagraph shall be reduced to the extent that

dividends were included in base income of the unitary

group for the same taxable year and received by the

taxpayer or by a member of the taxpayer's unitary

business group (including amounts included in gross

income pursuant to Sections 951 through 964 of the

Internal Revenue Code and amounts included in gross

income under Section 78 of the Internal Revenue Code)

with respect to the stock of the same person to whom

the intangible expenses and costs were directly or

indirectly paid, incurred, or accrued. The preceding

sentence shall not apply to the extent that the same

dividends caused a reduction to the addition

modification required under Section 203(b)(2)(E-12) of

this Act. As used in this subparagraph, the term

"intangible expenses and costs" includes (1) expenses,

losses, and costs for, or related to, the direct or

indirect acquisition, use, maintenance or management,

ownership, sale, exchange, or any other disposition of

intangible property; (2) losses incurred, directly or

indirectly, from factoring transactions or discounting

transactions; (3) royalty, patent, technical, and

copyright fees; (4) licensing fees; and (5) other

similar expenses and costs. For purposes of this

subparagraph, "intangible property" includes patents,

patent applications, trade names, trademarks, service

marks, copyrights, mask works, trade secrets, and

similar types of intangible assets.

This paragraph shall not apply to the following:

(i) any item of intangible expenses or costs

paid, accrued, or incurred, directly or

indirectly, from a transaction with a person who

is subject in a foreign country or state, other

than a state which requires mandatory unitary

reporting, to a tax on or measured by net income

with respect to such item; or

(ii) any item of intangible expense or cost

paid, accrued, or incurred, directly or

indirectly, if the taxpayer can establish, based

on a preponderance of the evidence, both of the

following:

(a) the person during the same taxable

year paid, accrued, or incurred, the

intangible expense or cost to a person that is

not a related member, and

(b) the transaction giving rise to the

intangible expense or cost between the

taxpayer and the person did not have as a

principal purpose the avoidance of Illinois

income tax, and is paid pursuant to a contract

or agreement that reflects arm's-length terms;

or

(iii) any item of intangible expense or cost

paid, accrued, or incurred, directly or

indirectly, from a transaction with a person if

the taxpayer establishes by clear and convincing

evidence, that the adjustments are unreasonable;

or if the taxpayer and the Director agree in

writing to the application or use of an

alternative method of apportionment under Section

304(f);

Nothing in this subsection shall preclude the

Director from making any other adjustment

otherwise allowed under Section 404 of this Act

for any tax year beginning after the effective

date of this amendment provided such adjustment is

made pursuant to regulation adopted by the

Department and such regulations provide methods

and standards by which the Department will utilize

its authority under Section 404 of this Act;

(E-14) For taxable years ending on or after

December 31, 2008, an amount equal to the amount of

insurance premium expenses and costs otherwise allowed

as a deduction in computing base income, and that were

paid, accrued, or incurred, directly or indirectly, to

a person who would be a member of the same unitary

business group but for the fact that the person is

prohibited under Section 1501(a)(27) from being

included in the unitary business group because he or

she is ordinarily required to apportion business

income under different subsections of Section 304. The

addition modification required by this subparagraph

shall be reduced to the extent that dividends were

included in base income of the unitary group for the

same taxable year and received by the taxpayer or by a

member of the taxpayer's unitary business group

(including amounts included in gross income under

Sections 951 through 964 of the Internal Revenue Code

and amounts included in gross income under Section 78

of the Internal Revenue Code) with respect to the

stock of the same person to whom the premiums and costs

were directly or indirectly paid, incurred, or

accrued. The preceding sentence does not apply to the

extent that the same dividends caused a reduction to

the addition modification required under Section

203(b)(2)(E-12) or Section 203(b)(2)(E-13) of this

Act;

(E-15) For taxable years beginning after December

31, 2008, any deduction for dividends paid by a

captive real estate investment trust that is allowed

to a real estate investment trust under Section

857(b)(2)(B) of the Internal Revenue Code for

dividends paid;

(E-16) An amount equal to the credit allowable to

the taxpayer under Section 218(a) of this Act,

determined without regard to Section 218(c) of this

Act;

(E-17) For taxable years ending on or after

December 31, 2017, an amount equal to the deduction

allowed under Section 199 of the Internal Revenue Code

for the taxable year;

(E-18) for taxable years beginning after December

31, 2018, an amount equal to the deduction allowed

under Section 250(a)(1)(A) of the Internal Revenue

Code for the taxable year;

(E-19) for taxable years ending on or after June

30, 2021, an amount equal to the deduction allowed

under Section 250(a)(1)(B)(i) of the Internal Revenue

Code for the taxable year;

(E-20) for taxable years ending on or after June

30, 2021, an amount equal to the deduction allowed

under Sections 243(e) and 245A(a) of the Internal

Revenue Code for the taxable year.

and by deducting from the total so obtained the sum of the

following amounts:

(F) An amount equal to the amount of any tax

imposed by this Act which was refunded to the taxpayer

and included in such total for the taxable year;

(G) An amount equal to any amount included in such

total under Section 78 of the Internal Revenue Code;

(H) In the case of a regulated investment company,

an amount equal to the amount of exempt interest

dividends as defined in subsection (b)(5) of Section

852 of the Internal Revenue Code, paid to shareholders

for the taxable year;

(I) With the exception of any amounts subtracted

under subparagraph (J), an amount equal to the sum of

all amounts disallowed as deductions by (i) Sections

171(a)(2) and 265(a)(2) and amounts disallowed as

interest expense by Section 291(a)(3) of the Internal

Revenue Code, and all amounts of expenses allocable to

interest and disallowed as deductions by Section

265(a)(1) of the Internal Revenue Code; and (ii) for

taxable years ending on or after August 13, 1999,

Sections 171(a)(2), 265, 280C, 291(a)(3), and

832(b)(5)(B)(i) of the Internal Revenue Code, plus,

for tax years ending on or after December 31, 2011,

amounts disallowed as deductions by Section 45G(e)(3)

of the Internal Revenue Code and, for taxable years

ending on or after December 31, 2008, any amount

included in gross income under Section 87 of the

Internal Revenue Code and the policyholders' share of

tax-exempt interest of a life insurance company under

Section 807(a)(2)(B) of the Internal Revenue Code (in

the case of a life insurance company with gross income

from a decrease in reserves for the tax year) or

Section 807(b)(1)(B) of the Internal Revenue Code (in

the case of a life insurance company allowed a

deduction for an increase in reserves for the tax

year); the provisions of this subparagraph are exempt

from the provisions of Section 250;

(J) An amount equal to all amounts included in

such total which are exempt from taxation by this

State either by reason of its statutes or Constitution

or by reason of the Constitution, treaties or statutes

of the United States; provided that, in the case of any

statute of this State that exempts income derived from

bonds or other obligations from the tax imposed under

this Act, the amount exempted shall be the interest

net of bond premium amortization;

(K) An amount equal to those dividends included in

such total which were paid by a corporation which

conducts business operations in a River Edge

Redevelopment Zone or zones created under the River

Edge Redevelopment Zone Act and conducts substantially

all of its operations in a River Edge Redevelopment

Zone or zones. This subparagraph (K) is exempt from

the provisions of Section 250;

(L) An amount equal to those dividends included in

such total that were paid by a corporation that

conducts business operations in a federally designated

Foreign Trade Zone or Sub-Zone and that is designated

a High Impact Business located in Illinois; provided

that dividends eligible for the deduction provided in

subparagraph (K) of paragraph 2 of this subsection

shall not be eligible for the deduction provided under

this subparagraph (L);

(M) For any taxpayer that is a financial

organization within the meaning of Section 304(c) of

this Act, an amount included in such total as interest

income from a loan or loans made by such taxpayer to a

borrower, to the extent that such a loan is secured by

property which is eligible for the River Edge

Redevelopment Zone Investment Credit. To determine the

portion of a loan or loans that is secured by property

eligible for a Section 201(f) investment credit to the

borrower, the entire principal amount of the loan or

loans between the taxpayer and the borrower should be

divided into the basis of the Section 201(f)

investment credit property which secures the loan or

loans, using for this purpose the original basis of

such property on the date that it was placed in service

in the River Edge Redevelopment Zone. The subtraction

modification available to the taxpayer in any year

under this subsection shall be that portion of the

total interest paid by the borrower with respect to

such loan attributable to the eligible property as

calculated under the previous sentence. This

subparagraph (M) is exempt from the provisions of

Section 250;

(M-1) For any taxpayer that is a financial

organization within the meaning of Section 304(c) of

this Act, an amount included in such total as interest

income from a loan or loans made by such taxpayer to a

borrower, to the extent that such a loan is secured by

property which is eligible for the High Impact

Business Investment Credit. To determine the portion

of a loan or loans that is secured by property eligible

for a Section 201(h) investment credit to the

borrower, the entire principal amount of the loan or

loans between the taxpayer and the borrower should be

divided into the basis of the Section 201(h)

investment credit property which secures the loan or

loans, using for this purpose the original basis of

such property on the date that it was placed in service

in a federally designated Foreign Trade Zone or

Sub-Zone located in Illinois. No taxpayer that is

eligible for the deduction provided in subparagraph

(M) of paragraph (2) of this subsection shall be

eligible for the deduction provided under this

subparagraph (M-1). The subtraction modification

available to taxpayers in any year under this

subsection shall be that portion of the total interest

paid by the borrower with respect to such loan

attributable to the eligible property as calculated

under the previous sentence;

(N) Two times any contribution made during the

taxable year to a designated zone organization to the

extent that the contribution (i) qualifies as a

charitable contribution under subsection (c) of

Section 170 of the Internal Revenue Code and (ii)

must, by its terms, be used for a project approved by

the Department of Commerce and Economic Opportunity

under Section 11 of the Illinois Enterprise Zone Act

or under Section 10-10 of the River Edge Redevelopment

Zone Act. This subparagraph (N) is exempt from the

provisions of Section 250;

(O) An amount equal to: (i) 85% for taxable years

ending on or before December 31, 1992, or, a

percentage equal to the percentage allowable under

Section 243(a)(1) of the Internal Revenue Code of 1986

for taxable years ending after December 31, 1992, of

the amount by which dividends included in taxable

income and received from a corporation that is not

created or organized under the laws of the United

States or any state or political subdivision thereof,

including, for taxable years ending on or after

December 31, 1988, dividends received or deemed

received or paid or deemed paid under Sections 951

through 965 of the Internal Revenue Code, exceed the

amount of the modification provided under subparagraph

(G) of paragraph (2) of this subsection (b) which is

related to such dividends, and including, for taxable

years ending on or after December 31, 2008, dividends

received from a captive real estate investment trust;

plus (ii) 100% of the amount by which dividends,

included in taxable income and received, including,

for taxable years ending on or after December 31,

1988, dividends received or deemed received or paid or

deemed paid under Sections 951 through 964 of the

Internal Revenue Code and including, for taxable years

ending on or after December 31, 2008, dividends

received from a captive real estate investment trust,

from any such corporation specified in clause (i) that

would but for the provisions of Section 1504(b)(3) of

the Internal Revenue Code be treated as a member of the

affiliated group which includes the dividend

recipient, exceed the amount of the modification

provided under subparagraph (G) of paragraph (2) of

this subsection (b) which is related to such

dividends. For taxable years ending on or after June

30, 2021, (i) for purposes of this subparagraph, the

term "dividend" does not include any amount treated as

a dividend under Section 1248 of the Internal Revenue

Code, and (ii) this subparagraph shall not apply to

dividends for which a deduction is allowed under

Section 245(a) of the Internal Revenue Code. This

subparagraph (O) is exempt from the provisions of

Section 250 of this Act;

(P) An amount equal to any contribution made to a

job training project established pursuant to the Tax

Increment Allocation Redevelopment Act;

(Q) An amount equal to the amount of the deduction

used to compute the federal income tax credit for

restoration of substantial amounts held under claim of

right for the taxable year pursuant to Section 1341 of

the Internal Revenue Code;

(R) On and after July 20, 1999, in the case of an

attorney-in-fact with respect to whom an interinsurer

or a reciprocal insurer has made the election under

Section 835 of the Internal Revenue Code, 26 U.S.C.

835, an amount equal to the excess, if any, of the

amounts paid or incurred by that interinsurer or

reciprocal insurer in the taxable year to the

attorney-in-fact over the deduction allowed to that

interinsurer or reciprocal insurer with respect to the

attorney-in-fact under Section 835(b) of the Internal

Revenue Code for the taxable year; the provisions of

this subparagraph are exempt from the provisions of

Section 250;

(S) For taxable years ending on or after December

31, 1997, in the case of a Subchapter S corporation, an

amount equal to all amounts of income allocable to a

shareholder subject to the Personal Property Tax

Replacement Income Tax imposed by subsections (c) and

(d) of Section 201 of this Act, including amounts

allocable to organizations exempt from federal income

tax by reason of Section 501(a) of the Internal

Revenue Code. This subparagraph (S) is exempt from the

provisions of Section 250;

(T) For taxable years 2001 and thereafter, for the

taxable year in which the bonus depreciation deduction

is taken on the taxpayer's federal income tax return

under subsection (k) of Section 168 of the Internal

Revenue Code and for each applicable taxable year

thereafter, an amount equal to "x", where:

(1) "y" equals the amount of the depreciation

deduction taken for the taxable year on the

taxpayer's federal income tax return on property

for which the bonus depreciation deduction was

taken in any year under subsection (k) of Section

168 of the Internal Revenue Code, but not

including the bonus depreciation deduction;

(2) for taxable years ending on or before

December 31, 2005, "x" equals "y" multiplied by 30

and then divided by 70 (or "y" multiplied by

0.429); and

(3) for taxable years ending after December

31, 2005:

(i) for property on which a bonus

depreciation deduction of 30% of the adjusted

basis was taken, "x" equals "y" multiplied by

30 and then divided by 70 (or "y" multiplied

by 0.429);

(ii) for property on which a bonus

depreciation deduction of 50% of the adjusted

basis was taken, "x" equals "y" multiplied by

1.0;

(iii) for property on which a bonus

depreciation deduction of 100% of the adjusted

basis was taken in a taxable year ending on or

after December 31, 2021, "x" equals the

depreciation deduction that would be allowed

on that property if the taxpayer had made the

election under Section 168(k)(7) of the

Internal Revenue Code to not claim bonus

depreciation on that property; and

(iv) for property on which a bonus

depreciation deduction of a percentage other

than 30%, 50% or 100% of the adjusted basis

was taken in a taxable year ending on or after

December 31, 2021, "x" equals "y" multiplied

by 100 times the percentage bonus depreciation

on the property (that is, 100(bonus%)) and

then divided by 100 times 1 minus the

percentage bonus depreciation on the property

(that is, 100(1-bonus%)).

The aggregate amount deducted under this

subparagraph in all taxable years for any one piece of

property may not exceed the amount of the bonus

depreciation deduction taken on that property on the

taxpayer's federal income tax return under subsection

(k) of Section 168 of the Internal Revenue Code. This

subparagraph (T) is exempt from the provisions of

Section 250;

(U) If the taxpayer sells, transfers, abandons, or

otherwise disposes of property for which the taxpayer

was required in any taxable year to make an addition

modification under subparagraph (E-10), then an amount

equal to that addition modification.

If the taxpayer continues to own property through

the last day of the last tax year for which a

subtraction is allowed with respect to that property

under subparagraph (T) and for which the taxpayer was

required in any taxable year to make an addition

modification under subparagraph (E-10), then an amount

equal to that addition modification.

The taxpayer is allowed to take the deduction

under this subparagraph only once with respect to any

one piece of property.

This subparagraph (U) is exempt from the

provisions of Section 250;

(V) The amount of: (i) any interest income (net of

the deductions allocable thereto) taken into account

for the taxable year with respect to a transaction

with a taxpayer that is required to make an addition

modification with respect to such transaction under

Section 203(a)(2)(D-17), 203(b)(2)(E-12),

203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed

the amount of such addition modification, (ii) any

income from intangible property (net of the deductions

allocable thereto) taken into account for the taxable

year with respect to a transaction with a taxpayer

that is required to make an addition modification with

respect to such transaction under Section

203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or

203(d)(2)(D-8), but not to exceed the amount of such

addition modification, and (iii) any insurance premium

income (net of deductions allocable thereto) taken

into account for the taxable year with respect to a

transaction with a taxpayer that is required to make

an addition modification with respect to such

transaction under Section 203(a)(2)(D-19), Section

203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section

203(d)(2)(D-9), but not to exceed the amount of that

addition modification. This subparagraph (V) is exempt

from the provisions of Section 250;

(W) An amount equal to the interest income taken

into account for the taxable year (net of the

deductions allocable thereto) with respect to

transactions with (i) a foreign person who would be a

member of the taxpayer's unitary business group but

for the fact that the foreign person's business

activity outside the United States is 80% or more of

that person's total business activity and (ii) for

taxable years ending on or after December 31, 2008, to

a person who would be a member of the same unitary

business group but for the fact that the person is

prohibited under Section 1501(a)(27) from being

included in the unitary business group because he or

she is ordinarily required to apportion business

income under different subsections of Section 304, but

not to exceed the addition modification required to be

made for the same taxable year under Section

203(b)(2)(E-12) for interest paid, accrued, or

incurred, directly or indirectly, to the same person.

This subparagraph (W) is exempt from the provisions of

Section 250;

(X) An amount equal to the income from intangible

property taken into account for the taxable year (net

of the deductions allocable thereto) with respect to

transactions with (i) a foreign person who would be a

member of the taxpayer's unitary business group but

for the fact that the foreign person's business

activity outside the United States is 80% or more of

that person's total business activity and (ii) for

taxable years ending on or after December 31, 2008, to

a person who would be a member of the same unitary

business group but for the fact that the person is

prohibited under Section 1501(a)(27) from being

included in the unitary business group because he or

she is ordinarily required to apportion business

income under different subsections of Section 304, but

not to exceed the addition modification required to be

made for the same taxable year under Section

203(b)(2)(E-13) for intangible expenses and costs

paid, accrued, or incurred, directly or indirectly, to

the same foreign person. This subparagraph (X) is

exempt from the provisions of Section 250;

(Y) For taxable years ending on or after December

31, 2011, in the case of a taxpayer who was required to

add back any insurance premiums under Section

203(b)(2)(E-14), such taxpayer may elect to subtract

that part of a reimbursement received from the

insurance company equal to the amount of the expense

or loss (including expenses incurred by the insurance

company) that would have been taken into account as a

deduction for federal income tax purposes if the

expense or loss had been uninsured. If a taxpayer

makes the election provided for by this subparagraph

(Y), the insurer to which the premiums were paid must

add back to income the amount subtracted by the

taxpayer pursuant to this subparagraph (Y). This

subparagraph (Y) is exempt from the provisions of

Section 250;

(Z) The difference between the nondeductible

controlled foreign corporation dividends under Section

965(e)(3) of the Internal Revenue Code over the

taxable income of the taxpayer, computed without

regard to Section 965(e)(2)(A) of the Internal Revenue

Code, and without regard to any net operating loss

deduction. This subparagraph (Z) is exempt from the

provisions of Section 250; and

(AA) For taxable years beginning on or after

January 1, 2023, for any cannabis establishment

operating in this State and licensed under the

Cannabis Regulation and Tax Act or any cannabis

cultivation center or medical cannabis dispensing

organization operating in this State and licensed

under the Compassionate Use of Medical Cannabis

Program Act, an amount equal to the deductions that

were disallowed under Section 280E of the Internal

Revenue Code for the taxable year and that would not be

added back under this subsection. The provisions of

this subparagraph (AA) are exempt from the provisions

of Section 250.

(3) Special rule. For purposes of paragraph (2)(A),

"gross income" in the case of a life insurance company,

for tax years ending on and after December 31, 1994, and

prior to December 31, 2011, shall mean the gross

investment income for the taxable year and, for tax years

ending on or after December 31, 2011, shall mean all

amounts included in life insurance gross income under

Section 803(a)(3) of the Internal Revenue Code.

(c) Trusts and estates.

(1) In general. In the case of a trust or estate, base

income means an amount equal to the taxpayer's taxable

income for the taxable year as modified by paragraph (2).

(2) Modifications. Subject to the provisions of

paragraph (3), the taxable income referred to in paragraph

(1) shall be modified by adding thereto the sum of the

following amounts:

(A) An amount equal to all amounts paid or accrued

to the taxpayer as interest or dividends during the

taxable year to the extent excluded from gross income

in the computation of taxable income;

(B) In the case of (i) an estate, $600; (ii) a

trust which, under its governing instrument, is

required to distribute all of its income currently,

$300; and (iii) any other trust, $100, but in each such

case, only to the extent such amount was deducted in

the computation of taxable income;

(C) An amount equal to the amount of tax imposed by

this Act to the extent deducted from gross income in

the computation of taxable income for the taxable

year;

(D) The amount of any net operating loss deduction

taken in arriving at taxable income, other than a net

operating loss carried forward from a taxable year

ending prior to December 31, 1986;

(E) For taxable years in which a net operating

loss carryback or carryforward from a taxable year

ending prior to December 31, 1986 is an element of

taxable income under paragraph (1) of subsection (e)

or subparagraph (E) of paragraph (2) of subsection

(e), the amount by which addition modifications other

than those provided by this subparagraph (E) exceeded

subtraction modifications in such taxable year, with

the following limitations applied in the order that

they are listed:

(i) the addition modification relating to the

net operating loss carried back or forward to the

taxable year from any taxable year ending prior to

December 31, 1986 shall be reduced by the amount

of addition modification under this subparagraph

(E) which related to that net operating loss and

which was taken into account in calculating the

base income of an earlier taxable year, and

(ii) the addition modification relating to the

net operating loss carried back or forward to the

taxable year from any taxable year ending prior to

December 31, 1986 shall not exceed the amount of

such carryback or carryforward;

For taxable years in which there is a net

operating loss carryback or carryforward from more

than one other taxable year ending prior to December

31, 1986, the addition modification provided in this

subparagraph (E) shall be the sum of the amounts

computed independently under the preceding provisions

of this subparagraph (E) for each such taxable year;

(F) For taxable years ending on or after January

1, 1989, an amount equal to the tax deducted pursuant

to Section 164 of the Internal Revenue Code if the

trust or estate is claiming the same tax for purposes

of the Illinois foreign tax credit under Section 601

of this Act;

(G) An amount equal to the amount of the capital

gain deduction allowable under the Internal Revenue

Code, to the extent deducted from gross income in the

computation of taxable income;

(G-5) For taxable years ending after December 31,

1997, an amount equal to any eligible remediation

costs that the trust or estate deducted in computing

adjusted gross income and for which the trust or

estate claims a credit under subsection (l) of Section

201;

(G-10) For taxable years 2001 and thereafter, an

amount equal to the bonus depreciation deduction taken

on the taxpayer's federal income tax return for the

taxable year under subsection (k) of Section 168 of

the Internal Revenue Code; and

(G-11) If the taxpayer sells, transfers, abandons,

or otherwise disposes of property for which the

taxpayer was required in any taxable year to make an

addition modification under subparagraph (G-10), then

an amount equal to the aggregate amount of the

deductions taken in all taxable years under

subparagraph (R) with respect to that property.

If the taxpayer continues to own property through

the last day of the last tax year for which a

subtraction is allowed with respect to that property

under subparagraph (R) and for which the taxpayer was

allowed in any taxable year to make a subtraction

modification under subparagraph (R), then an amount

equal to that subtraction modification.

The taxpayer is required to make the addition

modification under this subparagraph only once with

respect to any one piece of property;

(G-12) An amount equal to the amount otherwise

allowed as a deduction in computing base income for

interest paid, accrued, or incurred, directly or

indirectly, (i) for taxable years ending on or after

December 31, 2004, to a foreign person who would be a

member of the same unitary business group but for the

fact that the foreign person's business activity

outside the United States is 80% or more of the foreign

person's total business activity and (ii) for taxable

years ending on or after December 31, 2008, to a person

who would be a member of the same unitary business

group but for the fact that the person is prohibited

under Section 1501(a)(27) from being included in the

unitary business group because he or she is ordinarily

required to apportion business income under different

subsections of Section 304. The addition modification

required by this subparagraph shall be reduced to the

extent that dividends were included in base income of

the unitary group for the same taxable year and

received by the taxpayer or by a member of the

taxpayer's unitary business group (including amounts

included in gross income pursuant to Sections 951

through 964 of the Internal Revenue Code and amounts

included in gross income under Section 78 of the

Internal Revenue Code) with respect to the stock of

the same person to whom the interest was paid,

accrued, or incurred.

This paragraph shall not apply to the following:

(i) an item of interest paid, accrued, or

incurred, directly or indirectly, to a person who

is subject in a foreign country or state, other

than a state which requires mandatory unitary

reporting, to a tax on or measured by net income

with respect to such interest; or

(ii) an item of interest paid, accrued, or

incurred, directly or indirectly, to a person if

the taxpayer can establish, based on a

preponderance of the evidence, both of the

following:

(a) the person, during the same taxable

year, paid, accrued, or incurred, the interest

to a person that is not a related member, and

(b) the transaction giving rise to the

interest expense between the taxpayer and the

person did not have as a principal purpose the

avoidance of Illinois income tax, and is paid

pursuant to a contract or agreement that

reflects an arm's-length interest rate and

terms; or

(iii) the taxpayer can establish, based on

clear and convincing evidence, that the interest

paid, accrued, or incurred relates to a contract

or agreement entered into at arm's-length rates

and terms and the principal purpose for the

payment is not federal or Illinois tax avoidance;

or

(iv) an item of interest paid, accrued, or

incurred, directly or indirectly, to a person if

the taxpayer establishes by clear and convincing

evidence that the adjustments are unreasonable; or

if the taxpayer and the Director agree in writing

to the application or use of an alternative method

of apportionment under Section 304(f).

Nothing in this subsection shall preclude the

Director from making any other adjustment

otherwise allowed under Section 404 of this Act

for any tax year beginning after the effective

date of this amendment provided such adjustment is

made pursuant to regulation adopted by the

Department and such regulations provide methods

and standards by which the Department will utilize

its authority under Section 404 of this Act;

(G-13) An amount equal to the amount of intangible

expenses and costs otherwise allowed as a deduction in

computing base income, and that were paid, accrued, or

incurred, directly or indirectly, (i) for taxable

years ending on or after December 31, 2004, to a

foreign person who would be a member of the same

unitary business group but for the fact that the

foreign person's business activity outside the United

States is 80% or more of that person's total business

activity and (ii) for taxable years ending on or after

December 31, 2008, to a person who would be a member of

the same unitary business group but for the fact that

the person is prohibited under Section 1501(a)(27)

from being included in the unitary business group

because he or she is ordinarily required to apportion

business income under different subsections of Section

304. The addition modification required by this

subparagraph shall be reduced to the extent that

dividends were included in base income of the unitary

group for the same taxable year and received by the

taxpayer or by a member of the taxpayer's unitary

business group (including amounts included in gross

income pursuant to Sections 951 through 964 of the

Internal Revenue Code and amounts included in gross

income under Section 78 of the Internal Revenue Code)

with respect to the stock of the same person to whom

the intangible expenses and costs were directly or

indirectly paid, incurred, or accrued. The preceding

sentence shall not apply to the extent that the same

dividends caused a reduction to the addition

modification required under Section 203(c)(2)(G-12) of

this Act. As used in this subparagraph, the term

"intangible expenses and costs" includes: (1)

expenses, losses, and costs for or related to the

direct or indirect acquisition, use, maintenance or

management, ownership, sale, exchange, or any other

disposition of intangible property; (2) losses

incurred, directly or indirectly, from factoring

transactions or discounting transactions; (3) royalty,

patent, technical, and copyright fees; (4) licensing

fees; and (5) other similar expenses and costs. For

purposes of this subparagraph, "intangible property"

includes patents, patent applications, trade names,

trademarks, service marks, copyrights, mask works,

trade secrets, and similar types of intangible assets.

This paragraph shall not apply to the following:

(i) any item of intangible expenses or costs

paid, accrued, or incurred, directly or

indirectly, from a transaction with a person who

is subject in a foreign country or state, other

than a state which requires mandatory unitary

reporting, to a tax on or measured by net income

with respect to such item; or

(ii) any item of intangible expense or cost

paid, accrued, or incurred, directly or

indirectly, if the taxpayer can establish, based

on a preponderance of the evidence, both of the

following:

(a) the person during the same taxable

year paid, accrued, or incurred, the

intangible expense or cost to a person that is

not a related member, and

(b) the transaction giving rise to the

intangible expense or cost between the

taxpayer and the person did not have as a

principal purpose the avoidance of Illinois

income tax, and is paid pursuant to a contract

or agreement that reflects arm's-length terms;

or

(iii) any item of intangible expense or cost

paid, accrued, or incurred, directly or

indirectly, from a transaction with a person if

the taxpayer establishes by clear and convincing

evidence, that the adjustments are unreasonable;

or if the taxpayer and the Director agree in

writing to the application or use of an

alternative method of apportionment under Section

304(f);

Nothing in this subsection shall preclude the

Director from making any other adjustment

otherwise allowed under Section 404 of this Act

for any tax year beginning after the effective

date of this amendment provided such adjustment is

made pursuant to regulation adopted by the

Department and such regulations provide methods

and standards by which the Department will utilize

its authority under Section 404 of this Act;

(G-14) For taxable years ending on or after

December 31, 2008, an amount equal to the amount of

insurance premium expenses and costs otherwise allowed

as a deduction in computing base income, and that were

paid, accrued, or incurred, directly or indirectly, to

a person who would be a member of the same unitary

business group but for the fact that the person is

prohibited under Section 1501(a)(27) from being

included in the unitary business group because he or

she is ordinarily required to apportion business

income under different subsections of Section 304. The

addition modification required by this subparagraph

shall be reduced to the extent that dividends were

included in base income of the unitary group for the

same taxable year and received by the taxpayer or by a

member of the taxpayer's unitary business group

(including amounts included in gross income under

Sections 951 through 964 of the Internal Revenue Code

and amounts included in gross income under Section 78

of the Internal Revenue Code) with respect to the

stock of the same person to whom the premiums and costs

were directly or indirectly paid, incurred, or

accrued. The preceding sentence does not apply to the

extent that the same dividends caused a reduction to

the addition modification required under Section

203(c)(2)(G-12) or Section 203(c)(2)(G-13) of this

Act;

(G-15) An amount equal to the credit allowable to

the taxpayer under Section 218(a) of this Act,

determined without regard to Section 218(c) of this

Act;

(G-16) For taxable years ending on or after

December 31, 2017, an amount equal to the deduction

allowed under Section 199 of the Internal Revenue Code

for the taxable year;

and by deducting from the total so obtained the sum of the

following amounts:

(H) An amount equal to all amounts included in

such total pursuant to the provisions of Sections

402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and 408

of the Internal Revenue Code or included in such total

as distributions under the provisions of any

retirement or disability plan for employees of any

governmental agency or unit, or retirement payments to

retired partners, which payments are excluded in

computing net earnings from self employment by Section

1402 of the Internal Revenue Code and regulations

adopted pursuant thereto;

(I) The valuation limitation amount;

(J) An amount equal to the amount of any tax

imposed by this Act which was refunded to the taxpayer

and included in such total for the taxable year;

(K) An amount equal to all amounts included in

taxable income as modified by subparagraphs (A), (B),

(C), (D), (E), (F) and (G) which are exempt from

taxation by this State either by reason of its

statutes or Constitution or by reason of the

Constitution, treaties or statutes of the United

States; provided that, in the case of any statute of

this State that exempts income derived from bonds or

other obligations from the tax imposed under this Act,

the amount exempted shall be the interest net of bond

premium amortization;

(L) With the exception of any amounts subtracted

under subparagraph (K), an amount equal to the sum of

all amounts disallowed as deductions by (i) Sections

171(a)(2) and 265(a)(2) of the Internal Revenue Code,

and all amounts of expenses allocable to interest and

disallowed as deductions by Section 265(a)(1) of the

Internal Revenue Code; and (ii) for taxable years

ending on or after August 13, 1999, Sections

171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the

Internal Revenue Code, plus, (iii) for taxable years

ending on or after December 31, 2011, Section

45G(e)(3) of the Internal Revenue Code and, for

taxable years ending on or after December 31, 2008,

any amount included in gross income under Section 87

of the Internal Revenue Code; the provisions of this

subparagraph are exempt from the provisions of Section

250;

(M) An amount equal to those dividends included in

such total which were paid by a corporation which

conducts business operations in a River Edge

Redevelopment Zone or zones created under the River

Edge Redevelopment Zone Act and conducts substantially

all of its operations in a River Edge Redevelopment

Zone or zones. This subparagraph (M) is exempt from

the provisions of Section 250;

(N) An amount equal to any contribution made to a

job training project established pursuant to the Tax

Increment Allocation Redevelopment Act;

(O) An amount equal to those dividends included in

such total that were paid by a corporation that

conducts business operations in a federally designated

Foreign Trade Zone or Sub-Zone and that is designated

a High Impact Business located in Illinois; provided

that dividends eligible for the deduction provided in

subparagraph (M) of paragraph (2) of this subsection

shall not be eligible for the deduction provided under

this subparagraph (O);

(P) An amount equal to the amount of the deduction

used to compute the federal income tax credit for

restoration of substantial amounts held under claim of

right for the taxable year pursuant to Section 1341 of

the Internal Revenue Code;

(Q) For taxable year 1999 and thereafter, an

amount equal to the amount of any (i) distributions,

to the extent includible in gross income for federal

income tax purposes, made to the taxpayer because of

his or her status as a victim of persecution for racial

or religious reasons by Nazi Germany or any other Axis

regime or as an heir of the victim and (ii) items of

income, to the extent includible in gross income for

federal income tax purposes, attributable to, derived

from or in any way related to assets stolen from,

hidden from, or otherwise lost to a victim of

persecution for racial or religious reasons by Nazi

Germany or any other Axis regime immediately prior to,

during, and immediately after World War II, including,

but not limited to, interest on the proceeds

receivable as insurance under policies issued to a

victim of persecution for racial or religious reasons

by Nazi Germany or any other Axis regime by European

insurance companies immediately prior to and during

World War II; provided, however, this subtraction from

federal adjusted gross income does not apply to assets

acquired with such assets or with the proceeds from

the sale of such assets; provided, further, this

paragraph shall only apply to a taxpayer who was the

first recipient of such assets after their recovery

and who is a victim of persecution for racial or

religious reasons by Nazi Germany or any other Axis

regime or as an heir of the victim. The amount of and

the eligibility for any public assistance, benefit, or

similar entitlement is not affected by the inclusion

of items (i) and (ii) of this paragraph in gross income

for federal income tax purposes. This paragraph is

exempt from the provisions of Section 250;

(R) For taxable years 2001 and thereafter, for the

taxable year in which the bonus depreciation deduction

is taken on the taxpayer's federal income tax return

under subsection (k) of Section 168 of the Internal

Revenue Code and for each applicable taxable year

thereafter, an amount equal to "x", where:

(1) "y" equals the amount of the depreciation

deduction taken for the taxable year on the

taxpayer's federal income tax return on property

for which the bonus depreciation deduction was

taken in any year under subsection (k) of Section

168 of the Internal Revenue Code, but not

including the bonus depreciation deduction;

(2) for taxable years ending on or before

December 31, 2005, "x" equals "y" multiplied by 30

and then divided by 70 (or "y" multiplied by

0.429); and

(3) for taxable years ending after December

31, 2005:

(i) for property on which a bonus

depreciation deduction of 30% of the adjusted

basis was taken, "x" equals "y" multiplied by

30 and then divided by 70 (or "y" multiplied

by 0.429);

(ii) for property on which a bonus

depreciation deduction of 50% of the adjusted

basis was taken, "x" equals "y" multiplied by

1.0;

(iii) for property on which a bonus

depreciation deduction of 100% of the adjusted

basis was taken in a taxable year ending on or

after December 31, 2021, "x" equals the

depreciation deduction that would be allowed

on that property if the taxpayer had made the

election under Section 168(k)(7) of the

Internal Revenue Code to not claim bonus

depreciation on that property; and

(iv) for property on which a bonus

depreciation deduction of a percentage other

than 30%, 50% or 100% of the adjusted basis

was taken in a taxable year ending on or after

December 31, 2021, "x" equals "y" multiplied

by 100 times the percentage bonus depreciation

on the property (that is, 100(bonus%)) and

then divided by 100 times 1 minus the

percentage bonus depreciation on the property

(that is, 100(1-bonus%)).

The aggregate amount deducted under this

subparagraph in all taxable years for any one piece of

property may not exceed the amount of the bonus

depreciation deduction taken on that property on the

taxpayer's federal income tax return under subsection

(k) of Section 168 of the Internal Revenue Code. This

subparagraph (R) is exempt from the provisions of

Section 250;

(S) If the taxpayer sells, transfers, abandons, or

otherwise disposes of property for which the taxpayer

was required in any taxable year to make an addition

modification under subparagraph (G-10), then an amount

equal to that addition modification.

If the taxpayer continues to own property through

the last day of the last tax year for which a

subtraction is allowed with respect to that property

under subparagraph (R) and for which the taxpayer was

required in any taxable year to make an addition

modification under subparagraph (G-10), then an amount

equal to that addition modification.

The taxpayer is allowed to take the deduction

under this subparagraph only once with respect to any

one piece of property.

This subparagraph (S) is exempt from the

provisions of Section 250;

(T) The amount of (i) any interest income (net of

the deductions allocable thereto) taken into account

for the taxable year with respect to a transaction

with a taxpayer that is required to make an addition

modification with respect to such transaction under

Section 203(a)(2)(D-17), 203(b)(2)(E-12),

203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed

the amount of such addition modification and (ii) any

income from intangible property (net of the deductions

allocable thereto) taken into account for the taxable

year with respect to a transaction with a taxpayer

that is required to make an addition modification with

respect to such transaction under Section

203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or

203(d)(2)(D-8), but not to exceed the amount of such

addition modification. This subparagraph (T) is exempt

from the provisions of Section 250;

(U) An amount equal to the interest income taken

into account for the taxable year (net of the

deductions allocable thereto) with respect to

transactions with (i) a foreign person who would be a

member of the taxpayer's unitary business group but

for the fact the foreign person's business activity

outside the United States is 80% or more of that

person's total business activity and (ii) for taxable

years ending on or after December 31, 2008, to a person

who would be a member of the same unitary business

group but for the fact that the person is prohibited

under Section 1501(a)(27) from being included in the

unitary business group because he or she is ordinarily

required to apportion business income under different

subsections of Section 304, but not to exceed the

addition modification required to be made for the same

taxable year under Section 203(c)(2)(G-12) for

interest paid, accrued, or incurred, directly or

indirectly, to the same person. This subparagraph (U)

is exempt from the provisions of Section 250;

(V) An amount equal to the income from intangible

property taken into account for the taxable year (net

of the deductions allocable thereto) with respect to

transactions with (i) a foreign person who would be a

member of the taxpayer's unitary business group but

for the fact that the foreign person's business

activity outside the United States is 80% or more of

that person's total business activity and (ii) for

taxable years ending on or after December 31, 2008, to

a person who would be a member of the same unitary

business group but for the fact that the person is

prohibited under Section 1501(a)(27) from being

included in the unitary business group because he or

she is ordinarily required to apportion business

income under different subsections of Section 304, but

not to exceed the addition modification required to be

made for the same taxable year under Section

203(c)(2)(G-13) for intangible expenses and costs

paid, accrued, or incurred, directly or indirectly, to

the same foreign person. This subparagraph (V) is

exempt from the provisions of Section 250;

(W) in the case of an estate, an amount equal to

all amounts included in such total pursuant to the

provisions of Section 111 of the Internal Revenue Code

as a recovery of items previously deducted by the

decedent from adjusted gross income in the computation

of taxable income. This subparagraph (W) is exempt

from Section 250;

(X) an amount equal to the refund included in such

total of any tax deducted for federal income tax

purposes, to the extent that deduction was added back

under subparagraph (F). This subparagraph (X) is

exempt from the provisions of Section 250;

(Y) For taxable years ending on or after December

31, 2011, in the case of a taxpayer who was required to

add back any insurance premiums under Section

203(c)(2)(G-14), such taxpayer may elect to subtract

that part of a reimbursement received from the

insurance company equal to the amount of the expense

or loss (including expenses incurred by the insurance

company) that would have been taken into account as a

deduction for federal income tax purposes if the

expense or loss had been uninsured. If a taxpayer

makes the election provided for by this subparagraph

(Y), the insurer to which the premiums were paid must

add back to income the amount subtracted by the

taxpayer pursuant to this subparagraph (Y). This

subparagraph (Y) is exempt from the provisions of

Section 250;

(Z) For taxable years beginning after December 31,

2018 and before January 1, 2026, the amount of excess

business loss of the taxpayer disallowed as a

deduction by Section 461(l)(1)(B) of the Internal

Revenue Code; and

(AA) For taxable years beginning on or after

January 1, 2023, for any cannabis establishment

operating in this State and licensed under the

Cannabis Regulation and Tax Act or any cannabis

cultivation center or medical cannabis dispensing

organization operating in this State and licensed

under the Compassionate Use of Medical Cannabis

Program Act, an amount equal to the deductions that

were disallowed under Section 280E of the Internal

Revenue Code for the taxable year and that would not be

added back under this subsection. The provisions of

this subparagraph (AA) are exempt from the provisions

of Section 250.

(3) Limitation. The amount of any modification

otherwise required under this subsection shall, under

regulations prescribed by the Department, be adjusted by

any amounts included therein which were properly paid,

credited, or required to be distributed, or permanently

set aside for charitable purposes pursuant to Internal

Revenue Code Section 642(c) during the taxable year.

(d) Partnerships.

(1) In general. In the case of a partnership, base

income means an amount equal to the taxpayer's taxable

income for the taxable year as modified by paragraph (2).

(2) Modifications. The taxable income referred to in

paragraph (1) shall be modified by adding thereto the sum

of the following amounts:

(A) An amount equal to all amounts paid or accrued

to the taxpayer as interest or dividends during the

taxable year to the extent excluded from gross income

in the computation of taxable income;

(B) An amount equal to the amount of tax imposed by

this Act to the extent deducted from gross income for

the taxable year;

(C) The amount of deductions allowed to the

partnership pursuant to Section 707 (c) of the

Internal Revenue Code in calculating its taxable

income;

(D) An amount equal to the amount of the capital

gain deduction allowable under the Internal Revenue

Code, to the extent deducted from gross income in the

computation of taxable income;

(D-5) For taxable years 2001 and thereafter, an

amount equal to the bonus depreciation deduction taken

on the taxpayer's federal income tax return for the

taxable year under subsection (k) of Section 168 of

the Internal Revenue Code;

(D-6) If the taxpayer sells, transfers, abandons,

or otherwise disposes of property for which the

taxpayer was required in any taxable year to make an

addition modification under subparagraph (D-5), then

an amount equal to the aggregate amount of the

deductions taken in all taxable years under

subparagraph (O) with respect to that property.

If the taxpayer continues to own property through

the last day of the last tax year for which a

subtraction is allowed with respect to that property

under subparagraph (O) and for which the taxpayer was

allowed in any taxable year to make a subtraction

modification under subparagraph (O), then an amount

equal to that subtraction modification.

The taxpayer is required to make the addition

modification under this subparagraph only once with

respect to any one piece of property;

(D-7) An amount equal to the amount otherwise

allowed as a deduction in computing base income for

interest paid, accrued, or incurred, directly or

indirectly, (i) for taxable years ending on or after

December 31, 2004, to a foreign person who would be a

member of the same unitary business group but for the

fact the foreign person's business activity outside

the United States is 80% or more of the foreign

person's total business activity and (ii) for taxable

years ending on or after December 31, 2008, to a person

who would be a member of the same unitary business

group but for the fact that the person is prohibited

under Section 1501(a)(27) from being included in the

unitary business group because he or she is ordinarily

required to apportion business income under different

subsections of Section 304. The addition modification

required by this subparagraph shall be reduced to the

extent that dividends were included in base income of

the unitary group for the same taxable year and

received by the taxpayer or by a member of the

taxpayer's unitary business group (including amounts

included in gross income pursuant to Sections 951

through 964 of the Internal Revenue Code and amounts

included in gross income under Section 78 of the

Internal Revenue Code) with respect to the stock of

the same person to whom the interest was paid,

accrued, or incurred.

This paragraph shall not apply to the following:

(i) an item of interest paid, accrued, or

incurred, directly or indirectly, to a person who

is subject in a foreign country or state, other

than a state which requires mandatory unitary

reporting, to a tax on or measured by net income

with respect to such interest; or

(ii) an item of interest paid, accrued, or

incurred, directly or indirectly, to a person if

the taxpayer can establish, based on a

preponderance of the evidence, both of the

following:

(a) the person, during the same taxable

year, paid, accrued, or incurred, the interest

to a person that is not a related member, and

(b) the transaction giving rise to the

interest expense between the taxpayer and the

person did not have as a principal purpose the

avoidance of Illinois income tax, and is paid

pursuant to a contract or agreement that

reflects an arm's-length interest rate and

terms; or

(iii) the taxpayer can establish, based on

clear and convincing evidence, that the interest

paid, accrued, or incurred relates to a contract

or agreement entered into at arm's-length rates

and terms and the principal purpose for the

payment is not federal or Illinois tax avoidance;

or

(iv) an item of interest paid, accrued, or

incurred, directly or indirectly, to a person if

the taxpayer establishes by clear and convincing

evidence that the adjustments are unreasonable; or

if the taxpayer and the Director agree in writing

to the application or use of an alternative method

of apportionment under Section 304(f).

Nothing in this subsection shall preclude the

Director from making any other adjustment

otherwise allowed under Section 404 of this Act

for any tax year beginning after the effective

date of this amendment provided such adjustment is

made pursuant to regulation adopted by the

Department and such regulations provide methods

and standards by which the Department will utilize

its authority under Section 404 of this Act; and

(D-8) An amount equal to the amount of intangible

expenses and costs otherwise allowed as a deduction in

computing base income, and that were paid, accrued, or

incurred, directly or indirectly, (i) for taxable

years ending on or after December 31, 2004, to a

foreign person who would be a member of the same

unitary business group but for the fact that the

foreign person's business activity outside the United

States is 80% or more of that person's total business

activity and (ii) for taxable years ending on or after

December 31, 2008, to a person who would be a member of

the same unitary business group but for the fact that

the person is prohibited under Section 1501(a)(27)

from being included in the unitary business group

because he or she is ordinarily required to apportion

business income under different subsections of Section

304. The addition modification required by this

subparagraph shall be reduced to the extent that

dividends were included in base income of the unitary

group for the same taxable year and received by the

taxpayer or by a member of the taxpayer's unitary

business group (including amounts included in gross

income pursuant to Sections 951 through 964 of the

Internal Revenue Code and amounts included in gross

income under Section 78 of the Internal Revenue Code)

with respect to the stock of the same person to whom

the intangible expenses and costs were directly or

indirectly paid, incurred or accrued. The preceding

sentence shall not apply to the extent that the same

dividends caused a reduction to the addition

modification required under Section 203(d)(2)(D-7) of

this Act. As used in this subparagraph, the term

"intangible expenses and costs" includes (1) expenses,

losses, and costs for, or related to, the direct or

indirect acquisition, use, maintenance or management,

ownership, sale, exchange, or any other disposition of

intangible property; (2) losses incurred, directly or

indirectly, from factoring transactions or discounting

transactions; (3) royalty, patent, technical, and

copyright fees; (4) licensing fees; and (5) other

similar expenses and costs. For purposes of this

subparagraph, "intangible property" includes patents,

patent applications, trade names, trademarks, service

marks, copyrights, mask works, trade secrets, and

similar types of intangible assets;

This paragraph shall not apply to the following:

(i) any item of intangible expenses or costs

paid, accrued, or incurred, directly or

indirectly, from a transaction with a person who

is subject in a foreign country or state, other

than a state which requires mandatory unitary

reporting, to a tax on or measured by net income

with respect to such item; or

(ii) any item of intangible expense or cost

paid, accrued, or incurred, directly or

indirectly, if the taxpayer can establish, based

on a preponderance of the evidence, both of the

following:

(a) the person during the same taxable

year paid, accrued, or incurred, the

intangible expense or cost to a person that is

not a related member, and

(b) the transaction giving rise to the

intangible expense or cost between the

taxpayer and the person did not have as a

principal purpose the avoidance of Illinois

income tax, and is paid pursuant to a contract

or agreement that reflects arm's-length terms;

or

(iii) any item of intangible expense or cost

paid, accrued, or incurred, directly or

indirectly, from a transaction with a person if

the taxpayer establishes by clear and convincing

evidence, that the adjustments are unreasonable;

or if the taxpayer and the Director agree in

writing to the application or use of an

alternative method of apportionment under Section

304(f);

Nothing in this subsection shall preclude the

Director from making any other adjustment

otherwise allowed under Section 404 of this Act

for any tax year beginning after the effective

date of this amendment provided such adjustment is

made pursuant to regulation adopted by the

Department and such regulations provide methods

and standards by which the Department will utilize

its authority under Section 404 of this Act;

(D-9) For taxable years ending on or after

December 31, 2008, an amount equal to the amount of

insurance premium expenses and costs otherwise allowed

as a deduction in computing base income, and that were

paid, accrued, or incurred, directly or indirectly, to

a person who would be a member of the same unitary

business group but for the fact that the person is

prohibited under Section 1501(a)(27) from being

included in the unitary business group because he or

she is ordinarily required to apportion business

income under different subsections of Section 304. The

addition modification required by this subparagraph

shall be reduced to the extent that dividends were

included in base income of the unitary group for the

same taxable year and received by the taxpayer or by a

member of the taxpayer's unitary business group

(including amounts included in gross income under

Sections 951 through 964 of the Internal Revenue Code

and amounts included in gross income under Section 78

of the Internal Revenue Code) with respect to the

stock of the same person to whom the premiums and costs

were directly or indirectly paid, incurred, or

accrued. The preceding sentence does not apply to the

extent that the same dividends caused a reduction to

the addition modification required under Section

203(d)(2)(D-7) or Section 203(d)(2)(D-8) of this Act;

(D-10) An amount equal to the credit allowable to

the taxpayer under Section 218(a) of this Act,

determined without regard to Section 218(c) of this

Act;

(D-11) For taxable years ending on or after

December 31, 2017, an amount equal to the deduction

allowed under Section 199 of the Internal Revenue Code

for the taxable year;

and by deducting from the total so obtained the following

amounts:

(E) The valuation limitation amount;

(F) An amount equal to the amount of any tax

imposed by this Act which was refunded to the taxpayer

and included in such total for the taxable year;

(G) An amount equal to all amounts included in

taxable income as modified by subparagraphs (A), (B),

(C) and (D) which are exempt from taxation by this

State either by reason of its statutes or Constitution

or by reason of the Constitution, treaties or statutes

of the United States; provided that, in the case of any

statute of this State that exempts income derived from

bonds or other obligations from the tax imposed under

this Act, the amount exempted shall be the interest

net of bond premium amortization;

(H) Any income of the partnership which

constitutes personal service income as defined in

Section 1348(b)(1) of the Internal Revenue Code (as in

effect December 31, 1981) or a reasonable allowance

for compensation paid or accrued for services rendered

by partners to the partnership, whichever is greater;

this subparagraph (H) is exempt from the provisions of

Section 250;

(I) An amount equal to all amounts of income

distributable to an entity subject to the Personal

Property Tax Replacement Income Tax imposed by

subsections (c) and (d) of Section 201 of this Act

including amounts distributable to organizations

exempt from federal income tax by reason of Section

501(a) of the Internal Revenue Code; this subparagraph

(I) is exempt from the provisions of Section 250;

(J) With the exception of any amounts subtracted

under subparagraph (G), an amount equal to the sum of

all amounts disallowed as deductions by (i) Sections

171(a)(2) and 265(a)(2) of the Internal Revenue Code,

and all amounts of expenses allocable to interest and

disallowed as deductions by Section 265(a)(1) of the

Internal Revenue Code; and (ii) for taxable years

ending on or after August 13, 1999, Sections

171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the

Internal Revenue Code, plus, (iii) for taxable years

ending on or after December 31, 2011, Section

45G(e)(3) of the Internal Revenue Code and, for

taxable years ending on or after December 31, 2008,

any amount included in gross income under Section 87

of the Internal Revenue Code; the provisions of this

subparagraph are exempt from the provisions of Section

250;

(K) An amount equal to those dividends included in

such total which were paid by a corporation which

conducts business operations in a River Edge

Redevelopment Zone or zones created under the River

Edge Redevelopment Zone Act and conducts substantially

all of its operations from a River Edge Redevelopment

Zone or zones. This subparagraph (K) is exempt from

the provisions of Section 250;

(L) An amount equal to any contribution made to a

job training project established pursuant to the Real

Property Tax Increment Allocation Redevelopment Act;

(M) An amount equal to those dividends included in

such total that were paid by a corporation that

conducts business operations in a federally designated

Foreign Trade Zone or Sub-Zone and that is designated

a High Impact Business located in Illinois; provided

that dividends eligible for the deduction provided in

subparagraph (K) of paragraph (2) of this subsection

shall not be eligible for the deduction provided under

this subparagraph (M);

(N) An amount equal to the amount of the deduction

used to compute the federal income tax credit for

restoration of substantial amounts held under claim of

right for the taxable year pursuant to Section 1341 of

the Internal Revenue Code;

(O) For taxable years 2001 and thereafter, for the

taxable year in which the bonus depreciation deduction

is taken on the taxpayer's federal income tax return

under subsection (k) of Section 168 of the Internal

Revenue Code and for each applicable taxable year

thereafter, an amount equal to "x", where:

(1) "y" equals the amount of the depreciation

deduction taken for the taxable year on the

taxpayer's federal income tax return on property

for which the bonus depreciation deduction was

taken in any year under subsection (k) of Section

168 of the Internal Revenue Code, but not

including the bonus depreciation deduction;

(2) for taxable years ending on or before

December 31, 2005, "x" equals "y" multiplied by 30

and then divided by 70 (or "y" multiplied by

0.429); and

(3) for taxable years ending after December

31, 2005:

(i) for property on which a bonus

depreciation deduction of 30% of the adjusted

basis was taken, "x" equals "y" multiplied by

30 and then divided by 70 (or "y" multiplied

by 0.429);

(ii) for property on which a bonus

depreciation deduction of 50% of the adjusted

basis was taken, "x" equals "y" multiplied by

1.0;

(iii) for property on which a bonus

depreciation deduction of 100% of the adjusted

basis was taken in a taxable year ending on or

after December 31, 2021, "x" equals the

depreciation deduction that would be allowed

on that property if the taxpayer had made the

election under Section 168(k)(7) of the

Internal Revenue Code to not claim bonus

depreciation on that property; and

(iv) for property on which a bonus

depreciation deduction of a percentage other

than 30%, 50% or 100% of the adjusted basis

was taken in a taxable year ending on or after

December 31, 2021, "x" equals "y" multiplied

by 100 times the percentage bonus depreciation

on the property (that is, 100(bonus%)) and

then divided by 100 times 1 minus the

percentage bonus depreciation on the property

(that is, 100(1-bonus%)).

The aggregate amount deducted under this

subparagraph in all taxable years for any one piece of

property may not exceed the amount of the bonus

depreciation deduction taken on that property on the

taxpayer's federal income tax return under subsection

(k) of Section 168 of the Internal Revenue Code. This

subparagraph (O) is exempt from the provisions of

Section 250;

(P) If the taxpayer sells, transfers, abandons, or

otherwise disposes of property for which the taxpayer

was required in any taxable year to make an addition

modification under subparagraph (D-5), then an amount

equal to that addition modification.

If the taxpayer continues to own property through

the last day of the last tax year for which a

subtraction is allowed with respect to that property

under subparagraph (O) and for which the taxpayer was

required in any taxable year to make an addition

modification under subparagraph (D-5), then an amount

equal to that addition modification.

The taxpayer is allowed to take the deduction

under this subparagraph only once with respect to any

one piece of property.

This subparagraph (P) is exempt from the

provisions of Section 250;

(Q) The amount of (i) any interest income (net of

the deductions allocable thereto) taken into account

for the taxable year with respect to a transaction

with a taxpayer that is required to make an addition

modification with respect to such transaction under

Section 203(a)(2)(D-17), 203(b)(2)(E-12),

203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed

the amount of such addition modification and (ii) any

income from intangible property (net of the deductions

allocable thereto) taken into account for the taxable

year with respect to a transaction with a taxpayer

that is required to make an addition modification with

respect to such transaction under Section

203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or

203(d)(2)(D-8), but not to exceed the amount of such

addition modification. This subparagraph (Q) is exempt

from Section 250;

(R) An amount equal to the interest income taken

into account for the taxable year (net of the

deductions allocable thereto) with respect to

transactions with (i) a foreign person who would be a

member of the taxpayer's unitary business group but

for the fact that the foreign person's business

activity outside the United States is 80% or more of

that person's total business activity and (ii) for

taxable years ending on or after December 31, 2008, to

a person who would be a member of the same unitary

business group but for the fact that the person is

prohibited under Section 1501(a)(27) from being

included in the unitary business group because he or

she is ordinarily required to apportion business

income under different subsections of Section 304, but

not to exceed the addition modification required to be

made for the same taxable year under Section

203(d)(2)(D-7) for interest paid, accrued, or

incurred, directly or indirectly, to the same person.

This subparagraph (R) is exempt from Section 250;

(S) An amount equal to the income from intangible

property taken into account for the taxable year (net

of the deductions allocable thereto) with respect to

transactions with (i) a foreign person who would be a

member of the taxpayer's unitary business group but

for the fact that the foreign person's business

activity outside the United States is 80% or more of

that person's total business activity and (ii) for

taxable years ending on or after December 31, 2008, to

a person who would be a member of the same unitary

business group but for the fact that the person is

prohibited under Section 1501(a)(27) from being

included in the unitary business group because he or

she is ordinarily required to apportion business

income under different subsections of Section 304, but

not to exceed the addition modification required to be

made for the same taxable year under Section

203(d)(2)(D-8) for intangible expenses and costs paid,

accrued, or incurred, directly or indirectly, to the

same person. This subparagraph (S) is exempt from

Section 250;

(T) For taxable years ending on or after December

31, 2011, in the case of a taxpayer who was required to

add back any insurance premiums under Section

203(d)(2)(D-9), such taxpayer may elect to subtract

that part of a reimbursement received from the

insurance company equal to the amount of the expense

or loss (including expenses incurred by the insurance

company) that would have been taken into account as a

deduction for federal income tax purposes if the

expense or loss had been uninsured. If a taxpayer

makes the election provided for by this subparagraph

(T), the insurer to which the premiums were paid must

add back to income the amount subtracted by the

taxpayer pursuant to this subparagraph (T). This

subparagraph (T) is exempt from the provisions of

Section 250; and

(U) For taxable years beginning on or after

January 1, 2023, for any cannabis establishment

operating in this State and licensed under the

Cannabis Regulation and Tax Act or any cannabis

cultivation center or medical cannabis dispensing

organization operating in this State and licensed

under the Compassionate Use of Medical Cannabis

Program Act, an amount equal to the deductions that

were disallowed under Section 280E of the Internal

Revenue Code for the taxable year and that would not be

added back under this subsection. The provisions of

this subparagraph (U) are exempt from the provisions

of Section 250.

(e) Gross income; adjusted gross income; taxable income.

(1) In general. Subject to the provisions of paragraph

(2) and subsection (b)(3), for purposes of this Section

and Section 803(e), a taxpayer's gross income, adjusted

gross income, or taxable income for the taxable year shall

mean the amount of gross income, adjusted gross income or

taxable income properly reportable for federal income tax

purposes for the taxable year under the provisions of the

Internal Revenue Code. Taxable income may be less than

zero. However, for taxable years ending on or after

December 31, 1986, net operating loss carryforwards from

taxable years ending prior to December 31, 1986, may not

exceed the sum of federal taxable income for the taxable

year before net operating loss deduction, plus the excess

of addition modifications over subtraction modifications

for the taxable year. For taxable years ending prior to

December 31, 1986, taxable income may never be an amount

in excess of the net operating loss for the taxable year as

defined in subsections (c) and (d) of Section 172 of the

Internal Revenue Code, provided that when taxable income

of a corporation (other than a Subchapter S corporation),

trust, or estate is less than zero and addition

modifications, other than those provided by subparagraph

(E) of paragraph (2) of subsection (b) for corporations or

subparagraph (E) of paragraph (2) of subsection (c) for

trusts and estates, exceed subtraction modifications, an

addition modification must be made under those

subparagraphs for any other taxable year to which the

taxable income less than zero (net operating loss) is

applied under Section 172 of the Internal Revenue Code or

under subparagraph (E) of paragraph (2) of this subsection

(e) applied in conjunction with Section 172 of the

Internal Revenue Code.

(2) Special rule. For purposes of paragraph (1) of

this subsection, the taxable income properly reportable

for federal income tax purposes shall mean:

(A) Certain life insurance companies. In the case

of a life insurance company subject to the tax imposed

by Section 801 of the Internal Revenue Code, life

insurance company taxable income, plus the amount of

distribution from pre-1984 policyholder surplus

accounts as calculated under Section 815a of the

Internal Revenue Code;

(B) Certain other insurance companies. In the case

of mutual insurance companies subject to the tax

imposed by Section 831 of the Internal Revenue Code,

insurance company taxable income;

(C) Regulated investment companies. In the case of

a regulated investment company subject to the tax

imposed by Section 852 of the Internal Revenue Code,

investment company taxable income;

(D) Real estate investment trusts. In the case of

a real estate investment trust subject to the tax

imposed by Section 857 of the Internal Revenue Code,

real estate investment trust taxable income;

(E) Consolidated corporations. In the case of a

corporation which is a member of an affiliated group

of corporations filing a consolidated income tax

return for the taxable year for federal income tax

purposes, taxable income determined as if such

corporation had filed a separate return for federal

income tax purposes for the taxable year and each

preceding taxable year for which it was a member of an

affiliated group. For purposes of this subparagraph,

the taxpayer's separate taxable income shall be

determined as if the election provided by Section

243(b)(2) of the Internal Revenue Code had been in

effect for all such years;

(F) Cooperatives. In the case of a cooperative

corporation or association, the taxable income of such

organization determined in accordance with the

provisions of Section 1381 through 1388 of the

Internal Revenue Code, but without regard to the

prohibition against offsetting losses from patronage

activities against income from nonpatronage

activities; except that a cooperative corporation or

association may make an election to follow its federal

income tax treatment of patronage losses and

nonpatronage losses. In the event such election is

made, such losses shall be computed and carried over

in a manner consistent with subsection (a) of Section

207 of this Act and apportioned by the apportionment

factor reported by the cooperative on its Illinois

income tax return filed for the taxable year in which

the losses are incurred. The election shall be

effective for all taxable years with original returns

due on or after the date of the election. In addition,

the cooperative may file an amended return or returns,

as allowed under this Act, to provide that the

election shall be effective for losses incurred or

carried forward for taxable years occurring prior to

the date of the election. Once made, the election may

only be revoked upon approval of the Director. The

Department shall adopt rules setting forth

requirements for documenting the elections and any

resulting Illinois net loss and the standards to be

used by the Director in evaluating requests to revoke

elections. Public Act 96-932 is declaratory of

existing law;

(G) Subchapter S corporations. In the case of: (i)

a Subchapter S corporation for which there is in

effect an election for the taxable year under Section

1362 of the Internal Revenue Code, the taxable income

of such corporation determined in accordance with

Section 1363(b) of the Internal Revenue Code, except

that taxable income shall take into account those

items which are required by Section 1363(b)(1) of the

Internal Revenue Code to be separately stated; and

(ii) a Subchapter S corporation for which there is in

effect a federal election to opt out of the provisions

of the Subchapter S Revision Act of 1982 and have

applied instead the prior federal Subchapter S rules

as in effect on July 1, 1982, the taxable income of

such corporation determined in accordance with the

federal Subchapter S rules as in effect on July 1,

1982; and

(H) Partnerships. In the case of a partnership,

taxable income determined in accordance with Section

703 of the Internal Revenue Code, except that taxable

income shall take into account those items which are

required by Section 703(a)(1) to be separately stated

but which would be taken into account by an individual

in calculating his taxable income.

(3) Recapture of business expenses on disposition of

asset or business. Notwithstanding any other law to the

contrary, if in prior years income from an asset or

business has been classified as business income and in a

later year is demonstrated to be non-business income, then

all expenses, without limitation, deducted in such later

year and in the 2 immediately preceding taxable years

related to that asset or business that generated the

non-business income shall be added back and recaptured as

business income in the year of the disposition of the

asset or business. Such amount shall be apportioned to

Illinois using the greater of the apportionment fraction

computed for the business under Section 304 of this Act

for the taxable year or the average of the apportionment

fractions computed for the business under Section 304 of

this Act for the taxable year and for the 2 immediately

preceding taxable years.

(f) Valuation limitation amount.

(1) In general. The valuation limitation amount

referred to in subsections (a)(2)(G), (c)(2)(I) and

(d)(2)(E) is an amount equal to:

(A) The sum of the pre-August 1, 1969 appreciation

amounts (to the extent consisting of gain reportable

under the provisions of Section 1245 or 1250 of the

Internal Revenue Code) for all property in respect of

which such gain was reported for the taxable year;

plus

(B) The lesser of (i) the sum of the pre-August 1,

1969 appreciation amounts (to the extent consisting of

capital gain) for all property in respect of which

such gain was reported for federal income tax purposes

for the taxable year, or (ii) the net capital gain for

the taxable year, reduced in either case by any amount

of such gain included in the amount determined under

subsection (a)(2)(F) or (c)(2)(H).

(2) Pre-August 1, 1969 appreciation amount.

(A) If the fair market value of property referred

to in paragraph (1) was readily ascertainable on

August 1, 1969, the pre-August 1, 1969 appreciation

amount for such property is the lesser of (i) the

excess of such fair market value over the taxpayer's

basis (for determining gain) for such property on that

date (determined under the Internal Revenue Code as in

effect on that date), or (ii) the total gain realized

and reportable for federal income tax purposes in

respect of the sale, exchange or other disposition of

such property.

(B) If the fair market value of property referred

to in paragraph (1) was not readily ascertainable on

August 1, 1969, the pre-August 1, 1969 appreciation

amount for such property is that amount which bears

the same ratio to the total gain reported in respect of

the property for federal income tax purposes for the

taxable year, as the number of full calendar months in

that part of the taxpayer's holding period for the

property ending July 31, 1969 bears to the number of

full calendar months in the taxpayer's entire holding

period for the property.

(C) The Department shall prescribe such

regulations as may be necessary to carry out the

purposes of this paragraph.

(g) Double deductions. Unless specifically provided

otherwise, nothing in this Section shall permit the same item

to be deducted more than once.

(h) Legislative intention. Except as expressly provided by

this Section there shall be no modifications or limitations on

the amounts of income, gain, loss or deduction taken into

account in determining gross income, adjusted gross income or

taxable income for federal income tax purposes for the taxable

year, or in the amount of such items entering into the

computation of base income and net income under this Act for

such taxable year, whether in respect of property values as of

August 1, 1969 or otherwise.

(Source: P.A. 102-16, eff. 6-17-21; 102-558, eff. 8-20-21;

102-658, eff. 8-27-21; 102-813, eff. 5-13-22; 102-1112, eff.

12-21-22; 103-8, eff. 6-7-23; 103-478, eff. 1-1-24; revised

9-26-23.)