Illinois Department of Revenue

        2023 Schedule M Instructions (for businesses) 

General Information
What is the purpose of Schedule M?
Schedule M, Other Additions and Subtractions, allows you to figure the total amount of “other additions and subtractions” you 
must include on 
   Form IL-1120, Corporation Income and Replacement Tax Return, Line 8 and Line 21, 
   Form IL-1120-ST, Small Business Corporation Replacement Tax Return, Line 21 and Line 33,  
   Form IL-1065, Partnership Replacement Tax Return, Line 22 and Line 33, or
   Form IL-1041, Fiduciary Income and Replacement Tax Return, Line 10 and Line 24.

What must I attach?
If you claim an amount on the “other additions” or “other subtractions” lines of your tax return, you must attach a completed 
Schedule M to that return.

Should I round?
You must round the dollar amounts on Schedule M to whole-dollar amounts. To do this, you should drop any amount less than 
50 cents and increase any amount of 50 cents or more to the next higher dollar.

What if I need additional assistance or forms?
• For assistance, forms, or schedules, visit our website at tax.illinois.gov or scan the QR code 
  provided.
•  Write us at: 
  ILLINOIS DEPARTMENT OF REVENUE
  PO BOX 19001
  SPRINGFIELD IL  62794-9001
•  Call 1 800 732-8866 or 217 782-3336 (TTY at 1 800 544-5304).
• Visit a taxpayer assistance office - 8:00 a.m. to 5:00 p.m. (Springfield office) and 8:30 a.m. to  
  5:00 p.m. (all other offices), Monday through Friday.

Specific Instructions 
Do not use negative figures on this schedule. 
If a specific line is not referenced, follow the instructions on the form.
Step 1:  Provide the following information
Enter your name and entire FEIN as shown on your tax return. 
Note: A partial FEIN will delay the processing of your return. 

Step 2:  Figure your additions 
Line 1 — Capital gain taxed under IRC Section 852(b)(3) — Enter the amount of any capital gain that you were allowed to 
deduct federally under IRC Section 852(b)(3).
Line 2 — Notes, bonds, debentures, or obligations issued by the Governments of American Samoa, Guam, 
the Northern Mariana Islands, Puerto Rico, or the Virgin Islands — Enter the amount of interest from any of 
these governmental obligations that you own directly that is not included on Form IL-1120 or Form IL-1041, Line 1, or 
Form IL-1120-ST or Form IL-1065, Line 13.
Line 3 — Lloyd’s plan of operation loss — Add back any loss that you included in your federal taxable income from a Lloyd’s 
plan of operation if that loss was reported on your behalf on Form IL-1065, Partnership Replacement Tax Return.
 Line 4 — Business expense recapture — If you reported income from an asset or activity as business income in prior years, 
and reported any income from that asset or activity as nonbusiness income on Illinois Schedule NB, Nonbusiness Income, 
or Illinois Schedule NR (Form IL-1041), Nonresident Computation of Fiduciary Income, for this year, include on this line all 
deductions you claimed for expenses connected with that income in this year and in your two most recent years.

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 Line 5 — Any other state’s income tax deducted from federal taxable income (Form IL-1041 filers only) — If you are 
claiming a credit for tax paid to other states on Illinois Schedule CR (Form IL-1041), Credit for Tax Paid to Other States, you 
must add back the entire amount of that state’s income tax deducted from federal taxable income. If you are not claiming a 
credit on Illinois Schedule CR for a particular state, do not include that state’s tax amounts on this line.
Line 6 — Capital loss to be carried forward (Form IL-1041 filers only) — Add back the smaller of 
   any capital loss on your federal Form 1041, Line 4 that you may carry forward; or
   any negative amount on your federal Form 1041, Line 23.
 Line 7 — Student-Assistance Contribution Credit — 
If you claimed a credit on Schedule 1299-A, Tax Subtractions and Credits (for partnerships and S corporations), or 
Schedule 1299-D, Income Tax Credits (for corporations and fiduciaries), for contributions you made to a college savings plan 
on behalf of an employee, enter the amount of the Student-Assistance Contribution Credit (Credit Code 5420) earned in the 
current year from Schedule 1299-A, Step 3, Column E or Schedule 1299-D, Step 3, Column F, here.  
Note: Do not include any carryover amount on this line. 
 Line 8 — Dividends paid by a captive REIT — If you are a captive real estate investment trust (REIT), enter the amount of 
the deduction for dividends paid that you claimed on your federal Form 1120-REIT, Line 22b. You are a captive REIT if more 
than 50 percent of the value or voting power of your shares was owned directly or indirectly by a single corporation, unless that 
corporation is:
   a REIT that is not a captive REIT,
   exempt from tax under IRC Section 501 and is not required to treat the dividends it receives from you as unrelated business 
  taxable income,
   a listed Australian property trust that is not a captive REIT under these rules, or
   a foreign corporation or entity that would be treated as a REIT if it were incorporated in and doing business in the U.S. and 
  that would not be treated as a captive REIT under these rules.
Line 9 — Deduction allowed under IRC Section 250(a)(1)(A) (Form IL-1120 filers only.) Add back the deduction allowed 
under IRC Section 250(a)(1)(A) as reported on federal Form 8993, Line 28. 
Line 10 — Other additions — Include any other amounts that you are required to add to your federal taxable income to 
arrive at your Illinois base income. For tax years ending on or after June 30, 2021, Form IL-1120 filers must add back amounts 
deducted federally under 
• IRC Section 250(a)(1)(B)(i), 
• IRC Section 245A(a), and 
• IRC Section 243(e). 
Note: These amounts qualify for the foreign dividend subtraction modification on Schedule J, Foreign Dividends. 
Please include a detailed description of each addition on the line provided or on an attached statement. 
Note: To avoid common errors when completing this schedule do not include any special depreciation calculated on Form 
IL-4562, Special Depreciation; or any distributive share of income shown on Illinois Schedule K-1-P, Partner’s or Shareholder’s 
Share of Income, Deductions, Credits, and Recapture; or Illinois Schedule K-1-T, Beneficiary’s Share of Income and 
Deductions. These amounts are reported directly on your Illinois tax return.
Line 11 — Total additions — Add Lines 1 through 10. Enter the amount here and on your Form IL-1120, Line 8, 
Form IL-1120-ST, Line 21, Form IL-1065, Line 22 or Form IL-1041, Line 10. 
Note: The sum of the amounts you report on Form IL-1041, Line 10, columns A and B should match the total amount reported 
on Illinois Schedule M, Line 11.

Step 3:  Figure your subtractions 
Line 12 — Exempt interest dividends paid by regulated investment companies — Enter the amount of exempt interest 
dividends you paid under IRC Section 852(b)(5) (regulated investment companies only).
Line 13 — Notes, bonds, debentures, or obligations issued by the Governments of American Samoa, Guam, the 
Northern Mariana Islands, Puerto Rico, or the Virgin Islands — You may subtract these items only to the extent that you 
were required to add them to federal taxable income on this Illinois Schedule M, Line 2.
Line 14 —  Lloyd’s plan of operation income if reported on your behalf on Form IL-1065 — Enter the income included in 
your taxable income from a Lloyd’s plan of operation if that amount was reported on your behalf on Form IL-1065, Partnership 
Replacement Tax Return.
Line 15 — Restoration of amounts held under claim of right — Enter the amount equal to the deduction used to compute 
the federal tax credit for restoration of amounts held under claim of right under IRC Section 1341.
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Lines 16a through 16g — Expenses of federally tax-exempt income and federal credits — 
Enter the amount
 of any expenses that were disallowed as federal deductions because the income was exempt from federal tax or because a 
 credit was allowed under IRC Sections 45G(e)(3), 171(a)(2), 265, 280C, 291(a)(3), 807(a)(2)(B), 807(b)(1)(B), or 832(b)(5)
 (B)(i).
 included in your adjusted gross income under IRC Section 87.
Lines 20a through 20y — Securities exempt from Illinois tax — Enter the amount of interest on obligations of Illinois 
state and local governments only if included in your Illinois income, Form IL-1120, Line 9; Form IL-1120-ST, Line 22; 
Form IL-1065, Line 23; or Form IL-1041, Line 11. This amount is the amount net of any related bond premium amortization. 
  Interest from state and local government obligations is not exempt from Illinois Income Tax unless legislation has been 
specifically adopted to provide for an exemption. Income from these obligations may be subtracted only if you own the 
securities directly and not through mutual funds.
Note: Attach a copy of the statement that identifies the payer and the amount of interest for each obligation.
Use the correct line to identify your amounts for the following securities.
  Illinois Housing Development Authority bonds and notes (except housing-related commercial facilities bonds and notes) 
 Illinois Development Finance Authority bonds, notes, and other evidence of obligations (only venture fund and infrastructure 
 bonds)
  Illinois Sports Facilities Authority bonds
 Illinois Development Finance Authority bonds issued under the Illinois Development Finance Authority Act, Sections 
 7.80 - 7.87   
  Illinois Development Finance Authority bonds or Illinois Finance Authority bonds issued under the Asbestos Abatement 
 Finance Act 
 Bonds issued by the Illinois Finance Authority under the Illinois Finance Authority Act
  Southwestern Illinois Development Authority bonds
 Illinois Power Agency bonds issued by the Illinois Finance Authority under Other Powers Article in the Illinois Finance 
 Authority Act
  Central Illinois Economic Development Authority bonds issued under the Central Illinois Economic Development Authority 
 Act
 Eastern Illinois Economic Development Authority bonds issued under the Eastern Illinois Economic Development Authority 
 Act
 Southeastern Illinois Economic Development Authority bonds issued under the Southeastern Illinois Economic Development 
 Authority Act
  Southern Illinois Economic Development Authority bonds issued under the Southern Illinois Economic Development 
 Authority Act
 Illinois Urban Development Authority bonds issued under the Illinois Urban Development Authority Act
  Downstate Illinois Sports Facilities Authority bonds issued under the Downstate Illinois Sports Facilities Authority Act
  Western Illinois Economic Development Authority bonds issued under the Western Illinois Economic Development Authority 
 Bonds Act
  Upper Illinois River Valley Development Authority bonds issued under the Upper Illinois River Valley Development Authority 
 Act
  Will-Kankakee Regional Development Authority bonds issued under the Will-Kankakee Regional Development Authority Law
  Tri-County River Valley Development Authority bonds issued under the Tri-County River Valley Development Authority Law
  Quad Cities Regional Economic Development Authority bonds and notes (if declared to be exempt from taxation by the 
 Authority)
  Quad Cities Interstate Metropolitan Authority bonds 
  Rural Bond Bank Act bonds and notes
  Bonds issued under the Export Development Act of 1983
  College savings bonds issued under the General Obligation Bond Act in accordance with the Baccalaureate Savings Act
  Bonds issued by the New Harmony Bridge Authority - Note: For tax years beginning on or after August 19, 2023, the bonds 
 issued by the New Harmony Bridge Authority are no longer eligible for income exemption.
  Bonds issued by the New Harmony Bridge Bi-State Commission - Note: For tax years beginning on or after August 19, 2023, 
 the bonds issued by the New Harmony Bridge Bi-State Commission are no longer eligible for income exemption.

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Line 24 — Federally taxed Illinois state refund from prior years — Enter the amount of refund of Illinois income and 
replacement tax that you received for a prior year, to the extent that it is included in your federal ordinary income. If you 
reported a negative expense for Illinois income and replacement tax this year because of an over-accrued liability at the 
beginning of the year, enter the amount on this line.
Line 25 — Dividends received, including IRC Section 78 Foreign Dividend Gross-up and subpart F income 
(Form IL-1120-ST filers only) — Complete a pro forma federal Form 1120, Schedule C, and Illinois Schedule J, Foreign 
Dividends, to figure the amount of dividends received from a foreign corporation, foreign dividend gross-up and subpart F 
income, that you are entitled to subtract. 
S corporations do not pass-through the foreign dividend subtraction to their shareholders, therefore, do not include an amount 
reported on this line on Schedule K-1-P, Line 47.
Line 26 — Contributions made to a job training project  
  Form IL-1120-ST and IL-1065 filers — Enter the amount of contributions you made under the Tax Increment Allocation 
 Redevelopment Act to a job training project. For more information, see FY Bulletin 1990-40.
  Form IL-1120 and IL-1041 filers — Do not enter anything on this line. These amounts are reported directly on your Illinois 
 tax return.
Line 27 — Reparations or other amounts received as a victim of persecution by Nazi Germany (Form IL-1041 filers 
only) — Enter the amount of reparations or other amounts received as a victim of persecution for racial or religious reasons by 
Nazi Germany or any other Axis regime that are included in your federal taxable income. Also include any reparations or other 
amounts received as an heir of such victim that are included in your federal taxable income.
Line 28 — Income eligible for a deduction by an attorney-in-fact under IRC Section 835 — If you are the attorney-in-fact 
for an inter-insurer or reciprocal insurer that has elected under IRC Section 835 to include profits made from business in its 
federal taxable income, you may subtract the amount of your federal taxable income that is being taxed to the inter-insurer or 
reciprocal insurer.
Line 29 — Income from Illinois pre-need funeral, burial, and cemetery trusts — Enter the amount of income earned by 
trust accounts established under the Illinois Pre-Need Cemetery Sales Act or the Illinois Funeral or Burial Funds Act, to the 
extent that it is included in your federal taxable income.
Line 30 — Nuclear decommissioning trusts established under Section 8-508.1 of the Public Utilities Act — Enter the 
amount of income included in your federal taxable income from a fiduciary account, separate from all other accounts and assets 
of the public utility establishing the trust, in a bank or other financial institution established to hold the decommissioning funds 
provided by the Public Utilities Act for the eventual purpose of paying decommissioning costs.
Line 31 — Recovery of items by a decedent (Form IL-1041 estate filers only) — If you are an estate, enter the amount 
of any recovery included in your federal taxable income of an itemized deduction claimed by a decedent on his or her federal 
Form 1040, Schedule A, in a prior year. Include refunds of state income taxes other than Illinois income tax refunds subtracted 
on Schedule M, Line 24.
Line 32 — Recovery of other state refunds (Form IL-1041 filers only) — If you are a trust or an estate, enter the amount 
included in your federal taxable income for any state income tax refunds from tax years in which you claimed a credit for other 
states’ income taxes on Schedule CR, Credit for Taxes Paid to Other States, and added back the federal deductions for those 
taxes on Schedule M, Line 5.
Line 33 — Excess business loss disallowed by IRC Section 461(l)(1)(B)(Form IL-1041 filers only) — For taxable years 
beginning after December 31, 2018 and before January 1, 2026, enter the amount of excess business loss of the taxpayer 
disallowed as a deduction by IRC Section 461(l)(1)(B) as reported on federal Form 461, Line 16. 
Line 34 — Unused patronage or nonpatronage loss amounts from Schedule INL (Form IL-1120 filers only) —       
If you have 
 “unused patronage loss” on federal Form 1120-C, U.S. Income Tax Return for Cooperative Associations, Schedule G, 
 Line 12, or
 “unused nonpatronage loss” on federal Form 1120-C, Schedule G, Line 13, for this taxable year or for any succeeding tax 
 year,
and you marked the Box 1a election on your Schedule INL, enter the total loss amount as a positive amount on Schedule M, 
Line 34. You must identify the year in which you first made the Box 1a election on your Schedule INL. For example, if you first 
made the Box 1a election on your 2010 Schedule INL, identify that amount as “2010” on your Schedule M, Line 34. 

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Line 35 — Deductions for cannabis establishments disallowed under IRC Section 280E — Enter the amount of 
deductions disallowed federally under Section 280E of the Internal Revenue Code for this taxable year and not added back 
under IITA Section 203.  You may claim this amount if you are a cannabis establishment operating in Illinois and licensed under 
the Cannabis Regulation and Tax Act or a cannabis cultivation center or medical cannabis dispensing organization operating in 
Illinois and licensed under the Compassionate Use of Medical Cannabis Program Act. Attach a pro-forma federal tax return that 
reflects the recalculated federal income as if the disallowed federal exemptions and deductions were allowed. Also include any 
supporting financial statements and a detailed explanation of the deductions claimed on this line.
Line 36 — Do not use this line. This line is reserved for future use.
Line 37 — Do not use this line. This line is reserved for future use.
Line 38 — Do not use this line. This line is reserved for future use.
Line 39 — Eligible subtractions from Publication 101 — Enter any other amounts not subtracted elsewhere, that you are 
entitled to subtract from your income to arrive at your Illinois base income. You may not subtract anything on this line unless 
instructed to do so by the Illinois Department of Revenue. Please include a detailed description of each subtraction on the line 
provided or on an attached statement.
Note: To avoid common errors when completing this schedule do not include any special depreciation calculated on Illinois 
Schedule 4562, any distributive share of income shown on Illinois Schedule K-1-P or Illinois Schedule K-1-T, or any amount 
calculated on Schedule 80/20, Related Party Expenses, or Schedule 1299-B, River Edge Redevelopment Zone or Foreign 
Trade Zone (or sub-zone) Subtractions. Form IL-1120 filers may not include amounts from Illinois Schedule J. These amounts 
are reported directly on your Illinois tax return.
Unitary filers only — If 
•  you attached a Schedule UB, Combined Apportionment for Unitary Business Group, to your return which includes a 
partnership, or 
•  you are a unitary partnership required to file a Schedule UB, 
the subtraction modifications for August 1, 1969, valuation limitation amounts on Form IL-1065, Line 25, and personal service 
income or reasonable allowance for compensation of partners on Form IL-1065, Line 26, should be zero. These subtraction 
modifications for all partnerships included on the Schedule UB are included in the “other subtractions” on Schedule UB, Step 
3, Column E, Line 21, and so included in Line 39 of the Schedule M. If you claim either modification on Schedule M, Line 39, 
identify them as “August 1, 1969, valuation limitation amounts from a partnership included on Schedule UB,” or “personal 
service income or reasonable allowance for compensation of partners from a partnership included on Schedule UB,” as 
applicable.
Line 40 — Total subtractions — Add Lines 23 through 39. Enter the amount here and on Form IL-1120, Line 21, 
Form IL-1120-ST, Line 33, Form IL-1065, Line 33, or Form IL-1041, Line 24. 
Note: The sum of the amounts you report on Form IL-1041, Line 24, columns A and B should match the total amount reported 
on Illinois Schedule M, Line 40.

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