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Illinois Department of Revenue

2022 Schedule M IL-1040 Instructions

General Information
What is the purpose of Schedule M? income received from Social Security benefits and retirement
Schedule M, Other Additions and Subtractions for Individuals, allows plans (including Illinois Teacher’s Retirement). Eligible retirement
you to figure the total amount of additions you must include on Form income should be subtracted on Form IL-1040, Line 5.
IL-1040, Individual Income Tax Return, Line 3 and subtractions you
What must I attach to Form IL-1040?
may claim on Form IL-1040, Line 7.
If you enter an amount on Form IL-1040, Line 3 or Line 7, you must
May I subtract my out-of-state income? attach Schedule M and any other required documentation listed in
No, you may not subtract your out-of-state income. However, if you the “Step-by-Step Instructions” of this schedule to your Form IL-1040.
are filing as a resident or a part-year resident, you may be allowed
to take a credit against Illinois Income Tax for income tax you paid If you must attach Schedule K-1-P or K-1-T, be sure to attach
to another state. See the instructions for Form IL-1040, Line 15, and the Illinois schedule not the federal Schedule K-1 or any worksheets.
Schedule CR, Credit for Tax Paid to Other States. What if I need additional assistance or forms?
What other income is not allowed as a subtraction?
You may not subtract anything that is not listed on Schedule M. For Visit our website at tax.illinois.gov for assistance, forms or
example, you may not subtract schedules.
unemployment compensation. Unemployment compensation Write us at Illinois Department of Revenue, P.O. Box 19001,
included in your federal adjusted gross income, except railroad Springfield, Illinois 62794-9001.
unemployment, is fully taxable to Illinois. Call 1 800 732-8866 or 217 782-3336 (TDD, telecommunications
gambling losses. Illinois does not allow a deduction device for the deaf, at 1 800 544-5304).
for gambling losses. Visit a taxpayer assistance office - 8:00 a.m. to 5:00 p.m.
your federal itemized deductions from federal Form 1040 or (Springfield office) and 8:30 a.m. to 5:00 p.m. (all other offices),
1040-SR, Schedule A, Itemized Deductions. Monday through Friday.
any wages reported on your federal return. If you believe the
wages reported on the Form W-2, Wage and Tax Statement,
you received from your employer are incorrect, you must
obtain a corrected Form W-2 or a statement from your
employer, on company letterhead, stating that your Form W-2
was incorrect. We will not accept a letter from you or your tax
preparer.

Step-by-Step Instructions

Step 1: Provide the following information Line 3 — Lloyd’s plan of operation loss
Enter your name and Social Security number as shown on your Add back any loss that you included in your adjusted gross income
Form IL-1040. from a Lloyd’s plan of operation if that loss was reported on your
Step 2: Figure your additions for Form IL-1040, Line 3 behalf on Form IL-1065, Partnership Replacement Tax Return.
Enter your additions as positive amounts only. Line 4 — IRC Section 529 college savings, tuition, and ABLE
programs earnings
Line 1 — Your child’s federally tax-exempt interest and
dividend income Include earnings distributed from Internal Revenue Code (IRC)
Section 529 college savings and tuition programs and ABLE
Enter the amount of any federally tax-exempt interest and dividends accounts, if these earnings are not included in your adjusted gross
earned by your child if you elected to report your child’s interest and
income on Form IL-1040, Line 1.
dividend income on federal Form 8814, Parents’ Election To Report
Child’s Interest and Dividends. Do not include earnings if they were rolled over tax-free into
Line 2 — Distributive share of additions from a partnership, another program.
S corporation, trust, or estate Also, do not include earnings received from the following, which are
Include your distributive share of additions received from a exempt from tax:
partnership, S corporation, trust, or estate shown in Column A “Bright Start” College Savings Pool
on your Schedule K-1-P or K-1-T. The partnership, S corporation, “Bright Directions” College Savings Pool
trust, or estate is required to notify you of your share of this type of
income. An Illinois entity will send you a Schedule K-1-P, Partner’s or “College Illinois” Prepaid Tuition Program
Shareholder’s Share of Income, Deductions, Credits, and Recapture, Qualified IRC Section 529 tuition programs that
or Schedule K-1-T, Beneficiary’s Share of Income and Deductions, comply with the College Savings Plans Network’s disclosure
specifically identifying your income. principles, and
a copy of Illinois Schedule K-1-P or K-1-T or a copy of the annually inform Illinois residents and those distributing the
notification furnished to you that specifically details the amount of program that in-state programs exist.
your distributive share of additions. Qualified Illinois ABLE program earnings

Schedule M Instructions (IL-1040) (R-12/22) Printed by authority of the State of Illinois. Electronic only, one copy. Page 1 of 5

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Line 5 — Illinois special depreciation addition                           Line 12 — Add Lines 1 through 11. Enter the amount here and on 
Enter the addition amount from Form IL-4562, Special Depreciation,        Form IL-1040, Line 3.
Step 2, Line 4. See Form IL-4562 instructions for more information.       Step 3: Figure your subtractions for Form IL-1040, Line 7 
         Do not include your distributive share of any special                 Enter your subtractions as positive amounts only.
depreciation addition from a partnership, S corporation, trust, or 
estate on this line. Your distributive share of additions should be       Line 13 — Contributions you made to “Bright Start” College 
included on Schedule M, Line 2.                                           Savings Pool, “Bright Directions” College Savings Pool, and 
                                                                          “College Illinois” Prepaid Tuition Program.
           Form IL-4562.                                                  You may subtract Contributions you made to “Bright Start” College 
Line 6 — Business expense recapture (nonresidents only)                   Savings Pool, “Bright Directions” College Savings Pool, and “College 
If you reported income from an asset or activity as business income       Illinois” Prepaid Tuition Program.  You may also subtract contributions 
in prior years and reported any income from that asset or activity as     made on your behalf to one of these plans by your employer. You 
nonbusiness income on this Schedule M or on your Schedule NR,             may not subtract contributions made to any other college savings 
Nonresident and Part-Year Resident Computation of Illinois Tax, for       program. If your contributions were made by rolling over funds 
this year, include on this line all deductions you claimed for expenses   from another college savings program into a “Bright Start,” “Bright 
connected with that income in this year and in your two most recent       Directions,” or “College Illinois” account, you may not subtract any 
tax years.                                                                income that was earned in the other savings program and rolled over 
                                                                          into your Illinois account.
Line 7 — Recapture of deductions for contributions to Illinois            Table 13 - For each row, enter the account number in Column A (do 
college savings and ABLE plans transferred to an out-of-                  not enter a name or other information in this column) and amount of 
state plan                                                                contribution made during the tax year to the “Bright Start” and “Bright 
If you made a rollover from an Illinois plan to another state’s plan,     Directions” College Savings Pools and “College Illinois” Prepaid 
enter the smaller of                                                      Tuition Program in Column B. Enter one account per row.  Attach 
    the amount of deductions you claimed for amounts contributed          a separate page with any additional accounts, if needed. Add the 
     to an Illinois college savings or ABLE plan, minus any               amounts in Column B and enter the total on Line 13a. 
     deductions recaptured in prior years, or                             Check the box in Column C if your contribution was a gift.
    the amount you transferred during the tax year from the Illinois                 If you do not have the account number for a gift 
     plan to an out-of-state plan.                                        contribution, attach the following:
Line 8 — Student-Assistance Contribution Credit                               Copy of the cancelled check used to make the contribution, and
If you claimed a credit earned during your current year on Schedule           Account holder’s name and address
1299-C, Income Tax Subtractions and Credits (for individuals), for        Enter the lesser amount of Line 13a or $10,000 ($20,000 if married 
contributions you made to a college savings plan on behalf of an          filing a joint return) on Line 13. 
employee, enter the amount of the Student-Assistance Contribution              Line 13 may not exceed $10,000 ($20,000 if married filing a 
Credit (Credit code 5420) from Schedule 1299-C, Step 3, Column G,         joint return). 
here.                                                                     Line 14 — Distributive share of subtractions from a 
Line 9 — Recapture of deductions for contributions to                     partnership, S corporation, trust, or estate 
college savings and ABLE plans withdrawn for nonqualified                 Enter the amount of your distributive share of subtractions from 
expenses or refunded                                                      a partnership, S corporation, trust, or estate shown in Column A 
If you withdrew funds or received a refund of contributions from a        on your Schedule K-1-P or K-1-T. The partnership, S corporation, 
qualified tuition program or ABLE program, the funds were not used        trust, or estate is required to notify you of your share of any of these 
for qualified expenses at an eligible institution, and the withdrawal or  subtractions. You may enter the amount of such subtractions only if 
refund did not result from the death or disability of a beneficiary of    you are notified. An Illinois entity will send you a Schedule K-1-P or 
the program, include the amount equal to the amount of deductions         K-1-T specifically identifying your subtractions.
you claimed for contributions related to the nonqualified withdrawal or        Your distributive share of subtractions from a partnership, 
refund amount. Enter the smaller of                                       S corporation, trust, or estate for
    the amount of deductions you claimed for amounts contributed             contributions you made to a job training project should be 
     to an Illinois college savings plan or Illinois ABLE plan, minus        included on Line 14, not Line 16.
     any amount recaptured on Line 7 for this year and any      
     deductions recaptured in prior years for that plan, or                  special depreciation should be included on Line 14, not Line 19.
                                                                             U.S. government obligations should be included on Line 14, not 
    the refund or amount you withdrew during the tax year that was  
                                                                             Line 22.
     not used for qualified expenses in an eligible institution plus any  
     refund of contributions.                                             Your beneficiary share of payments from certain retirement plans and 
                                                                          retirement payments to retired partners reported on Schedule K-1-T 
Line 10 — RESERVED                                                        should be included on Line 14, not Form IL-1040, Line 5.
Line 11 — Other income                                                    Do not include any distributive share of river edge redevelopment 
Include any other amounts that you are required to add to your            zone and high impact business dividend subtractions from a 
federal adjusted gross income to arrive at your Illinois base income.     partnership, S corporation, trust, or estate on this line. These 
Please include a detailed description of each addition on the line        subtractions should be included on Line 24 of this schedule. 
provided or on an attached statement.
                                                                                      a copy of Illinois Schedule K-1-P or K-1-T, which identifies 
         For tax years ending on or after December 31, 2021, and          you as a partner, shareholder, or beneficiary and lists your Social 
beginning prior to January 1, 2026, add back an amount equal to           Security number, or a copy of the notification (which includes the 
the amount of Pass-through entity tax you included on Line 51 of the      Federal Employer’s Identification Number) furnished to you that 
Schedule CR.                                                              specifically details the amount of the subtraction being claimed as 
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your distributive share. We will not accept a federal Schedule K-1 or You may not subtract the following:
a Schedule K-1 worksheet. combat pay that is not included in your federal adjusted gross
If the notification you received from a partnership, S corporation, income, Form IL-1040, Line 1
trust, or estate identifies that entity as a grantor trust or disregarded pay you received
entity and does not show you as the person who will report the under the Voluntary Separation Incentive,
income or loss from the grantor trust or disregarded entity, attach a from the military as a civilian,
detailed statement explaining the situation. under the Ready Reserve Mobilization Income Insurance
Line 15 — Restoration of amounts held under claim of right Program,
Enter the amount equal to for duty as an officer in the Public Health Service
the deduction used to compute the federal tax credit for For more information, see Publication 102, Illinois Filing
restoration of amounts held under claim of right under IRC Requirements for Military Personnel.
Section 1341, or
any itemized deduction taken from adjusted gross income in the Form W-2 showing your military pay. If you report dual
computation of taxable income for restoration of amounts held status on Line 21, you must attach both Form W-2 and SF-50,
under claim of right for the taxable year. Standard Form 50 (Notification of Personnel Action).
Line 22 — U.S. Treasury bonds, bills, notes, savings bonds,
Line 16 — Contributions to a job training project
and U.S. agency interest
Enter the amount equal to the contributions you made under the Tax
Increment Allocation Redevelopment Act to a job training project. For Enter the income included in your Form IL-1040, Line 1, you
more information, see Informational Bulletin FY 90-40. received from U.S. Treasury bonds, bills, notes, savings bonds,
U.S. agency interest, and other similar obligations from your
Do not include your distributive share of any contributions to a federal Form 1040 or 1040-SR, or
job training project from a partnership, S corporation, trust, or estate
on this line. Your distributive share of subtractions should be included mutual fund statement plus
on Line 14 of this schedule. any income listed in Publication 101, Income Exempt from Tax, under
Line 17 — Expenses related to federal credits or federally “What if I have income from obligations of the United States
Government?”
tax-exempt income
Enter the amount “What federally-taxable income is exempt from Illinois Income
Tax by other federal statutes?”
of any expenses that were disallowed as federal deductions “What if I have distributions from money market trusts (mutual
under IRC Section 45G(e)(3), 171(a)(2), 265, or 280C because
funds)?”
they are related to income that is exempt from federal tax which
you added back on Form IL-1040, Line 2 or because a credit
was allowed for the expenses, or Mutual fund distributions
included in your adjusted gross income under IRC Section 87. Include the entire amount of federally taxed distributions
Line 18 — RESERVED received from mutual funds investing exclusively
in U.S. government obligations. If the mutual fund invests in
Line 19 — Illinois Special depreciation subtraction U.S. government obligations and non-exempt obligations, your
Enter the subtraction amount from Form IL-4562, Step 3, Line 11. deduction is the distribution received from the mutual fund
See Form IL-4562 instructions for more information. attributable to the U.S. government obligations, as determined
Do not include your distributive share of any special by the mutual fund. If the mutual fund does not provide this
depreciation subtraction from a partnership, S corporation, trust, or percentage amount, multiply the total distribution by a fraction.
estate on this line. Your distributive share of subtractions should be The numerator is the amount invested by the fund in exempt
included on Line 14 of this schedule. U.S. government obligations, and the denominator is the fund’s
total investment.
Form IL-4562.
Line 20 — Contributions made to a qualified Illinois ABLE This subtraction is the amount net of any related bond
program premium amortization.
Table 20 - For each row, enter the account number in Column A (do Savings bond interest that is not included in your federal
not enter a name or other information in this column) and amount of adjusted gross income is not an allowable subtraction.
contributions made during the tax year to the qualified Illinois ABLE
Program in Column B. Enter one account per row. Attach a separate Do not include your distributive share of a subtraction for U.S.
page with any additional accounts, if needed. Add the amounts in government obligations from a partnership, an S corporation, a trust,
Column B and enter the total on Line 20a. or an estate on this line. Your distributive share of subtractions should
Check the box in Column C if your contribution was a gift. be included on Line 14 of this schedule.
If you do not have the account number for a gift
contribution, attach the following: a copy of federal Form 1040 or 1040-SR, Schedule B, if
Copy of the cancelled check used to make the contribution, and required federally, a copy of the statement from the mutual fund,
and any worksheets that clearly identify your interest from U.S.
Account holder’s name and address
obligations.
Enter the lesser amount of Line 20a or $10,000 ($20,000 if married
filing a joint return) on Line 20. For more details, see Publication 101, Income Exempt from Tax.
Line 21 — Military pay earned Line 23 — August 1, 1969, valuation limitation
Enter the amount of military pay that you received from the U.S. Enter the amount of your August 1, 1969, valuation limitation from
Armed Forces or the National Guard of any state, or that you Schedule F, Gains from Sales or Exchanges of Property Acquired
received as a dual status military technician. Before August 1, 1969, Line 17.
Schedule F and copies of required federal forms.
Schedule M Instructions (IL-1040) (R-12/22) Page 3 of 5

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Line 24 —  River edge redevelopment zone and high impact                   Securities exempt from Illinois Income Tax include
business dividend subtraction                                                Illinois Housing Development Authority bonds and notes    
Enter the amount from Schedule 1299-C, Step 1, Line 7.                       (except housing-related commercial facilities bonds and notes) 
                                                                             Tri-County River Valley Development Authority bonds
       Schedule 1299-C.                                                      Illinois Development Finance Authority bonds, notes, and other  
Line 25 — Recovery of items previously deducted on federal                   obligations (only venture fund and infrastructure bonds) 
Form 1040 or 1040-SR, Schedule A                                             Quad Cities Regional Economic Development Authority bonds  
Enter the amount of recovery of items (including refunds of any state        and notes (only those bonds declared exempt from taxation by  
and local income taxes, other than Illinois) that you deducted on your       the Authority)
federal Form 1040 or 1040-SR, Schedule A, in a prior year. You must          College savings bonds issued under the General Obligation  
have included these items on your federal Form 1040 or 1040-SR,              Bond Act in accordance with the Baccalaureate Savings Act
Schedule 1, and your Form IL-1040, Line 1, for this tax year.                Illinois Sports Facilities Authority bonds
                                                                             Higher Education Student Assistance Act bonds 
       a copy of federal Form 1040 or 1040-SR, page 1, and                   Illinois Development Finance Authority bonds issued under the
Schedule 1, and any schedule or attachment to your federal Form              Illinois Development Finance Authority Act, Sections 7.80 - 7.87   
1040 or 1040-SR that shows the nature and source of this deduction.          Rural Bond Bank Act bonds and notes 
Line 26 — Ridesharing money and other benefits                               Illinois Development Finance Authority bonds issued under the  
Enter the amount of ridesharing money and benefits (other than               Asbestos Abatement Finance Act  
salary) received by a driver in a ridesharing arrangement using a            Quad Cities Interstate Metropolitan Authority bonds 
motor vehicle if these amounts are included in your Form IL-1040,            Southwestern Illinois Development Authority bonds
Line 1.  Do not include income received from ridesharing companies.          Illinois Finance Authority bonds issued under the Illinois Finance  
Line 27 — Payment of life insurance, endowment, or annuity                   Authority Act, Sections 820.60 and 825.55, or the Asbestos  
benefits received                                                            Abatement Finance Act
Enter the amount of payment of life insurance, endowment, or                 Illinois Power Agency bonds issued by the Illinois Finance   
annuity benefits received before the time they would have ordinarily         Authority
been paid as an indemnity for a terminal illness. This amount must be        Central Illinois Economic Development Authority bonds 
included in your Form IL-1040, Line 1.                                       Eastern Illinois Economic Development Authority bonds 
Line 28 —  Lloyd’s plan of operation income if reported on                   Southeastern Illinois Economic Development Authority bonds 
your behalf on Form IL-1065                                                  Southern Illinois Economic Development Authority bonds
Enter the income included in your adjusted gross income from a               Illinois Urban Development Authority bonds
Lloyd’s plan of operation if that amount was reported on your behalf         Downstate Illinois Sports Facilities Authority bonds
on Form IL-1065.                                                             Western Illinois Economic Development Authority bonds
Line 29 — Income from Illinois pre-need funeral, burial, and                 Upper Illinois River Valley Development Authority Act bonds
cemetery trusts                                                              Will-Kankakee Regional Development Authority bonds
Enter the amount of income earned by trust accounts established              Export Development Act of 1983 bonds
under the Illinois Pre-Need Cemetery Sales Act or the Illinois Funeral       New Harmony Bridge Authority bonds
or Burial Funds Act. You may claim this amount only if this income is        New Harmony Bridge Bi-State Commission bonds
included on your Form IL-1040, Line 1 or Line 3.                         For more information see Publication 101, Income Exempt from Tax.
Line 30 — Education loan repayments for primary care physicians          Line 35 — Interest on tax-exempt obligations of non-U.S. 
Enter the amount of education loan repayments made for primary           governments
care physicians who agree to practice in designated shortage areas       Enter the amount of interest on obligations of non-U.S. governments 
for a specified period of time under the terms of the Family Practice    included on Form IL-1040, Line 1, 2, or 3. This amount is the amount 
Residency Act. You may claim this amount only if this income is          net of any related bond premium amortization. 
included on your Form IL-1040, Line 1 or Line 3.                           Interest from non-U.S. government obligations is not exempt from 
Line 31 — Reparations or other amounts received as a victim              Illinois Income Tax except where legislation has been specifically 
of persecution by Nazi Germany                                           adopted to provide for an exemption. 
Enter the amount of reparations or other amounts received as a             Non-U.S. securities exempt from Illinois Income Tax include
victim of persecution for racial or religious reasons by Nazi Germany       Bonds issued by the government of Guam
or any other Axis regime that are included in your adjusted gross           Bonds issued by the government of Puerto Rico
income. Also include any reparations or other amounts received as           Bonds issued by the government of the Virgin Islands
an heir of such victim that are included in your adjusted gross income.     Bonds issued by the government of American Samoa
Line 32 and 33 — Follow the instructions on the form.                       Bonds issued by the government of the Northern Mariana Islands
Line 34 — Interest on tax-exempt obligations of state and                   Mutual mortgage insurance fund bonds
local government                                                         Line 36 — Your child’s interest reported on federal Form 8814
Enter the amount of interest on obligations of Illinois state and local  Enter the amount of your child’s income that you reported on 
governments included on Form IL-1040, Line 1, 2, or 3. This amount       federal Form 8814, Parents’ Election To Report Child’s Interest and 
is the amount net of any related bond premium amortization.              Dividends, that would be allowed as a subtraction on Lines 22, 34, or 
  Interest from state and local government obligations is not exempt     35 of this schedule if you had received it rather than your child. You 
from Illinois Income Tax except where legislation has been               may claim this amount only if your child’s income is included on your 
specifically adopted to provide for an exemption.                        Form IL-1040, Line 1 or Line 3. 
  The following is a list of securities that are exempt. However, income 
from these obligations is not exempt if you own them indirectly 
through owning shares in a mutual fund.
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Line 37 — Railroad sick pay and railroad unemployment 
compensation
Enter the amount of any railroad sick pay and railroad unemployment 
compensation that is included in your Form IL-1040, Line 1.
 Do not include retirement or third party sick pay on this line. 

 Form 1099-G or Form W-2 showing railroad sick pay or 
railroad unemployment compensation and a copy of page 1 of your 
federal return and Schedule 1. 
Line 38 — Unjust imprisonment compensation
Enter the amount of any compensation you were awarded by the 
Illinois Court of Claims for time unjustly served in an Illinois prison if it 
is included in your Form IL-1040, Line 1.
Line 39 — Distributions from “Bright Start,” “College Illinois,” 
and “Bright Directions” college savings plans
Enter the amount of distributions from the “Bright Start,” “College 
Illinois,” and “Bright Directions” college savings plans if you included 
them in your federal adjusted gross income because you claimed a 
federal American Opportunity Credit or Lifetime Learning Credit for the 
expenditures. 
Line 40 — Add Lines 33 through 39. Enter the amount here and on 
Form IL-1040, Line 7.

Schedule M Instructions (IL-1040) (R-12/22)                                                                                                                                                                                                       Page 5 of 5

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