Illinois tax return changes for 2026

• Retirement payments to retired partners reported on K-1-P or K-1-T move from line 5 to Schedule M, line 14.
• Schedule M line 18 is a new subtraction for medical debt relief.
• The Illinois Child Tax Credit on Schedule IL-E/EITC is now figured at 40%, with updated income limits.
• Line 42 collects information for Get Covered Illinois.

• For tax years beginning on or after January 1, 2026, Illinois decouples from federal 100% bonus depreciation (IL-4562, line 16).
• From tax years ending on or after December 31, 2025, two safe harbor exceptions are removed from the 80/20 addback for interest and intangible expense, and Illinois follows federal guidance on section 163(j) interest allocation.
• Unitary groups must use the Finnigan method on Schedule UB from the same date.
• The dividends received deduction for net CFC tested income (formerly GILTI) is limited to 50% on Schedule J.
• Gains on S corporation shares or partnership interests are allocable to Illinois when the entity is taxable there, for years ending on or after June 16, 2025.

FY 2026-15 does not address the federal tips, overtime or section 174A provisions. Check later Department guidance before deciding how they affect an Illinois return.

Illinois penalties are summarised at /us/penalties/illinois.