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Illinois provides a research and development (R&D) tax credit. Until January 1st, 2027, an R&D credit is allowed against income tax for research activities in Illinois state. The credit is equal to 6.5% of qualifying expenditures over a comparative base amount. The base amount is the average of the prior three years of QREs attributed to Illinois. Excess credits not utilized in a tax year can be carried forward up to five years.
Businesses or taxpayers cannot take this credit for the following kinds of activities:
• research conducted after the beginning of commercial production;
• research adapting an existing product or process to a particular customer’s need;
• duplication of an existing product or process;
• surveys or studies;
• research relating to certain internal-use computer software;
• research conducted outside Illinois;
• research in the "soft sciences", social sciences, arts, or humanities;
• research funded by another person (or government entity).
Illinois’ biggest R&D sectors are pharmaceuticals, machinery, and not surprisingly, agricultural. The state also sees innovations in the banking and insurance sectors.
Learn more about Illinois' R&D Tax Credit law or claim Illinois' R&D Tax Credits here.
R&D Tax Credit Available:
Yes
Eligible Entities:
C-Corporations, S-Corporations, LLCs, Partnerships
Deadline for Tax Filing:
Due with Illinois Tax Return
Data Required to Compute Credit:
Claim Period Qualified R&D Expenses (QREs)
What Information is needed?
QREs for Prior 3 Years
Credit Carryforward:
5 Years
To get an estimate of the potential value of your unclaimed R&D Tax Credits, try out our credit calculator.
Download our R&D Tax Credit Calculator for Android to see how much you can receive from your qualified R&D tax credit expenses.