Filing guide, cited to official Illinois sources
How to claim the Illinois R&D credit
These steps, forms and dates are procedure taken from official Illinois publications, listed under "Sources for this section" and verified on . The rate, base and carryforward figures on this page come from Ricerca's rules registry.
Step by step
- 1 Total the year's Illinois qualifying expenses: Illinois wages for qualified services, Illinois supplies, Illinois computer rental or lease costs, 65% of Illinois contract research, and (corporations only) basic research payments for research in Illinois. The definitions follow the federal §41 credit, limited to research conducted in Illinois.
- 2 Total the same categories for each of the 3 prior tax years and average them. That average is the base period amount. A base-period year in which you were not doing business in Illinois counts as zero.
- 3 Complete the Research and Development Worksheet in Schedule 1299-I: the base-period average goes in Column A and the current year in Column B.
- 4 Carry the worksheet totals to your Schedule 1299 (Step 1 of Schedule 1299-D, or Step 2 of Schedule 1299-A or 1299-C) and enter the credit in Step 3 under credit code 5340.
- 5 Attach any Schedule K-1-P that lists a research credit distributed to you, and keep your worksheets: IDOR may ask for support for the amount claimed.
- 6 Carry forward what you cannot use. Credit above the year's tax liability carries over for the following 5 tax years, earliest year first.
Federal Form 6765, line by line Estimate the federal credit State R&D credits in 2026: rates and refundability
Key dates
- Tax years the credit covers
- Tax years ending before January 1, 2037. P.A. 104-468 (Article 825, effective June 16, 2026) moved the end date out from January 1, 2032. IDOR's credit table dated January 2026 predates that act and still shows tax years ending on or before December 31, 2031. Source
- Carryforward window
- Unused credit carries over to the following 5 tax years. No credit can be carried to a year more than 5 years after the year the expense was incurred. Source
Which form to file
| Form | Who files it | Link |
|---|---|---|
| Schedule 1299-D, Income Tax Credits1299-D | Corporations and fiduciaries | Official page |
| Schedule 1299-A, Tax Subtractions and Credits1299-A | Partnerships and S corporations | Official page |
| Schedule 1299-C, Income Tax Subtractions and Credits1299-C | Individuals filing Form IL-1040, including owners claiming a share passed through to them | Official page |
| Schedule 1299-I, Income Tax Credits Information and Worksheets1299-I | Every filer: it holds the Research and Development Worksheet (credit code 5340) that feeds the schedules above | Official page |
Who can claim it
- Only research conducted in Illinois counts. Qualifying expenses are those allowable for the federal §41 credit that are attributable to research in Illinois.
- IDOR lists activities that do not qualify, including research after commercial production begins, adapting a product to a particular customer's need, duplicating an existing product or process, surveys or studies, certain internal-use software, research outside Illinois, research in the social sciences, arts or humanities, and research funded by another person or a government entity.
- Partnerships and S corporations can distribute the credit to their owners, who claim it with the Schedule K-1-P they receive. For tax years ending on or after December 31, 2023, Section 251 of the Illinois Income Tax Act governs that pass-through.
Program rules worth knowing
- IDOR's credit table lists the research and development credit as not transferable.
Illinois R&D tax credit FAQ
Which form do I use to claim the Illinois R&D credit?
When does the Illinois R&D tax credit expire?
Can I sell or transfer an Illinois R&D credit?
Does research done outside Illinois count?
Sources for this section
The Illinois filing guide and FAQ above are drawn from these official publications and were verified on . They are re-checked each year and whenever a listed deadline passes.
- 35 ILCS 5/201(k), Research and development credit (Illinois General Assembly)
- Public Act 104-468 (SB 3019), Article 825 (Illinois General Assembly)
- Income Tax Credits and Expirations, IDOR-RPT6 (R-01/26) (Illinois Department of Revenue)
- 2025 Schedule 1299-I, Income Tax Credits Information and Worksheets (Illinois Department of Revenue)
Illinois R&D credit rules for TY2026
Each row is a field from the registry entry our engine applies. A blank field says so; it is never filled in.
- Credit for TY2026
- Current credit Yes. Our rules registry carries a current Illinois research credit for tax year 2026.
- Structure
- Incremental: the credit applies to qualified research expenses above a state base amount
- Credit rate
- 6.5% of qualified research expenses above the base amount
- Base method
- The base amount is the average Illinois qualified research expenses of the 3 preceding years. Where a prior year is missing from the data, the engine flags the substitute base it used rather than quietly assuming one.
- Carryforward
- 5 years
- Carryback
- None recorded
- Refundable?
- Not determined in our registry - we confirm it in the study The registry treats an unverified "nonrefundable" as unknown rather than asserting it.
- State form
- Schedule 1299-D (corporations and fiduciaries), Schedule 1299-A (partnerships and S corporations) or Schedule 1299-C (individuals) Registry update pending: verified against the official Illinois source on September 28, 2026; it replaces an out-of-date form in the rules registry our engine reads.
- Statute
- 35 ILCS 5/201(k)
How the Illinois credit is computed
The Illinois credit is incremental: it applies to the qualified research expenses that exceed a state base amount, not to the whole year's spending. The registry carries a rate of 6.5%.
The base amount is the average Illinois qualified research expenses of the 3 preceding years. Where a prior year is missing from the data, the engine flags the substitute base it used rather than quietly assuming one.
Unused credit carries forward 5 years. Refundability: not determined in our registry, so the study confirms it against the statute rather than asserting it here.
Ricerca computes the Illinois figure from the same substantiated expenses as the federal §41 credit, under the registry entry for the year claimed. Where the registry is silent, the study says so and the point is resolved with your return preparer, not assumed.
Claiming it alongside the federal credit
The federal §41 credit comes first: it is computed from the qualified research expenses the study substantiates and filed on Form 6765 with the return. The Illinois credit is then computed from that same base under the state's own rules.
State credits generally reach only research performed in the state, so the study records where each expense was incurred as it is built, not at filing time.
One base, two computations
- 1 Qualify the activities under the four-part test and total the year's QREs.
- 2 Compute the federal §41 credit and file it on Form 6765.
- 3 Apply the Illinois entry above to the Illinois share of that base, and file it on Schedule 1299-D (corporations and fiduciaries), Schedule 1299-A (partnerships and S corporations) or Schedule 1299-C (individuals).
Registry sources
The citations the Illinois registry entry carries, verbatim: what the study cites and a reviewer can check.
- Statute
- 35 ILCS 5/201(k)
- Form (registry update pending)
- Schedule 1299-D (corporations and fiduciaries), Schedule 1299-A (partnerships and S corporations) or Schedule 1299-C (individuals)
Registry entry version 2024.1, exported from services/study-api/app/engines/rules_engine.py (STATE_RULES_2024 + STATE_RULES_REGIME_OVERRIDES via RulesEngine.get_state_rules) on September 10, 2026. The entry above governs TY2026; a study for an earlier year uses that year's entry.
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