State tax filing

No, there isn't a bug in the TurboTax CD\Download Home & Business version. I recreated your situation and was given the IL property tax credit. 

Verify the following:

1. That your Adjusted Gross Income (Form 1040 Line 11) is less than $250,001 for single and $500,001 for Married Filing Jointly
2. On the Property information screen, make sure you enter your County and PIN
3. On the IL Property taxes screen, make sure you did not enter amounts in Amount not on principal residence or Property tax reported as business expense.