Illinois Schedule M is used to report Other Additions/Subtractions. As you proceed through the Illinois State Interview in TurboTax, the schedule will be prepared in the background and included in your return, if needed.
You will come to a section in the Illinois interview, 'Here's the Income that Illinois Handles Differently' .
IL subtracts certain federal government interest on the state return and it shows on IL Schedule M, the form where IL additions and subtractions due to the state tax code varying from the federal tax code occur.
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