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posted Apr 12, 2024 12:19:54 PM

Electronic Filing of IL State Return Rejected Due to 1299-C High Impact Business Credit not being equal to K-1-P or K-1-T

My IL State return was rejected for electronic filing due to the issue stated in the subject line.  The fact of the matter is that High Impact Business Dividends do not need to come from K-1 forms, they can be dividends received via 1099-Div forms.  I believe this is an error in the logic of the TurboTax program.  I am unable to figure out a way to bypass this error.  Anyone experiencing the same issue?  Solutions?  If I am forced to file the IL return manually, I expect the fee I was charged to E-file to be returned!

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1 Replies
Expert Alumni
Apr 18, 2024 1:10:38 PM

No, it's not TurboTax rejecting your e-filed tax return, it's the state of Illinois. 

 

According to the instructions for Schedule 1299-C, to claim this subtraction, you must attach one of the following:

 

  • Schedule(s) K-1-P, Partner’s or Shareholder’s Share of Income, Deductions, Credits, and Recapture, received from a partnership or S-Corporation
  • Schedule(s) K-1-T, Beneficiary’s Share of Income and Deductions
  • Certificates issued by the Department of Commerce and Economic Opportunity (DCEO)
  • Certificates issued by the Illinois Department of Natural Resources (DNR)
  • Certificates issued by the Illinois Department of Agriculture (IDOA)
  • Certificates issued by the Illinois Department of Human Services (DHS)
  • Any other documents, including transfer documentation, required by the Illinois Department of Revenue (IDOR) and noted in these instructions or Schedule 1299-I.

Since only the Schedules K-1 can be attached to the e-filed return, that is what is needed to e-file your Illinois tax return. 

 

If you believe you have properly prepared your tax return and provided all the needed documentation, you can print, sign and mail in your state tax return.