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Illinois non-refundable credit not calculated correctly

On my 2022 Illinois tax return, schedule ICR showed a non-refundable credit (5% of property taxes paid), but was still included in my "refund" amount (IL-1040). This resulted in me expecting a larger refund than was actually issued to me by Illinois. Is this a TurboTax calculation error?

3 Replies

Illinois non-refundable credit not calculated correctly

can't say for sure where the issue lies. non -refundable means that it can reduce your Illinois tax  tax liability to zero with any excess lost.  it can be part of your refund as this example will show


tax liability line 14  $500

nonrefundable credit line 16 $400 (iCR)

net tax line 19/24  $100

withholding line 25/30 $1000

refund line 31 $900 (line 30 - line 24)

without the ICR refund would have been only $500


same as above except line 16 $800

net tax on line 19/24 limited to zero

refund $1000


did you answer all the questions about the property tax credit, perhaps Illinois change something else on your return. call to get an explanation https://tax.illinois.gov/aboutidor/contactus.html 

I'm in Illinois and have desktop version. tried various scenarios and always had the correct amount of the property credit




Illinois non-refundable credit not calculated correctly

Thanks. Key misunderstanding was that non-refundable credit doesn’t mean it can’t be part of your refund, just that it can’t reduce your tax liability past zero.


Illinois must have somehow determined I was not eligible for a property tax credit differently than TurboTax did - waiting for a letter to that effect (IL DOR website says they will mail an explanation if the refund amount differs from your IL-1040) and also requested a letter to be able to register an online account with IL DOR.

Illinois non-refundable credit not calculated correctly

here are the rules for Illinois but I can't explain why Turbotax would allow it if you properly answer the questions 

1) The Illinois Property Tax Credit is not allowed if the taxpayer’s
adjusted gross income for the taxable year exceeds $500,000 for
returns with a federal filing status of married filing jointly, or $250,000
for all other returns.
2) You may figure a credit for the Illinois property taxes you paid in 2022
on your principal residence (not a vacation home or rental property)
for the time you owned and lived at the property during 2021, if that
residence was in Illinois. Nonresidents of Illinois may not take this
You may not figure a credit for mobile home privilege tax, penalties,
or fees included in your property tax bill, or the portion of the property
tax that is deductible as a business expense.
If you are married and both you and your spouse qualify for
a property tax credit on your principal residence, and you are filing
separate Illinois returns, you may each claim a property tax credit.
However, the total amount of credit claimed between both spouses
may not exceed 5 percent of the qualifying property tax. 

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