Illinois Tax Credit schedule ICR on Turbotax Home & Business

[user17751632428]

On schedule ICR, IL state tax property tax credit auto fills line 4a with the sum of my total property taxes (line E1) PLUS the amount that is deductible as a business (line E3) instead of subtracting it. As a result, line 4f reflects my total property taxes and not the non-business portion of my property taxes. Since the credit is based on line 4f, line 4g is too large.  I believe that line 4a should be the difference between line E1 and E2. On my Federal form, my non business property tax amount is reported on Schedule A, but it does not flow through to any line on schedule ICR. The business portion of my property taxes is reported on Schedule F on my Federal return. I can override the amount on ICR line 4a, but hesitate to do that if I am missing something on this schedule.  I am using Turbotax Home & Business, but that edition is not an available choice below, so I chose business, but I am using Home & Business not Turbotax Business. 

[DaveF1006 · Accepted solution]

Use the Step-by-Step interview mode to keep your data connected and prevent a "Hard Override." This helps TurboTax recalculate the link between your Federal Schedule F and Illinois Schedule ICR.

Follow these steps in order:

1. Verify the Federal Business Entry (Schedule F)

Since you mentioned the business portion is on Schedule F, the software needs to "earmark" that money so it knows it’s already been "used" as a deduction.

1. Go to Federal > Income & Expenses.
2. Find your Farm Income and Expenses (Schedule F) and click Edit/Review.
3. Navigate to the Farm Expenses section and find Taxes.
4. Ensure that the amount entered here is only the portion attributed to the business.

Note: If you entered the total property tax bill here, the software will assume the whole thing is a business expense.

2. Edit the Federal Personal Entry

This is the most common place where "double counting" happens.

1. Go to Federal > Deductions & Credits.
2. Find Your Home > Property Taxes.
3. When it asks for the property taxes paid on your main home, only enter the personal portion (Total Bill minus the amount entered on Schedule F).
4. If the software asks "How much of this was for a business?", answer accurately. This is the bridge that tells the Illinois return what to subtract.

3. Clear the Illinois State Interview

Once the Federal data is clean, you often need to edit the State return to get it to look at the new numbers.

1. Go to State Taxes > Illinois.
2. Navigate to the Take a look at Illinois credits screen.
3. Find Property Tax Credit and click Start or Revisit.

TurboTax should present a screen asking you to confirm the Total Property Tax Paid and the Portion used for Business.

Ensure the "Business" box reflects your Schedule F amount and the "Total" reflects the full bill. The software should then perform the subtraction and correctly populate Line 4A.

4. Use "Forms Mode" to Verify (Desktop Version Only)

If you are using the downloaded/CD version of Home & Business, you have a powerful tool called Forms Mode:

1. Click the Forms icon in the top right corner. 
2. In the list on the left, find Schedule ICR.
3. Look at the fields that are highlighted in blue or bold.
4. If the number is wrong, look at the Illinois Property Tax Worksheet (also in the left sidebar).
5. Check the "Source" of that line. Often, there is a checkbox or a small worksheet link that allows you to manually link the Schedule F deduction to the ICR subtraction line.

If all of these suggestions fail, see if you can manually edit the Property Tax Worksheet in your Illinois State forms.

[user17751632428]

This was helpful. The part of the step by step that wasn't clear was that I needed to include the amount that  is deductible as a farm expense in both the blank for the deductible expense AND also in the blank that asks for the part of the property taxes that wasn't on my personal home. It looks like it is double counting the deductible expense, but the numbers come out correctly as verified in the Forms Mode.

Thanks.