The Illinois R&D credit is generated from qualified research activities (QRAs) performed within the state. Qualifying activities are defined in Section 41 of the Internal Revenue Code as “a new or improved function, performance, or reliability or quality.”

Process improvement activities include:

• Identifying uncertainty concerning the development or improvement of a business component;
• Identifying one or more alternatives intended to eliminate that uncertainty; and
• Identifying and conducting a process of evaluating the alternatives (e.g., through modeling, simulation, or a systematic trial-and-error methodology).

The R&D Tax Credit is a credit that is available across various industries, such as:

• Agriculture
• Automotive
• Aviation
• Biotechnology
• Engineering
• Farming
• Food and Beverage
• Logistics
• Manufacturing
• Oil and Gas
• Software
• Transportation

State Credit Name: The Illinois Research and Development Credit (1299-D, lines 24-33)

Expiration Date: December 31, 2021

Who Can Apply? Corporations and Flow-through entities

Credit Carry Forward: Unused credit can be carried forward up to 5 years.

About the Credit: A non-refundable credit of 6.5% of the QRE’s for qualifying research activities performed in Illinois.

Click here to find out if you qualify for the federal research credit.