How to File the 2022 Schedule IL-E/EIC

Schedule IL-E/EIC is a supplemental document for the Illinois individual income tax return, Form IL-1040. It provides a worksheet to calculate the Illinois exemption allowance for dependents and a method to figure the Illinois Earned Income Credit (EIC). Taxpayers use this schedule to determine their eligibility for and the amount of these two state tax benefits. The schedule is a required attachment in specific circumstances.

Determining if You Need to File

You must complete and file Schedule IL-E/EIC if you meet certain conditions. An Illinois exemption allowance is not permitted if your federal adjusted gross income (AGI) for the tax year surpasses certain thresholds. For those with a federal filing status of married filing jointly, the limit is $500,000; for all other filing statuses, the AGI limit is $250,000. If your income is below these amounts, you may be eligible for the dependent exemption and would use the schedule to calculate it.

You also file Schedule IL-E/EIC when claiming the Illinois Earned Income Credit. To claim the state credit, you must complete this schedule. If you fraudulently claim the EIC, you may be barred from claiming it for up to ten years and could face other penalties.

Calculating Your Illinois Exemption Allowance

The first part of Schedule IL-E/EIC is for calculating the Illinois exemption allowance for dependents. The exemption for the taxpayer and spouse is calculated directly on Form IL-1040. For the 2022 tax year, the personal exemption amount is $2,425 per eligible dependent. Before starting, you will need your federal AGI from your U.S. Form 1040 or 1040-SR and the total number of dependents you are claiming.

The calculation begins by listing each dependent you are claiming. You will multiply the total number of dependents by $2,425 to find your total dependent exemption amount. The form requires you to provide each dependent’s name, Social Security number, and relationship to you.

The exemption allowance is subject to a phase-out, meaning it is gradually reduced as your income increases. The allowance is completely eliminated if your federal AGI exceeds the state’s income thresholds. The schedule guides you through the specific calculation to determine the reduced exemption amount if your income falls within the phase-out range.

Calculating Your Illinois Earned Income Credit

This part of the schedule is for calculating the Illinois Earned Income Credit, a benefit for working individuals with low to moderate income. A requirement is that you must qualify for the federal Earned Income Credit to be eligible for the Illinois credit. The Illinois EIC for 2022 is 18% of your federal EIC, so the final EIC amount from your federal tax return is needed.

You will take the amount of your federal Earned Income Credit and multiply it by 18% (0.18). The result is your Illinois Earned Income Credit. The schedule requires you to enter the amount of your federal credit and then perform this multiplication.

You must also provide information about the qualifying children you claimed for the federal credit. The schedule has a section to list each qualifying child’s name, Social Security number, and relationship to you. If you are claiming the Illinois EIC, you must attach a copy of pages 1 and 2 of your federal Form 1040 or 1040-SR to your Illinois return.

Finalizing and Submitting Your Return

Once you have completed the calculations on Schedule IL-E/EIC, you must transfer the final figures to your main Form IL-1040. The dependent exemption allowance you calculated and the Illinois Earned Income Credit amount are entered on the IL-1040. Ensure these numbers are transferred accurately to the correct lines to avoid processing delays.

The completed Schedule IL-E/EIC must be attached to your Form IL-1040. If you are filing a paper return, arrange your forms in the order specified by the Illinois Department of Revenue, with the schedule placed directly after the main IL-1040 form.

For those filing electronically, tax preparation software handles the attachment process automatically. The software will generate the schedule based on the information you provide and transmit it electronically with your Form IL-1040 to the Department of Revenue.