DCEO credits should be claimed on Line 3 of your Form IL-941. We receive notification from DCEO and apply credits when they become available. Do not claim these credits on your Form IL-941 return until they are available for use per your tax credit certificate or your certificate of verification that you received from DCEO.
There are two different types of DCEO credits for Illinois withholding income tax:
- Illinois Small Business Job Creation Tax credit (ILSBJC) - This credit is applied to the first liability due after the tax credit certificate is issued, and before any Form IL-501 payments you have made. The federal employer identification number (FEIN) you use on your Form IL-941 must match the FEIN on the tax credit certificate you receive from DCEO.
- Economic Development for a Growing Economy withholding tax credit (EDGE) - The EDGE credit is applied to the first liability of the tax year following the Certificate of Verification year and is also considered before any Form IL-501 payments. This credit is not common.
- Please account for your credits when you plan your payments so that your account remains in balance.
- Your DCEO credits are applied to your tax liability before your payments. If you made payments that, added with your DCEO credit, resulted in you overpaying your tax, make sure to claim the payments on your Form IL-941, Step 5, Line 4, and enter the remaining amount on Step 6, Line 7.
- Even if you use a DCEO credit, you still need to report the total amount you withheld from your employees on Step 4, Line 2 of Form IL-941.