Schedule 4255 Instructions
Steps 1, 2, and 3 Specific Instructions
Who must file?
Step 1 —
Complete Step 1 if your now disqualified property
You must file Schedule 4255, Recapture of Investment Credits,
was considered in computing the Enterprise Zone or River Edge
if you claimed an investment credit against your Illinois income or
Redevelopment Zone Investment Credit on
replacement tax liability in a previous year, and any of the property
• Schedule 1299-A, Tax Subtractions and Credits,
considered in the computation of that investment credit becomes
• Schedule 1299-C, Income Tax Subtractions and Credits (for
disqualified.
individuals), or
You must recapture any such investment credit in the year in which the
• Schedule 1299-D, Income Tax Credits (for corporations and
property becomes disqualified (to the extent the credit was actually
fiduciaries).
used in any previous year). Use this form to figure the amount of
recaptured credit that you must add to this year’s tax liability. You must
Step 2 —
Complete Step 2 if your now disqualified property was
complete and file a separate Schedule 4255 for each tax year in
considered in computing the High Impact Business Investment Credit
which the now disqualified property was placed in service, beginning
on
with the earliest year. Each Schedule 4255 should report only items
• Schedule 1299-C or
placed in service during the same tax year you wrote at the top of the
• Schedule 1299-D.
form. You cannot amend a previous year’s return in order to exclude
Step 3 —
Complete Step 3 if your now disqualified property was
the disqualified property. Attach all completed 4255 schedules to
considered in computing the Replacement Tax Investment Credit on
your return.
Form IL-477, Replacement Tax Investment Credits.
For tax years ending on or after December 31, 2000,
Use the following instructions to complete Columns A
investment credits earned by you and allocable to your partners and
through E in Steps 1 through 3.
shareholders subject to replacement tax automatically flow through
Column A —
to those partners and shareholders. The amount allocable to other
Write the date the now disqualified property was
placed in service. All entries must be within the same tax year.
partners and shareholders remains with you.
Partners and shareholders are required to report any recapture on
Column B —
Write the date the property became disqualified. All
their respective returns. You must attach Schedule 4255 to your return
entries must be within the tax year of the return to which you are
and provide a copy to your partners or shareholders.
attaching this form.
Column C —
Describe the property exactly as it was described
When does property cease to qualify?
when you originally computed the investment credit.
Enterprise Zone or River Edge Redevelopment Zone Investment
Column D —
Briefly describe the reason for the disqualification
Credit — Property ceases to qualify if, within 48 months of placing it
(e.g., removed from service, involuntarily converted, etc.).
into service, you dispose of the property, convert it to personal use, or
Column E —
Write the basis that was shown when the investment
move it outside an Illinois enterprise zone or river edge redevelopment
credit was originally computed.
zone.
High Impact Business Investment Credit — For tax years ending on
Use the following instructions to complete Columns F
or before December 31, 1996, property ceases to qualify if, within 48
through H in each step.
months of placing it into service, you dispose of the property, convert
Step 1
it to personal use, or move it outside of Illinois. For tax years ending
on or after January 1, 1997, if you entered into an agreement with a
Column F —
Write the enterprise zone or river edge redevelopment
taxing district and were granted a tax abatement and you relocate your
zone in which your property was used when the investment credit was
entire facility in violation of the terms and length of the contract under
originally computed.
Section 18-183 of the Property Tax Code, you must recapture the
Column G —
amount of credit previously received under the agreement.
For property placed in service in an enterprise zone
Replacement Tax Investment Credit — Property ceases to qualify if,
• write .005.
within 48 months of placing it into service, you dispose of the property
For property placed in service in a river edge redevelopment
or move it outside of Illinois. In addition, property placed in service
zone, write the percentage from the original
prior to January 1, 1994, becomes disqualified if it is used for purposes
• Schedule 1299-A, Step 2, Column G, Line 28, for the year you
other than manufacturing, retailing, coal mining, or fluorite mining
claimed the credit for that property.
within 48 months after being placed in service. Property placed in
• Schedule 1299-C, Step 3, Section B, Column G, Line 13, for the
service on or after January 1, 1994, also becomes disqualified if it is
year you claimed the credit for that property.
converted to personal use, or if you are no longer primarily engaged in
• Schedule 1299-D, Step 1, Section B, Column G, Line 16, for the
manufacturing, retailing, coal mining, or fluorite mining.
year you claimed the credit for that property.
Property is “disposed of” if it is sold, exchanged, traded-
Column H —
For each item of property that is now disqualified,
in, abandoned, retired from use, destroyed by casualty, stolen, or
multiply Column E by Column G, and write the result here.
transferred as a gift. Property is not “disposed of” if it is mortgaged or
used as security for a loan, unless it is converted to a non-qualifying
use.
Schedule 4255 (R-12/12)
Schedule 4255 Instructions (R-12/12)
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