Illinois Form IL-4562

Illinois Form IL-4562, Special Depreciation, is a state tax form used to calculate adjustments related to special depreciation claimed on a federal income tax return. It helps taxpayers reconcile federal bonus depreciation with Illinois income tax treatment by calculating the required special depreciation addition and subtraction. The form is designed for individuals, corporations, S corporations, partnerships, estates, and trusts that need to report applicable depreciation adjustments for Illinois income tax purposes. It collects information about the taxpayer, the federal special depreciation allowance, depreciation amounts claimed for eligible property, and adjustments from previous tax years. The calculations are divided into two main parts: Step 2 determines the Illinois special depreciation addition, while Step 3 calculates the Illinois special depreciation subtraction. These adjustments help determine the appropriate depreciation amounts for Illinois tax reporting rather than simply carrying over the federal depreciation figures. Form IL-4562 is identified as Illinois Attachment No. 11 and is attached to the applicable Illinois income tax return. It applies to tax years ending on or after December 31, 2025. Completing the form correctly is important because errors in depreciation calculations can affect the amount of income reported for Illinois tax purposes. Taxpayers must also consider previous-year depreciation adjustments when completing certain lines, particularly when a property reaches its final year of regular depreciation. The form specifically instructs taxpayers not to enter negative figures and requires them to read the applicable instructions before completing the calculations.

How To File Form IL-4562

Form IL-4562 is not generally filed as a separate tax return. It must be attached to the applicable Illinois income tax return.

The form identifies the following returns:

• Form IL-1120: Illinois Corporation Income And Replacement Tax Return.
• Form IL-1120-ST: Illinois Small Business Corporation Replacement Tax Return.
• Form IL-1065: Illinois Partnership Replacement Tax Return.
• Form IL-1041: Illinois Fiduciary Income And Replacement Tax Return.
• Form IL-1040: Illinois Individual Income Tax Return.

Before completing Form IL-4562, gather the following information:

• Your legal name as it appears on the Illinois tax return.
• Your Social Security number (SSN) or federal employer identification number (FEIN).
• The tax year-ending date.
• Your current federal Form 4562.
• Federal Form 2106, if applicable to an individual taxpayer.
• Records of special depreciation allowances claimed for the relevant property.
• Previous-year Illinois Forms IL-4562.
• Depreciation records showing the applicable amounts for each property.

Important Filing Instructions

The form applies to tax years ending on or after December 31, 2025. Enter the applicable month and year in the tax year-ending field. Do not enter negative figures anywhere on the form. Read the applicable Illinois instructions before calculating the depreciation adjustments, particularly when determining the amounts associated with specific property and previous-year depreciation adjustments.

How To Complete Form IL-4562

The form contains three main steps. Step 1 collects taxpayer identification information, Step 2 calculates the Illinois special depreciation addition, and Step 3 determines the Illinois special depreciation subtraction.

Step 1: Provide The Following Information

Step 1 identifies the taxpayer and the tax period covered by the form. Complete the identification fields before moving to the depreciation calculations.

Tax Year Ending

Enter the month and year when the applicable tax year ends. For a calendar-year taxpayer, the ending date is December 31, 2025. Taxpayers using a fiscal year should enter their actual tax year-ending month and year.

Taxpayer Name

Enter your legal name exactly as it appears on the Illinois income tax return to which Form IL-4562 will be attached. Businesses and other entities should use the name shown on their applicable Illinois return.

Social Security Number (SSN) Or Federal Employer Identification Number (FEIN)

Enter the appropriate taxpayer identification number.

• Individuals generally enter their Social Security number.
• Businesses and other entities generally enter their federal employer identification number.

Double-check the number before proceeding to Step 2.

Step 2: Figure Your Illinois Special Depreciation Addition

Step 2 calculates the Illinois special depreciation addition. It uses federal depreciation amounts and certain previous-year Illinois depreciation adjustments to determine the total addition required for Illinois tax reporting.

Line 1: Special Depreciation Allowance From Federal Form 4562

Enter the total special depreciation allowance claimed on your current federal Form 4562, Depreciation and Amortization.

Use the amounts reported on federal Form 4562, Lines 14 and 25, for property acquired after September 10, 2001. Add the applicable amounts from both lines and enter the combined total on Line 1.

Line 2: Special Depreciation Allowance From Federal Form 2106

This line applies to individuals only.

Enter the total special depreciation allowance claimed through federal Form 2106, Employee Business Expenses. Use the applicable amount associated with the depreciation reported for the relevant property.

Corporations, partnerships, and other entities that are not completing this individual-only calculation should not enter an amount based on this provision.

Line 3: Illinois Depreciation Subtractions In The Last Year Of Regular Depreciation

This line applies when property reaches its last year of regular depreciation.

Enter the total Illinois depreciation subtractions claimed for each applicable property on the current-year and previous-year Forms IL-4562, Step 3.

Review the depreciation history for each property to identify all relevant Illinois depreciation subtraction amounts. Combine the applicable amounts and enter the total on Line 3.

Line 4: Total Illinois Special Depreciation Addition

Add the amounts reported on Lines 1, 2, and 3.

The calculation is:

Line 1 + Line 2 + Line 3 = Line 4.

Enter the combined amount on Line 4. This represents your Illinois special depreciation addition.

Use the applicable Illinois tax return instructions to determine where this addition must be reported. The reporting location depends on the type of Illinois return being filed.

Step 3: Figure Your Illinois Special Depreciation Subtraction

Step 3 calculates the Illinois special depreciation subtraction. It includes different bonus depreciation percentages, individual-specific amounts, percentage-based calculations, and adjustments from previous years.

For Lines 7, 9, 11, 12, and 14, use the portion of depreciation allowance claimed on federal Form 4562 for property for which bonus depreciation was claimed, based on the percentage of the property’s basis specified for each line.

Individuals must enter the applicable portion of depreciation allowance claimed for bonus depreciation using the listed percentage of the property’s basis.

Reserved Lines

Line 5a: Reserved

This line is reserved for future or other designated use. Do not enter a depreciation amount on this line.

Line 5b: Reserved

This line is also reserved. No calculation or depreciation amount is required.

Line 5c: Reserved

This field is reserved and should remain unused.

Line 6: Reserved

Line 6 is reserved. Do not enter an amount or include it in the depreciation subtraction calculations.

30 Percent Bonus Depreciation

Line 7a: Bonus Depreciation Equal To 30 Percent

Enter the portion of the depreciation allowance claimed on federal Form 4562 that corresponds to 30 percent of the property’s basis for applicable property.

Use the relevant federal depreciation records to determine the correct amount.

Line 7b: Individuals Only, Bonus Depreciation Equal To 30 Percent

Individuals should enter the applicable 30 percent bonus depreciation amount for their qualifying property.

This line is specifically designated for individual taxpayers.

Line 7c: Total 30 Percent Bonus Depreciation

Add the amounts entered on Lines 7a and 7b.

The calculation is:

Line 7a + Line 7b = Line 7c.

Enter the combined amount on Line 7c.

Line 8: 30 Percent Bonus Depreciation Adjustment

Multiply the amount reported on Line 7c by 42.9 percent, or 0.429.

The calculation is:

Line 7c × 0.429 = Line 8.

Enter the resulting amount on Line 8.

40 Percent Bonus Depreciation

Line 9a: Bonus Depreciation Equal To 40 Percent

Enter the portion of the depreciation allowance claimed on federal Form 4562 that corresponds to 40 percent of the property’s basis.

Review the applicable depreciation records and follow the additional instructions for this line.

Line 9b: Individuals Only, Bonus Depreciation Equal To 40 Percent

Individuals should enter the applicable 40 percent bonus depreciation amount for their qualifying property.

This calculation is separate from the amount reported on Line 9a.

Line 9c: Total 40 Percent Bonus Depreciation

Add Lines 9a and 9b.

The calculation is:

Line 9a + Line 9b = Line 9c.

Enter the combined amount on Line 9c.

Line 10: 40 Percent Bonus Depreciation Adjustment

Multiply the amount reported on Line 9c by 66.7 percent, or 0.667.

The calculation is:

Line 9c × 0.667 = Line 10.

Enter the resulting amount on Line 10.

50 Percent Bonus Depreciation

Line 11a: Bonus Depreciation Equal To 50 Percent

Enter the portion of the depreciation allowance claimed on federal Form 4562 that corresponds to 50 percent of the property’s basis for applicable property.

Line 11b: Individuals Only, Bonus Depreciation Equal To 50 Percent

Individuals should enter the applicable 50 percent bonus depreciation amount for their qualifying property.

Line 11c: Total 50 Percent Bonus Depreciation

Add Lines 11a and 11b.

The calculation is:

Line 11a + Line 11b = Line 11c.

Enter the combined amount on Line 11c.

60 Percent Bonus Depreciation

Line 12a: Bonus Depreciation Equal To 60 Percent

Enter the portion of the depreciation allowance claimed on federal Form 4562 that corresponds to 60 percent of the property’s basis.

Use the applicable depreciation records to determine the correct amount.

Line 12b: Individuals Only, Bonus Depreciation Equal To 60 Percent

Individuals should enter the applicable 60 percent bonus depreciation amount for their qualifying property.

Line 12c: Total 60 Percent Bonus Depreciation

Add Lines 12a and 12b.

The calculation is:

Line 12a + Line 12b = Line 12c.

Enter the combined amount on Line 12c.

Line 13: 60 Percent Bonus Depreciation Adjustment

Multiply the amount reported on Line 12c by one and one-half, or 1.5.

The calculation is:

Line 12c × 1.5 = Line 13.

Enter the resulting amount on Line 13.

80 Percent Bonus Depreciation

Line 14a: Bonus Depreciation Equal To 80 Percent

Enter the portion of the depreciation allowance claimed on federal Form 4562 that corresponds to 80 percent of the property’s basis for applicable property.

Line 14b: Individuals Only, Bonus Depreciation Equal To 80 Percent

Individuals should enter the applicable 80 percent bonus depreciation amount for their qualifying property.

Line 14c: Total 80 Percent Bonus Depreciation

Add Lines 14a and 14b.

The calculation is:

Line 14a + Line 14b = Line 14c.

Enter the combined amount on Line 14c.

Line 15: 80 Percent Bonus Depreciation Adjustment

Multiply the amount reported on Line 14c by four.

The calculation is:

Line 14c × 4 = Line 15.

Enter the resulting amount on Line 15.

Additional Depreciation And Final Subtraction Calculation

Line 16: Federal Depreciation Without Bonus Depreciation

Enter the amount of federal depreciation that you would have claimed if you had elected not to claim bonus depreciation on your federal tax return.

Determine this amount using the applicable property and depreciation records. Follow the instructions for the specific calculation.

Line 17: Total Depreciation Adjustment

Add the amounts reported on Lines 8, 10, 11c, 13, 15, and 16.

The calculation is:

Line 8 + Line 10 + Line 11c + Line 13 + Line 15 + Line 16 = Line 17.

Enter the combined amount on Line 17.

Make sure that each amount comes from the correct preceding calculation before determining the total.

Line 18: Previous-Year Illinois Special Depreciation Addition

This line applies when property reaches its last year of regular depreciation.

Enter the Illinois special depreciation addition reported for each applicable property on any previous-year Form IL-4562, Step 2, by combining Line 1 and Line 2.

The calculation for each applicable property is:

Previous-Year Step 2, Line 1 + Previous-Year Step 2, Line 2.

Combine the applicable amounts and enter the total on Line 18.

Review previous-year forms carefully to ensure that the correct amounts are included.

Line 19: Total Illinois Depreciation Subtraction

Add the amounts reported on Lines 17 and 18.

The calculation is:

Line 17 + Line 18 = Line 19.

Enter the combined amount on Line 19. This represents your Illinois depreciation subtraction for the current tax year.

Use the applicable Illinois return instructions to determine where this subtraction must be reported. The reporting line depends on the type of Illinois tax return being filed.

Understanding The Calculations In Form IL-4562

The main purpose of Form IL-4562 is to reconcile applicable federal special depreciation amounts with Illinois depreciation adjustments.

Step 2 calculates the Illinois special depreciation addition using federal depreciation allowances and previous Illinois depreciation subtractions.

Step 3 calculates the Illinois special depreciation subtraction through several percentage-based bonus depreciation categories and additional depreciation adjustments.

The following table summarizes the main calculations:

The reserved fields on Lines 5a, 5b, 5c, and 6 are not included in these calculations.

Final Review Before Filing

Before attaching Form IL-4562 to your Illinois income tax return, review every identification field and depreciation calculation. Use the following checklist to help identify missing information and calculation errors.

Taxpayer Information

• Confirm that the correct tax year-ending month and year are entered.
• Verify that the taxpayer’s legal name matches the applicable Illinois tax return.
• Check that the SSN or FEIN is correct.
• Confirm that the form applies to a tax year ending on or after December 31, 2025.

Step 2: Special Depreciation Addition

• Verify the federal Form 4562 amounts used for Line 1.
• Include the applicable Form 2106 amount on Line 2 for individuals.
• Review current-year and previous-year Illinois depreciation subtractions for Line 3.
• Confirm that Lines 1, 2, and 3 are added correctly.
• Verify the total reported on Line 4.

Step 3: Special Depreciation Subtraction

• Leave Lines 5a, 5b, 5c, and 6 reserved.
• Check the applicable 30 percent bonus depreciation amounts.
• Verify the 42.9 percent calculation on Line 8.
• Check the applicable 40 percent bonus depreciation amounts.
• Verify the 66.7 percent calculation on Line 10.
• Review the 50 percent bonus depreciation calculation on Line 11c.
• Review the 60 percent bonus depreciation calculation on Line 12c.
• Verify the multiplication by 1.5 on Line 13.
• Review the 80 percent bonus depreciation calculation on Line 14c.
• Verify the multiplication by four on Line 15.
• Confirm the federal depreciation amount reported on Line 16.
• Check that all required amounts are included in Line 17.
• Review previous-year depreciation additions for Line 18.
• Verify the final Illinois depreciation subtraction on Line 19.

Final Filing Checks

• Confirm that no negative figures have been entered.
• Review the applicable Illinois instructions for property-specific requirements.
• Confirm the correct reporting location for the addition and subtraction.
• Attach Form IL-4562 to the appropriate Illinois income tax return.
• Keep the supporting federal depreciation records and previous-year Illinois forms with your tax records.

Final Thoughts

Illinois Form IL-4562 is an important state tax document for calculating special depreciation additions and subtractions. Understanding the difference between Step 2 and Step 3, reviewing federal depreciation allowances, and checking previous-year adjustments can help taxpayers complete the form accurately.

Pay particular attention to the percentage-based calculations in Step 3 and the previous-year depreciation information required on Lines 3 and 18. Before submitting the form, review the applicable Illinois instructions to confirm property eligibility, calculation requirements, and the correct reporting location on your Illinois income tax return.

Completing each field carefully and maintaining supporting depreciation records can help reduce reporting errors and make the Illinois tax filing process more straightforward.