Illinois: Partnerships Obtain Relief from Negative Legislation!
The Governor of Illinois signed legislation (HB 2239) yesterday repealing the impact of the 2010 Budget Implementation Act (SB 1912 and Public Act 96-0045).SB 1912 would have most likely resulted in partnerships paying more tax. For tax years ending on or after December 31, 2009, partnerships would have only been allowed to deduct guaranteed payments for services rendered by partners, and would not have been allowed to deduct "reasonable compensation."
HB 2239 states, for tax years ending on or after December 31, 2009, partnerships are permitted to subtract the greater of (1) income of the partnership that constitutes personal service income as defined in IRC Sec. 1348(b)(1) or (2) a reasonable allowance for compensation paid or accrued for services rendered by the partners to the partnership.
My name is Brian Strahle and I hope you find this blog informative and useful. My personal mission is to fix and prevent state tax problems. I provide companies with leverage (knowledge, judgment and advocacy) so they can operate across state lines with peace of mind.
I am a multistate tax consultant and I serve clients across the U.S. from my office in Washington D.C. For more info, visit my website: www.leveragestateandlocaltax.com
Because state and local taxes are deceptively simple and endlessly complicated.