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Illinois: Partnerships Obtain Relief from Negative Legislation!
by AccountingWeb on
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.
This removes the negative impact of SB 1912.See my prior posts for more details:November 4, 2009July 27, 2009