Could spouses filing a joint Illinois return claim the property-tax credit for two separately owned principal residences?

Plain-English summary

Spouses filing jointly could claim the Illinois residential property-tax credit for two principal residences when each spouse owned a home and paid its property tax. IDOR acknowledged that married couples could have two principal residences during the year, including spouses living separately or working in different locations.

Section 208 provided a credit equal to 5% of real property taxes paid by the taxpayer during the taxable year on the taxpayer's principal residence. IDOR's Publication 108 stated that spouses who each had a principal residence—or taxpayers who had two because of a home sale—could include taxes paid on both residences when computing the credit.

The couple did not need to file separate Illinois returns to claim both properties. IDOR could, however, require documentation showing that the taxpayers owned both Illinois residences, paid the taxes, and used both as principal residences during the years at issue.

What this means for you

Joint filing does not by itself limit a married couple to one qualifying residence. Keep deeds, property-tax bills, proof of payment, and records supporting each property's principal-residence status.

Common questions

Q: Did the spouses have to file separate Illinois returns?
A: No. IDOR expressly said separate filing was not required to claim two residences.

Q: Could IDOR ask for supporting records?
A: Yes. It could request proof of ownership, tax payment, and principal-residence status for both homes.

Citations and references

• 35 ILCS 5/208
• 86 Ill. Adm. Code 100.2180
• Illinois Publication 108

Subject

Credits – Property Tax

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/income-tax/2010.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/income-tax/2010/ig100027.pdf

Original ruling text

IT 10-0027-GIL 10/26/2010 CREDITS – PROPERTY TAX
General Information Letter: Spouses filing joint returns, but who maintain separate
Illinois residences, may each claim a credit for property taxes paid on his or her own
residence.
October 26, 2010
Dear:
Your letter dated September 13, 2010 directed to Mr. Brian Hamer has been referred to me for a
response. Your request is as follows:
This is a formal request for a letter ruling on Code Section 100.2180 Credit for Residential
Property Taxes (see enclosed). The reasons for this request are as follows:

1. The code states that every individual taxpayer shall be entitled to a tax credit equal to 5%
   of real property taxes paid on the principal residence of the taxpayer.
2. In no place does this code section limit the principal residence to one per couple.
3. The code states that the residence must be in IL, must be owned by the taxpayer and
   he/she must have paid the real estate taxes.
4. Prior to 2009, the IL 1040 did not limit this credit to one home; with the inclusion of the PIN
   number on Form ICR – with only one space for the home and an additional space for a PIN
   number for adjoining land, there was a reading of the code to limit this credit.
5. There are not a lot, but probably more than a small number of either married couples or
   separated but filing jointly couples, whose spouses each own a principal residence. Each
   taxpayer owns the property in IL and pays the real estate taxes for this property. This may
   include couples who work in different locations in IL and are forced to live/own two principal
   residences, couples in second marriages who each own a residence and separated
   couples each with their own residence.
6. Currently I am aware of at least one audit in this situation for the tax years 2007-9 where
   one of the two principal residence real estate taxes claimed for this credit was disallowed.
   Since the tax form only allows for one address, the property at this address was chosen.
7. Would it be possible for married or separated taxpayers with two residences to file
   separately in IL and then claim the two real estate credits? My clients in this situations file
   jointly for the IRS – could they file separately in IL?
   Thanks for your prompt review of this Code section and reply to me at the above address.
   According to the Department of Revenue (“Department”) regulations, the Department may issue only
   two types of letter rulings: Private Letter Rulings (“PLR”) and General Information Letters (“GIL”).
   The regulations explaining these two types of rulings issued by the Department can be found in 2
   Ill.Adm.Code §1200, or on the website http://www.tax.illinois.gov/LegalInformation/regs/part1200.
   Due to the nature of your inquiry and the information presented in your letter, we are required to
   respond with a GIL. GILs are designed to provide background information on specific topics. GILs,
   however, are not binding on the Department.
   The Illinois Income Tax Act (“IITA”; 35 ILCS 5/101 et seq.) Section 208 provides a tax credit for
   residential real property taxes, specifically:
   Beginning with tax years ending on or after December 31, 1991, every individual taxpayer shall

IT 10-0027-GIL
October 26, 2010
Page 2
be entitled to a tax credit equal to 5% of real property taxes paid by such taxpayer during the
taxable year on the principal residence of the taxpayer. In the case of multi-unit or multi-use
structures and farm dwellings, the taxes on the taxpayer’s principal residence shall be that
portion of the total taxes which is attributable to such principal residence.
35 ILCS 5/208.
Your letter is correct in that there are situations when married couples may have two primary
residences during the tax year. The Illinois Department of Revenue (hereinafter “IDOR”) addresses
such situations in its Publication 108, Illinois Property Tax Credit. On page 2 of this Publication in the
second paragraph under General Information it states
You must own your residence in order to take this credit. If you and your spouse each have a
principal residence or if you had two principal residences during the tax year due to the sale of
your home, you may claim the tax paid on both residences when figuring this credit.
For your convenience, enclosed is a copy of Publication 108. Please be advised that IDOR does not
require taxpayers to file separately when claiming the property tax credit for two different residences.
However, taxpayers may be asked by IDOR to provide documentation verifying that the taxpayers
owned and paid property taxes on both “primary” residences during the tax year(s) at issue.
As stated above, this is a general information letter which does not constitute a statement of policy
that either applies, interprets or prescribes tax law. It is not binding on the Department. Should you
have additional questions, please do not hesitate to contact our office.

Sincerely,

Heidi Scott
Associate Counsel -- Income Tax