Illinois 'Tax Deduction' for Dividends from Abbvie, Abbott Labs, Caterpillar and Walgreens Boots Alliance

As tax time nears and you begin to gather your tax documents, you may want to look closer at your dividends for the year. If you are an Illinois resident, you may be permitted to subtract certain dividends from specific Illinois companies. Under Illinois law, dividends you receive from a corporation that conducts business in a foreign trade zone and is designated a “High Impact Business” are eligible for the subtraction modification from Illinois base income.

Over the past few years, I have worked with a number of clients who received dividends from companies that qualify for the dividend subtraction in Illinois.  Depending on the total dividend distribution, this subtraction can be a sizable reduction in Illinois State Income Taxes, especially for shareholders who may have received stock through their employment with the companies.

Currently, I am aware of the following 4 companies that have published letters to their shareholders notifying them of the potential dividend subtraction for Illinois in the past. Below are the most current letters online.

Abbott Laboratories (Tax year 2020 letter)

AbbVie Inc. (Tax year 2020 letter)

Caterpillar Inc (Tax year 2020 letter)

Walgreens Boots Alliance, Inc. (Tax year 2019 letter)

There may be other qualifying companies in Illinois although it is best to receive a letter from the company if you decide to utilize the dividend subtraction on your income tax return.  If you believe you have received dividends from a qualifying company in the past 3 years, you may want to determine if filing an amended Illinois Income Tax Return is worthwhile.

If you have any questions about tax and estate planning, please feel free to contact Glick and Trostin, LLC at 312-346-8258.

Disclaimer: The materials on this website are provided for informational purposes only and do not constitute legal advice.  Transmission of the information is not intended to create, and receipt does not constitute, an attorney-client relationship between any attorney and any other person, group or entity. No representations or warranties whatsoever, express or implied are given as to the accuracy or applicability of the information contained herein.  No one should rely upon the information contained herein as constituting legal advice.  The information may be modified or rendered incorrect by future legislative or judicial developments and may not be applicable to any individual reader's facts and circumstances.

New Year's Resolution - Create an Estate Plan

As the dust settles on 2020 and we begin to prepare for what hopes to be a better 2021, many of us will make the annual New Year's Resolution.  Most of the resolutions will deal with improving ourselves in numerous ways.  The motivation for many of these goals is to take care of yourself and your loved ones.  

One goal to set for 2021 is to make sure you have an estate plan in place. This may consist of drafting a will or simply reviewing beneficiaries on your accounts.   Too often, people push this process off until it is too late and their family is left attempting to figure out how matters are to be sorted.

A recent 2020 Q4 Wells Fargo/Gallop Investor and Retirement Optimism Index reports that close to half of the surveyed investors did not have a will or an estate plan in place. The majority of those with some type of plan were over the age of 65.  That leaves a substantial number of families without any type of estate plan in place. 

Estate planning does not have to be difficult or overwhelming.  The fact is that not having some simple documents in place such as a Power of Attorney for Health care or for Property can create a much more expensive problem later on. 

Making a New Year's Resolution to create an estate plan is important and doable. By accomplishing this resolution, you can rest easier and help protect your interests and wishes for your family. 

If you have any questions about preparing an estate plan, please feel free to contact Glick and Trostin, LLC at 312-346-8258.

Disclaimer: The materials on this website are provided for informational purposes only and do not constitute legal advice. Transmission of the information is not intended to create, and receipt does not constitute, an attorney-client relationship between any attorney and any other person, group or entity. No representations or warranties whatsoever, express or implied are given as to the accuracy or applicability of the information contained herein. No one should rely upon the information contained herein as constituting legal advice. The information may be modified or rendered incorrect by future legislative or judicial developments and may not be applicable to any individual reader's facts and circumstances.