Drake Tax - Illinois EF Message 0247 - 1120-S/1065 Apportionment Formula

Article #: 18990

Last Updated: April 23, 2026

 

Tags: Drake Tax1120S

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Illinois EF Message 0247 is generated when one of the following conditions exists on either Form IL-1065 or IL-1120-ST (in View/Print mode): 

  • On page 2, Step 5, Line 35, Box B is marked, and Step 6, Line 40 is greater than zero, but no apportionment formula is selected on page 1, Step 1, Line E

  • On page 2, Step 5, Line 35, Box A is marked, and an apportionment formula is selected on page 1, Step 1, Line E

Resolution

To resolve this EF Message, either select an apportionment formula or remove apportionment entries.

Apportionment Formula

To select an apportionment formula, follow these steps: 

  1. Go to IL screen INFO.

  2. On Step 1, Line E Apportionment Formulas, select one of the following:

    • F - Financial organization

    • T - Transportation company

    • R - Federally regulated exchange

    • S - Sales company

  3. Recalculate the return.

Remove Apportionment

To remove the apportionment information from the return, delete your entries on the APPT screen (on the States tab) and/or on IL screen NB.

Common Issues

  • Line E (Special Apportionment) is rarely used.

    • Complete Line E only if the entity qualifies for a special apportionment formula. Most S corporations and partnerships, including service providers, use the standard Illinois apportionment method and should leave this line blank.

  • Service providers must include revenue in the sales factor.

    • Attorneys, CPAs, and other service providers are treated as having “sales of services” for apportionment purposes. Illinois uses market-based sourcing, so receipts are included in the Illinois numerator to the extent the client receives the benefit in Illinois, regardless of where the work is performed (86 Ill. Adm. Code 100.3370). These businesses use the standard apportionment method and should not select a special apportionment formula on Line E.

  • Line 35B requires completion of Lines 40–42.

    • If Line 35, Box B is checked (multi-state activity), Illinois expects the sales factor (Lines 40–42) to be completed, even when no special apportionment applies. Failure to complete these lines may result in a notice proposing 100% of income as Illinois income or disallowing losses.

  • Enter apportionment data in Drake Tax correctly.

    • Complete sales factor amounts on the APPT screen (primary entry) or IL screen, field NB. Entries indicating multi-state activity without corresponding apportionment data can trigger issues.

  • Do not confuse “no special apportionment” with “no apportionment.”

    • Even when Line E is blank, checking Line 35B still requires a completed sales factor.

  • Incomplete or inconsistent entries may trigger EF Message 0247.

    • Review both the APPT screen and IL screen NB for entries, as data in either location can trigger EF Message 0247 or result in Illinois notices.

  • Verify numerator and denominator accuracy.

    • Common errors include:

      • Excluding Illinois service receipts from the numerator

      • Including excluded or nonbusiness income in the denominator

      • Using gross instead of net sales

    • Review entries on the APPT screen to ensure accuracy.

  • Blank or zero sales factor is not valid when Line 35B is checked.

    • A reasonable sales factor must be calculated and entered when apportionment applies.

More Information

Drake Tax - IL - 1065/1120-ST Line 35, Box A or B