94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
HB1566


 
Introduced 2/14/2005, by Rep. Carolyn H. Krause
 
SYNOPSIS AS INTRODUCED:
 		













35 ILCS 5/216 new










    Amends the Illinois Income Tax Act. Allows a tax credit for employer taxpayers who, during the taxable year,  increase the number of employees and provide health benefits  to all their employees.  Provides that the amount of the credit is $500 for each new employee added. Provides that the credit may not be carried forward  or  back and may not reduce the taxpayer's
liability to less than zero. Provides that it is a business offense, subject to a fine of not less than $5,000, for a taxpayer to intentionally manipulate the number of employees for the purpose of obtaining the credit. Effective immediately.
















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FISCAL NOTE ACT MAY APPLY
















 


 


A BILL FOR









 











HB1566

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    AN ACT concerning revenue.

 
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    Be it enacted by the People of the State of Illinois,
 
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represented in the General Assembly:


 
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    Section 5. The Illinois Income Tax Act is amended  by adding 
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Section 216 as follows:
 
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    (35 ILCS 5/216  new)
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    Sec. 216. Job Creation and Benefits Tax Credit.
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    (a) For taxable years ending on or after December 31, 2005 
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and ending on or before December 30, 2011, each taxpayer who is 
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an eligible employer is entitled to a credit against the tax 
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imposed by subsections (a) and (b) of Section 201 in an amount 
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equal to $500 for each net new employee that the taxpayer hired 
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and granted health benefits to during the taxable year.
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    (b) As used in this Section:
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    "Eligible employer" means a taxpayer that:
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        (1) pays State income taxes;
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        (2) withholds State income taxes from employees based 
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    in the State of Illinois;
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        (3) has a positive number of net new employees; and
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        (4) offers health benefits to all of its employees and 
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    pays 80% or more of the costs of the benefits.
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    "Health benefits" means benefits that conform to the 
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mandates set forth in Article XX of the Illinois Insurance 
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Code.
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    "Net new employees" means the number of Illinois-based 
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employees on the taxpayer's withholding rolls on the last day 
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of the current taxable year less the number of Illinois-based 
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employees on the taxpayer's withholding rolls on the last day 
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of the immediately preceding taxable year.
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    "Taxpayer" includes any affiliate of the taxpayer, which is 
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a business or other entity that is controlled, directly or 
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indirectly, by a trust or otherwise, by or for the benefit of 
 


 






HB1566
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owners or shareholders who beneficially or otherwise control, 
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directly or indirectly, by trust or otherwise, the employer 
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claiming the credit under this Section.

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    (c) If the taxpayer is a partnership or Subchapter S

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corporation,  the  credit  is  allowed  to  the  partners  or

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shareholders in accordance with the determination  of  income
and  
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distributive  share of income under Sections 702 and 704
and  
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Subchapter  S  of  the  Internal   Revenue   Code.
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    (d) The credit may not be carried forward  or  back.   In  no

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event shall a credit under this Section reduce the taxpayer's

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liability to less than zero.
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    (e) It is unlawful for a taxpayer to intentionally 
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manipulate the number of employees for the purpose of obtaining 
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a credit under this Section.  Each violation of this subsection 
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is a business offense subject to a fine of not less than 
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$5,000.
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    (f) The Department must adopt rules to administer this 
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Section.

 
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    Section 99. Effective date. This Act takes effect upon 
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becoming law.