HB1078 103RD GENERAL ASSEMBLY

LRB103 05221 SPS 50237 b

103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB1078

Introduced 1/12/2023, by Rep. Mark L. Walker

SYNOPSIS AS INTRODUCED:

35 ILCS 5/240 new

Amends the Illinois Income Tax Act. Provides for a credit for taxpayers who hire full-time employees to fill positions at a location in a county with fewer than 250,000 inhabitants. Effective immediately.

A BILL FOR

AN ACT concerning revenue.

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

Section 5. The Illinois Income Tax Act is amended by adding Section 240 as follows:

(35 ILCS 5/240 new)

Sec. 240. Credit for full-time employees in a county with fewer than 250,000 inhabitants.

(a) For taxable years beginning on or after January 1, 2023, each taxpayer that hires a full-time employee to fill a position at a location in a county in the State with fewer than 250,000 inhabitants is entitled to a credit against the taxes imposed by subsections (a) and (b) of Section 201 of this Act in an amount not to exceed $5,000 per eligible employee. The credit may be taken for the taxable year in which the employee is hired by the taxpayer and for the next taxable year if the employee remains employed with that taxpayer in the next taxable year. The amount of the credit shall be $5,000 in each taxable year, multiplied by a fraction the numerator of which is the number of days the employee is employed by the taxpayer during the taxable year and the denominator of which is 365.

(b) For partners, shareholders of Subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for purposes of federal and State income taxation, there shall be allowed a credit under this Section to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and Subchapter S of the Internal Revenue Code.

(c) In no event shall a credit under this Section reduce the taxpayer's liability to less than zero. If the amount of the credit exceeds the tax liability for the year, the excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit year. The tax credit shall be applied to the earliest year for which there is a tax liability. If there are credits for more than one year that are available to offset a liability, the earlier credit shall be applied first.

(d) As used in this Section, "full-time employee" means an individual who is employed for consideration for at least 35 hours each week or who renders any other standard of service generally accepted by industry custom or practice as full-time employment. An individual for whom a W-2 is issued by a Professional Employer Organization (PEO) is a full-time employee if employed in the service of the taxpayer for consideration for at least 35 hours each week or renders to the taxpayer any other standard of service generally accepted by industry custom or practice as full-time employment.

(e) This Section is exempt from the provisions of Section 250.

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