SB1836 103RD GENERAL ASSEMBLY

LRB103 29606 HLH 56001 b

103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB1836

Introduced 2/9/2023, by Sen. Elgie R. Sims, Jr.

SYNOPSIS AS INTRODUCED:

35 ILCS 5/234 new

Amends the Illinois Income Tax Act. Creates an income tax credit for individual taxpayers who rent a dwelling in Illinois for use as their principal place of residence. Provides that the credit shall be equal to 5% of the documented rental costs paid by such taxpayer during the taxable year on that dwelling. 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 234 as follows:

(35 ILCS 5/234 new)

Sec. 234. Tax credit for residential rental payments.

(a) Beginning with tax years ending on or after December 31, 2023, every individual taxpayer who rents a dwelling in Illinois for use as the individual's principal place of residence shall be entitled to a tax credit equal to 5% of the documented rental costs paid by the taxpayer during the taxable year on that dwelling.

(b) To qualify for the credit under this Section, the taxpayer must meet the following requirements for the tax year in which the taxpayer is claiming the credit provided by this Section:

(1) the taxpayer must have resided in Illinois for at least 183 days;

(2) the taxpayer's federal adjusted gross income must not exceed 200% of the poverty guidelines updated periodically in the Federal Register by the United States Department of Health and Human Services under the authority of 42 U.S.C. 9902(2);

(3) the total rental payments on the taxpayer's principal place of residence during the taxable year must exceed 30% of the taxpayer's federal adjusted gross income; and

(4) the taxpayer must not be claimed as a dependent on someone else's tax return.

(c) The credit provided by this Section does not apply to an individual who rents a dwelling that is exempt from Illinois property taxes.

(d) The Department may establish by rule:

(1) a maximum dollar amount of the credit, which may vary by regions of the State, based on fair market rents determined by the U.S. Department of Housing and Urban Development for purposes of the housing choice voucher program;

(2) the requirements by which the taxpayer shall document rental payments; and

(3) any schedules for forms necessary to meet the requirements of this Section.

(e) 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 income tax liability for the applicable tax year, then the excess credit shall be refunded to the taxpayer.

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

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