HB5669 101ST GENERAL ASSEMBLY

  
  

 


 
101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB5669

 

Introduced , by Rep. Emanuel Chris Welch

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/212
35 ILCS 5/703  from Ch. 120, par. 7-703
820 ILCS 170/5  from Ch. 48, par. 2755
820 ILCS 170/10  from Ch. 48, par. 2760
820 ILCS 170/15  from Ch. 48, par. 2765
820 ILCS 170/17 new
820 ILCS 170/20  from Ch. 48, par. 2770

    Amends the Illinois Income Tax Act. Provides that the State earned income tax credit shall be: (i) 19% of the federal tax credit for each taxable year beginning on or after January 1, 2022 and beginning before January 1, 2023; and (ii) 20% of the federal credit for each taxable year beginning on or after January 1, 2023. Requires the Department of Revenue and certain institutions of higher education to provide certain notices concerning the federal and State earned income tax credits. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Income Tax Act is amended by
5changing Sections 212 and 703 as follows:
 
6    (35 ILCS 5/212)
7    Sec. 212. Earned income tax credit.
8    (a) With respect to the federal earned income tax credit
9allowed for the taxable year under Section 32 of the federal
10Internal Revenue Code, 26 U.S.C. 32, each individual taxpayer
11is entitled to a credit against the tax imposed by subsections
12(a) and (b) of Section 201 in an amount equal to (i) 5% of the
13federal tax credit for each taxable year beginning on or after
14January 1, 2000 and ending prior to December 31, 2012, (ii)
157.5% of the federal tax credit for each taxable year beginning
16on or after January 1, 2012 and ending prior to December 31,
172013, (iii) 10% of the federal tax credit for each taxable year
18beginning on or after January 1, 2013 and beginning prior to
19January 1, 2017, (iv) 14% of the federal tax credit for each
20taxable year beginning on or after January 1, 2017 and
21beginning prior to January 1, 2018, and (v) 18% of the federal
22tax credit for each taxable year beginning on or after January
231, 2018 and beginning before January 1, 2022, (vi) 19% of the

 

 

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1federal tax credit for each taxable year beginning on or after
2January 1, 2022 and beginning before January 1, 2023, and (vii)
320% of the federal credit for each taxable year beginning on or
4after January 1, 2023.
5    For a non-resident or part-year resident, the amount of the
6credit under this Section shall be in proportion to the amount
7of income attributable to this State.
8    (b) For taxable years beginning before January 1, 2003, in
9no event shall a credit under this Section reduce the
10taxpayer's liability to less than zero. For each taxable year
11beginning on or after January 1, 2003, if the amount of the
12credit exceeds the income tax liability for the applicable tax
13year, then the excess credit shall be refunded to the taxpayer.
14The amount of a refund shall not be included in the taxpayer's
15income or resources for the purposes of determining eligibility
16or benefit level in any means-tested benefit program
17administered by a governmental entity unless required by
18federal law.
19    (d) For taxable years beginning on or after January 1,
202021, each individual taxpayer age 18 to 24 is entitled to the
21credit under paragraph (a) without regard to the requirement
22under Section 32(c)(1)(A)(ii) of the federal Internal Revenue
23Code that the individual taxpayer without a qualifying child
24have attained the age of 25.
25    (e) For taxable years beginning on or after January 1,
262022, each individual taxpayer filing a return using an

 

 

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1individual tax identification number as prescribed under
2Section 6109 of the federal Internal Revenue Code, other than a
3Social Security number issued pursuant to Section 205(c)(2)(A)
4of the Social Security Act, is entitled to the credit under
5paragraph (a) without regard to the restrictions under Section
632(m) of the federal Internal Revenue Code.
7    (c) This Section is exempt from the provisions of Section
8250.
9(Source: P.A. 100-22, eff. 7-6-17.)
 
10    (35 ILCS 5/703)  (from Ch. 120, par. 7-703)
11    Sec. 703. Information statement. Every employer required
12to deduct and withhold tax under this Act from compensation of
13an employee, or who would have been required so to deduct and
14withhold tax if the employee's withholding exemption were not
15in excess of the basic amount in Section 204(b), shall furnish
16in duplicate to each such employee in respect of the
17compensation paid by such employer to such employee during the
18calendar year on or before January 31 of the succeeding year,
19or, if his employment is terminated before the close of such
20calendar year, on the date on which the last payment of
21compensation is made, a written statement in such form as the
22Department may by regulation prescribe showing the amount of
23compensation paid by the employer to the employee, the amount
24deducted and withheld as tax, and such other information as the
25Department shall prescribe. A copy of such statement shall be

 

 

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1filed by the employee with his return for his taxable year to
2which it relates (as determined under Section 601(b)(1)).
3Beginning January 1, 2021, every employer shall include with
4such statement information as the Department may specify
5regarding the earned income credit allowed under Section 212 of
6this Act.
7(Source: P.A. 97-507, eff. 8-23-11.)
 
8    Section 10. The Earned Income Tax Credit Information Act is
9amended by changing Sections 5, 10, 15, and 20 and by adding
10Section 17 as follows:
 
11    (820 ILCS 170/5)  (from Ch. 48, par. 2755)
12    Sec. 5. Declaration of public policy. In order to alleviate
13the tax burden of low-income persons in Illinois who have
14earned income and support one or more dependent children, the
15State should facilitate the furnishing of information to such
16persons about the availability of the federal and State earned
17income tax credit so that eligible taxpayers may claim that
18credit on their federal and State income tax returns. It is the
19intent of this Act to offer the most cost-effective assistance
20to eligible taxpayers through notices provided by their
21employers and by State government.
22(Source: P.A. 100-201, eff. 8-18-17.)
 
23    (820 ILCS 170/10)  (from Ch. 48, par. 2760)

 

 

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1    Sec. 10. Definitions. In this Act:
2    (a) "Employer" means any Illinois employer who is subject
3to and is required to provide unemployment insurance to his or
4her employees, under the Unemployment Insurance Act.
5    (b) "Employee" means any person who is covered by
6unemployment insurance by his or her employer, pursuant to the
7Unemployment Insurance Act.
8    (c) "Institution of higher learning" has the same meaning
9as defined in Section 10 of the Higher Education Student
10Assistance Act.
11(Source: P.A. 87-598.)
 
12    (820 ILCS 170/15)  (from Ch. 48, par. 2765)
13    Sec. 15. Notification by employer.
14    (a) An employer shall be required to notify all employees
15that they may be eligible for the federal and State earned
16income tax credits credit and may either apply for the credit
17on their tax returns or receive the credit in advance payments
18during the year. The employer shall not be required to notify
19any employee who receives gross wages from that employer that
20exceed the maximum amount that may qualify for the federal or
21State earned income tax credit.
22    (b) The employer shall provide the notification required by
23subsection (a) of this Section by giving or mailing to the
24employee:
25        (1) for the federal earned income tax credit, any

 

 

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1    notice available from the Internal Revenue Service for this
2    purpose, including, but not limited to, the Notice of a
3    Possible Federal Tax Refund Due to the Earned Income Credit
4    (EIC); or
5        (2) for the State earned income tax credit any notice
6    available from the Department of Revenue for this purpose;
7    or
8        (2) any notice created by the employer, as long as it
9    contains substantially the same language as either or both
10    of the following: (1) the either or both notices described
11    in paragraphs paragraph (1) and (2) of this subsection; or
12    (2) the notices described in in subsections subsection (a)
13    and (c) of Section 20.
14    (c) The notice prescribed in this Section shall be
15furnished within one week before or after, or at the same time,
16that the employer provides a Form W-2 to any employee covered
17by this Act.
18(Source: P.A. 87-598.)
 
19    (820 ILCS 170/17 new)
20    Sec. 17. Notification by institution of higher learning.
21    (a) An institution of higher learning shall be required to
22notify all students that they or their parent or guardian may
23be eligible for the federal and State earned income tax credits
24and may apply for the credits on their tax returns.
25    (b) The employer shall provide the notification required by

 

 

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1subsection (a) of this Section by giving, mailing, or providing
2by electronic communication to the student:
3        (1) for the federal earned income tax credits, any
4    notice available from the Internal Revenue Service for this
5    purpose, including, but not limited to, the Notice of a
6    Possible Federal Tax Refund Due to the Earned Income Credit
7    (EIC); and
8        (2) for the State earned income tax credit any notice
9    available from the Illinois Department of Revenue for this
10    purpose; or
11        (3) any notice created by the institution of higher
12    learning, as long as it contains substantially the same
13    language as the notices described in paragraphs (1) and (2)
14    of this subsection or in subsections (a) and (c) of Section
15    20.
16    (c) The notice prescribed in this Section shall be
17furnished after January 1 and no later than February 15 of each
18year.
 
19    (820 ILCS 170/20)  (from Ch. 48, par. 2770)
20    Sec. 20. Language of notice.
21    (a) The notice furnished to employers or created by
22employers to notify their employees about the availability of
23the federal earned income tax credit shall state as follows:
24        IF YOU EARNED LESS THAN $....... LAST YEAR AND HAVE AT
25    LEAST ONE CHILD, YOU MAY BE ELIGIBLE TO RECEIVE A TAX

 

 

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1    CREDIT FROM THE FEDERAL GOVERNMENT. THE TAX CREDIT MAY BE A
2    REFUND FROM THE FEDERAL GOVERNMENT FOR AS MUCH AS $.....
3    EVEN IF YOU DO NOT OWE FEDERAL TAXES, YOU MUST FILE A TAX
4    RETURN TO RECEIVE THE EARNED INCOME TAX CREDIT. BE SURE TO
5    FILL OUT THE EARNED INCOME TAX CREDIT FORM IN THE TAX
6    RETURN BOOKLET.
7    (b) The notice furnished by employers shall be updated
8annually in the appropriate blanks to reflect the maximum
9earned income tax credit and the maximum earnings to which such
10tax credit shall apply, as determined by the federal
11government.
12    (c) The notice furnished to employers or created by
13employers to notify their employees about the availability of
14the State earned income tax credit shall include language
15provided annually by the Department of Revenue.
16    (d) The Department of Revenue shall annually, prior to
17December 31, publish the language required to be provided by
18employers and institutions of higher learning in this Section
19and Section 17.
20(Source: P.A. 87-598.)
 
21    Section 99. Effective date. This Act takes effect upon
22becoming law.