SB2184 102ND GENERAL ASSEMBLY

LRB102 14650 HLH 20003 b

102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB2184

Introduced 2/26/2021, by Sen. Elgie R. Sims, Jr.

SYNOPSIS AS INTRODUCED:

35 ILCS 5/212
35 ILCS 5/212.1 new
820 ILCS 170/5	from Ch. 48, par. 2755

Amends the Illinois Income Tax Act. Provides that an individual taxpayer age 65 or older is entitled to the earned income tax credit without regard to the requirement under the federal Internal Revenue Code that an individual taxpayer without a qualifying child has not attained age 65. Provides that an individual taxpayer age 18 to 24 is entitled to the earned income tax credit without regard to the requirement under the federal Internal Revenue Code that an individual taxpayer without a qualifying child has attained the age of 25. Provides that certain taxpayers using individual tax identification numbers are entitled to the earned income tax credit. Creates the eligible dependent tax credit. Provides that the total amount of credits between the eligible dependent tax credit and the earned income tax credit may not be less than $600. Amends the Earned Income Tax Credit Information Act to delete certain provisions concerning dependent children. Effective immediately.

FISCAL NOTE ACT MAY APPLY

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 changing Section 212 and by adding Section 212.1 as follows:

(35 ILCS 5/212)

Sec. 212. Earned income tax credit.

(a) With respect to the federal earned income tax credit allowed for the taxable year under Section 32 of the federal Internal Revenue Code, 26 U.S.C. 32, each individual taxpayer is entitled to a credit against the tax imposed by subsections (a) and (b) of Section 201 in an amount equal to (i) 5% of the federal tax credit for each taxable year beginning on or after January 1, 2000 and ending prior to December 31, 2012, (ii) 7.5% of the federal tax credit for each taxable year beginning on or after January 1, 2012 and ending prior to December 31, 2013, (iii) 10% of the federal tax credit for each taxable year beginning on or after January 1, 2013 and beginning prior to January 1, 2017, (iv) 14% of the federal tax credit for each taxable year beginning on or after January 1, 2017 and beginning prior to January 1, 2018, and (v) 18% of the federal tax credit for each taxable year beginning on or after January 1, 2018.

For a non-resident or part-year resident, the amount of the credit under this Section shall be in proportion to the amount of income attributable to this State.

(b) For taxable years beginning before January 1, 2003, in no event shall a credit under this Section reduce the taxpayer's liability to less than zero. For each taxable year beginning on or after January 1, 2003, 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. The amount of a refund shall not be included in the taxpayer's income or resources for the purposes of determining eligibility or benefit level in any means-tested benefit program administered by a governmental entity unless required by federal law.

(c) For taxable years beginning on or after January 1, 2021, each individual taxpayer age 65 or older is entitled to the credit under paragraph (a) without regard to the requirement under Section 32(c)(1)(A)(ii) of the federal Internal Revenue Code that the individual taxpayer without a qualifying child has not attained age 65.

(d) For taxable years beginning on or after January 1, 2021, each individual taxpayer age 18 to 24 is entitled to the credit under paragraph (a) without regard to the requirement under Section 32(c)(1)(A)(ii) of the federal Internal Revenue Code that the individual taxpayer without a qualifying child has attained the age of 25.

(e) For taxable years beginning on or after January 1, 2021, each individual taxpayer filing a return using an individual tax identification number as prescribed under Section 6109 of the federal Internal Revenue Code, other than a Social Security number issued pursuant to Section 205(c)(2)(A) of the Social Security Act, is entitled to the credit under paragraph (a) without regard to the restrictions under Section 32(m) of the federal Internal Revenue Code.

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

(Source: P.A. 100-22, eff. 7-6-17.)

(35 ILCS 5/212.1 new)

Sec. 212.1. Eligible dependent tax credit.

(a) For each taxable year beginning on or after January 1, 2022, there shall be allowed against the tax imposed by subsections (a) and (b) of Section 201, to each eligible caregiver, an eligible dependent tax credit in an amount equal to no less than $600, except as otherwise provided by this Section.

(b) The credit amount allowed shall be not less than $600 regardless of how many qualified dependents the eligible caregiver provides care for. The credit amount allowed per taxpayer per taxable year shall be determined as follows:

(1) If the credit amount allowed pursuant to Section 212 is zero dollars, the credit amount allowed pursuant to this Section shall be $600.

(2) If the credit amount allowed pursuant to Section 212 is more than zero dollars and less than $600, the credit amount allowed pursuant to this Section shall be an amount such that the total amount of credit allowed to a taxpayer under both this Section and Section 212 is equal to $600.

(3) If the credit amount allowed pursuant to Section 212 is $600 or more, the credit amount allowed pursuant to this Section shall be zero.

(c) For purposes of this Section:

"Eligible caregiver" means a taxpayer who provides uncompensated care for a qualified dependent and who would otherwise meet the requirements of an eligible individual pursuant to Section 212, except as follows:

(1) An eligible caregiver is not required to have qualifying earned income as defined under Section 32(c)(2)(A) and (B) of the federal Internal Revenue Code for the taxable year.

(2) The eligible caregiver or the qualified dependent, or both, may have a taxpayer identification number that is a social security number or is a federal individual taxpayer identification number.

"Qualified dependent" means any of the following:

(1) A child who is under the age of 6 and for whom the taxpayer is allowed an additional exemption under Section 204 during the taxable year in which the credit is claimed.

(2) A dependent for whom a deduction is allowed under Section 151 of the Internal Revenue Code, relating to allowance of deductions for personal exemptions, 70 years of age or older during the taxable year in which the credit is claimed.

(3) An individual described in Section 21(b)(1)(B) of the Internal Revenue Code, modified so that the reference to subsection (b)(1) shall not apply.

(4) An individual described in Section 21(b)(1)(C) of the Internal Revenue Code.

(c) Where the qualifying dependent is an individual described in subsection (c)(2)(B), the tax return claiming the credit allowed by this Section shall include the name, year of birth, and taxpayer identification number of that qualifying dependent.

(d) For taxable years beginning on or after January 1, 2022, if the amount allowable as a credit under this Section exceeds the tax liability computed under this part for the taxable year, the excess shall be credited against other amounts due, if any, and the balance, if any, shall be refunded to the taxpayer.

(e) The Department of Revenue may adopt rules necessary or appropriate to carry out the purposes of this Section.

(f) The amount of a refund shall not be included in the taxpayer's income or resources for the purposes of determining eligibility or benefit level in any means-tested benefit program administered by a governmental entity unless required by federal law.

Section 10. The Earned Income Tax Credit Information Act is amended by changing Section 5 as follows:

(820 ILCS 170/5) (from Ch. 48, par. 2755)

Sec. 5. Declaration of public policy. In order to alleviate the tax burden of low-income persons in Illinois who have earned income and support one or more dependent children, the State should facilitate the furnishing of information to such persons about the availability of the federal earned income tax credit so that eligible taxpayers may claim that credit on their federal income tax returns. It is the intent of this Act to offer the most cost-effective assistance to eligible taxpayers through notices provided by their employers and by State government.

(Source: P.A. 100-201, eff. 8-18-17.)

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