SB3774 102ND GENERAL ASSEMBLY

LRB102 24028 HLH 33242 b

102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB3774

Introduced 1/21/2022, by Sen. Omar Aquino

SYNOPSIS AS INTRODUCED:

35 ILCS 5/212
35 ILCS 5/232 new

Amends the Illinois Income Tax Act. Provides that the earned income tax credit shall be: (i) 20% of the federal tax credit for each taxable year beginning on or after January 1, 2023 and prior to January 1, 2024; (ii) 22% of the federal tax credit for each taxable year beginning on or after January 1, 2024 and prior to January 1, 2025; and (iii) 25% of the federal tax credit for each taxable year beginning on or after January 1 2025. Provides that the earned income tax credit is available to persons who have attained the age of 18 but have not yet attained the age of 25 and to persons who are 65 years of age or older, without regard to any age requirements that would otherwise apply to individuals without a qualifying child under federal Internal Revenue Code. Extends the earned income tax credit to individuals filing a return using an individual taxpayer identification number (ITIN). Creates a credit for child dependent tax credit that shall be not less than $600 when combined with the taxpayer's earned income tax credit. 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 changing Section 212 and by adding Section 232 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 and beginning prior to January 1, 2023, (vi) 20% of the federal tax credit for each taxable year beginning on or after January 1, 2023 and prior to January 1, 2024, (vii) 22% of the federal tax credit for each taxable year beginning on or after January 1, 2024 and prior to January 1, 2025, and (viii) 25% of the federal tax credit for each taxable year beginning on or after January 1 2025.

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.

(b-5) For taxable years beginning on or after January 1, 2023, each individual taxpayer who has attained the age of 18 during the taxable year but has not yet attained the age of 25 is entitled to the credit under paragraph (a) based on the federal tax credit for which they would have been eligible without regard to any age requirements that would otherwise apply to individuals without a qualifying child in Section 32(c)(1)(A)(ii) of the federal Internal Revenue Code.

(b-10) For taxable years beginning on or after January 1, 2023, each individual taxpayer who has attained the age of 65 or older during the taxable year is entitled to the credit under paragraph (a) based on the federal tax credit for which they would have been eligible without regard to any age requirements that would otherwise apply to individuals without a qualifying child in Section 32(c)(1)(A)(ii) of the federal Internal Revenue Code.

(b-15) For taxable years beginning on or after January 1, 2023, each individual taxpayer filing a return using an individual taxpayer identification number (ITIN) as prescribed under Section 6109 of the 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) based on the federal tax credit for which they would have been eligible without applying the restrictions regarding social security numbers in Section 32(m) of the federal Internal Revenue Code.

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

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

(35 ILCS 5/232 new)

Sec. 232. Child dependent tax credit.

(a) For each taxable year beginning on or after January 1, 2024, 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 not less than $600, except as otherwise provided by this Section.

(b) The credit amount allowed shall be not less than $600 regardless of the number of qualified dependents the taxpayer has. 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 less than $600, then 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.

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

(3) For each taxable year beginning on or after January 1, 2025, if the credit amount allowed pursuant to Section 212 is zero dollars, the credit amount allowed pursuant to this section shall be $600.

(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) 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; and

(2) for each taxable year beginning on or after January 1, 2025, 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.

"Qualified dependent" means a child who is under the age of 17 and for whom the taxpayer is allowed an additional exemption under Section 204 during the taxable year in which the credit is claimed.

(d) For taxable years beginning on or after January 1, 2023, if the amount allowable as a credit under this Section exceeds the tax liability computed under this Act for the taxable year, then the excess 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.

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

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