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1 | | subsection (d-1): |
2 | | (1) In the case of an individual, trust or estate, for |
3 | | taxable years
ending prior to July 1, 1989, an amount |
4 | | equal to 2 1/2% of the taxpayer's
net income for the |
5 | | taxable year. |
6 | | (2) In the case of an individual, trust or estate, for |
7 | | taxable years
beginning prior to July 1, 1989 and ending |
8 | | after June 30, 1989, an amount
equal to the sum of (i) 2 |
9 | | 1/2% of the taxpayer's net income for the period
prior to |
10 | | July 1, 1989, as calculated under Section 202.3, and (ii) |
11 | | 3% of the
taxpayer's net income for the period after June |
12 | | 30, 1989, as calculated
under Section 202.3. |
13 | | (3) In the case of an individual, trust or estate, for |
14 | | taxable years
beginning after June 30, 1989, and ending |
15 | | prior to January 1, 2011, an amount equal to 3% of the |
16 | | taxpayer's net
income for the taxable year. |
17 | | (4) In the case of an individual, trust, or estate, |
18 | | for taxable years beginning prior to January 1, 2011, and |
19 | | ending after December 31, 2010, an amount equal to the sum |
20 | | of (i) 3% of the taxpayer's net income for the period prior |
21 | | to January 1, 2011, as calculated under Section 202.5, and |
22 | | (ii) 5% of the taxpayer's net income for the period after |
23 | | December 31, 2010, as calculated under Section 202.5. |
24 | | (5) In the case of an individual, trust, or estate, |
25 | | for taxable years beginning on or after January 1, 2011, |
26 | | and ending prior to January 1, 2015, an amount equal to 5% |
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1 | | of the taxpayer's net income for the taxable year. |
2 | | (5.1) In the case of an individual, trust, or estate, |
3 | | for taxable years beginning prior to January 1, 2015, and |
4 | | ending after December 31, 2014, an amount equal to the sum |
5 | | of (i) 5% of the taxpayer's net income for the period prior |
6 | | to January 1, 2015, as calculated under Section 202.5, and |
7 | | (ii) 3.75% of the taxpayer's net income for the period |
8 | | after December 31, 2014, as calculated under Section |
9 | | 202.5. |
10 | | (5.2) In the case of an individual, trust, or estate, |
11 | | for taxable years beginning on or after January 1, 2015, |
12 | | and ending prior to July 1, 2017, an amount equal to 3.75% |
13 | | of the taxpayer's net income for the taxable year. |
14 | | (5.3) In the case of an individual, trust, or estate, |
15 | | for taxable years beginning prior to July 1, 2017, and |
16 | | ending after June 30, 2017, an amount equal to the sum of |
17 | | (i) 3.75% of the taxpayer's net income for the period |
18 | | prior to July 1, 2017, as calculated under Section 202.5, |
19 | | and (ii) 4.95% of the taxpayer's net income for the period |
20 | | after June 30, 2017, as calculated under Section 202.5. |
21 | | (5.4) In the case of an individual, trust, or estate, |
22 | | for taxable years beginning on or after July 1, 2017, an |
23 | | amount equal to 4.95% of the taxpayer's net income for the |
24 | | taxable year. |
25 | | (6) In the case of a corporation, for taxable years
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26 | | ending prior to July 1, 1989, an amount equal to 4% of the
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1 | | taxpayer's net income for the taxable year. |
2 | | (7) In the case of a corporation, for taxable years |
3 | | beginning prior to
July 1, 1989 and ending after June 30, |
4 | | 1989, an amount equal to the sum of
(i) 4% of the |
5 | | taxpayer's net income for the period prior to July 1, |
6 | | 1989,
as calculated under Section 202.3, and (ii) 4.8% of |
7 | | the taxpayer's net
income for the period after June 30, |
8 | | 1989, as calculated under Section
202.3. |
9 | | (8) In the case of a corporation, for taxable years |
10 | | beginning after
June 30, 1989, and ending prior to January |
11 | | 1, 2011, an amount equal to 4.8% of the taxpayer's net |
12 | | income for the
taxable year. |
13 | | (9) In the case of a corporation, for taxable years |
14 | | beginning prior to January 1, 2011, and ending after |
15 | | December 31, 2010, an amount equal to the sum of (i) 4.8% |
16 | | of the taxpayer's net income for the period prior to |
17 | | January 1, 2011, as calculated under Section 202.5, and |
18 | | (ii) 7% of the taxpayer's net income for the period after |
19 | | December 31, 2010, as calculated under Section 202.5. |
20 | | (10) In the case of a corporation, for taxable years |
21 | | beginning on or after January 1, 2011, and ending prior to |
22 | | January 1, 2015, an amount equal to 7% of the taxpayer's |
23 | | net income for the taxable year. |
24 | | (11) In the case of a corporation, for taxable years |
25 | | beginning prior to January 1, 2015, and ending after |
26 | | December 31, 2014, an amount equal to the sum of (i) 7% of |
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1 | | the taxpayer's net income for the period prior to January |
2 | | 1, 2015, as calculated under Section 202.5, and (ii) 5.25% |
3 | | of the taxpayer's net income for the period after December |
4 | | 31, 2014, as calculated under Section 202.5. |
5 | | (12) In the case of a corporation, for taxable years |
6 | | beginning on or after January 1, 2015, and ending prior to |
7 | | July 1, 2017, an amount equal to 5.25% of the taxpayer's |
8 | | net income for the taxable year. |
9 | | (13) In the case of a corporation, for taxable years |
10 | | beginning prior to July 1, 2017, and ending after June 30, |
11 | | 2017, an amount equal to the sum of (i) 5.25% of the |
12 | | taxpayer's net income for the period prior to July 1, |
13 | | 2017, as calculated under Section 202.5, and (ii) 7% of |
14 | | the taxpayer's net income for the period after June 30, |
15 | | 2017, as calculated under Section 202.5. |
16 | | (14) In the case of a corporation, for taxable years |
17 | | beginning on or after July 1, 2017, an amount equal to 7% |
18 | | of the taxpayer's net income for the taxable year. |
19 | | The rates under this subsection (b) are subject to the |
20 | | provisions of Section 201.5. |
21 | | (b-5) Surcharge; sale or exchange of assets, properties, |
22 | | and intangibles of organization gaming licensees. For each of |
23 | | taxable years 2019 through 2027, a surcharge is imposed on all |
24 | | taxpayers on income arising from the sale or exchange of |
25 | | capital assets, depreciable business property, real property |
26 | | used in the trade or business, and Section 197 intangibles (i) |
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1 | | of an organization licensee under the Illinois Horse Racing |
2 | | Act of 1975 and (ii) of an organization gaming licensee under |
3 | | the Illinois Gambling Act. The amount of the surcharge is |
4 | | equal to the amount of federal income tax liability for the |
5 | | taxable year attributable to those sales and exchanges. The |
6 | | surcharge imposed shall not apply if: |
7 | | (1) the organization gaming license, organization |
8 | | license, or racetrack property is transferred as a result |
9 | | of any of the following: |
10 | | (A) bankruptcy, a receivership, or a debt |
11 | | adjustment initiated by or against the initial |
12 | | licensee or the substantial owners of the initial |
13 | | licensee; |
14 | | (B) cancellation, revocation, or termination of |
15 | | any such license by the Illinois Gaming Board or the |
16 | | Illinois Racing Board; |
17 | | (C) a determination by the Illinois Gaming Board |
18 | | that transfer of the license is in the best interests |
19 | | of Illinois gaming; |
20 | | (D) the death of an owner of the equity interest in |
21 | | a licensee; |
22 | | (E) the acquisition of a controlling interest in |
23 | | the stock or substantially all of the assets of a |
24 | | publicly traded company; |
25 | | (F) a transfer by a parent company to a wholly |
26 | | owned subsidiary; or |
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1 | | (G) the transfer or sale to or by one person to |
2 | | another person where both persons were initial owners |
3 | | of the license when the license was issued; or |
4 | | (2) the controlling interest in the organization |
5 | | gaming license, organization license, or racetrack |
6 | | property is transferred in a transaction to lineal |
7 | | descendants in which no gain or loss is recognized or as a |
8 | | result of a transaction in accordance with Section 351 of |
9 | | the Internal Revenue Code in which no gain or loss is |
10 | | recognized; or |
11 | | (3) live horse racing was not conducted in 2010 at a |
12 | | racetrack located within 3 miles of the Mississippi River |
13 | | under a license issued pursuant to the Illinois Horse |
14 | | Racing Act of 1975. |
15 | | The transfer of an organization gaming license, |
16 | | organization license, or racetrack property by a person other |
17 | | than the initial licensee to receive the organization gaming |
18 | | license is not subject to a surcharge. The Department shall |
19 | | adopt rules necessary to implement and administer this |
20 | | subsection. |
21 | | (c) Personal Property Tax Replacement Income Tax.
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22 | | Beginning on July 1, 1979 and thereafter, in addition to such |
23 | | income
tax, there is also hereby imposed the Personal Property |
24 | | Tax Replacement
Income Tax measured by net income on every |
25 | | corporation (including Subchapter
S corporations), partnership |
26 | | and trust, for each taxable year ending after
June 30, 1979. |
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1 | | Such taxes are imposed on the privilege of earning or
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2 | | receiving income in or as a resident of this State. The |
3 | | Personal Property
Tax Replacement Income Tax shall be in |
4 | | addition to the income tax imposed
by subsections (a) and (b) |
5 | | of this Section and in addition to all other
occupation or |
6 | | privilege taxes imposed by this State or by any municipal
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7 | | corporation or political subdivision thereof. |
8 | | (d) Additional Personal Property Tax Replacement Income |
9 | | Tax Rates.
The personal property tax replacement income tax |
10 | | imposed by this subsection
and subsection (c) of this Section |
11 | | in the case of a corporation, other
than a Subchapter S |
12 | | corporation and except as adjusted by subsection (d-1),
shall |
13 | | be an additional amount equal to
2.85% of such taxpayer's net |
14 | | income for the taxable year, except that
beginning on January |
15 | | 1, 1981, and thereafter, the rate of 2.85% specified
in this |
16 | | subsection shall be reduced to 2.5%, and in the case of a
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17 | | partnership, trust or a Subchapter S corporation shall be an |
18 | | additional
amount equal to 1.5% of such taxpayer's net income |
19 | | for the taxable year. |
20 | | (d-1) Rate reduction for certain foreign insurers. In the |
21 | | case of a
foreign insurer, as defined by Section 35A-5 of the |
22 | | Illinois Insurance Code,
whose state or country of domicile |
23 | | imposes on insurers domiciled in Illinois
a retaliatory tax |
24 | | (excluding any insurer
whose premiums from reinsurance assumed |
25 | | are 50% or more of its total insurance
premiums as determined |
26 | | under paragraph (2) of subsection (b) of Section 304,
except |
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1 | | that for purposes of this determination premiums from |
2 | | reinsurance do
not include premiums from inter-affiliate |
3 | | reinsurance arrangements),
beginning with taxable years ending |
4 | | on or after December 31, 1999,
the sum of
the rates of tax |
5 | | imposed by subsections (b) and (d) shall be reduced (but not
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6 | | increased) to the rate at which the total amount of tax imposed |
7 | | under this Act,
net of all credits allowed under this Act, |
8 | | shall equal (i) the total amount of
tax that would be imposed |
9 | | on the foreign insurer's net income allocable to
Illinois for |
10 | | the taxable year by such foreign insurer's state or country of
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11 | | domicile if that net income were subject to all income taxes |
12 | | and taxes
measured by net income imposed by such foreign |
13 | | insurer's state or country of
domicile, net of all credits |
14 | | allowed or (ii) a rate of zero if no such tax is
imposed on |
15 | | such income by the foreign insurer's state of domicile.
For |
16 | | the purposes of this subsection (d-1), an inter-affiliate |
17 | | includes a
mutual insurer under common management. |
18 | | (1) For the purposes of subsection (d-1), in no event |
19 | | shall the sum of the
rates of tax imposed by subsections |
20 | | (b) and (d) be reduced below the rate at
which the sum of: |
21 | | (A) the total amount of tax imposed on such |
22 | | foreign insurer under
this Act for a taxable year, net |
23 | | of all credits allowed under this Act, plus |
24 | | (B) the privilege tax imposed by Section 409 of |
25 | | the Illinois Insurance
Code, the fire insurance |
26 | | company tax imposed by Section 12 of the Fire
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1 | | Investigation Act, and the fire department taxes |
2 | | imposed under Section 11-10-1
of the Illinois |
3 | | Municipal Code, |
4 | | equals 1.25% for taxable years ending prior to December |
5 | | 31, 2003, or
1.75% for taxable years ending on or after |
6 | | December 31, 2003, of the net
taxable premiums written for |
7 | | the taxable year,
as described by subsection (1) of |
8 | | Section 409 of the Illinois Insurance Code.
This paragraph |
9 | | will in no event increase the rates imposed under |
10 | | subsections
(b) and (d). |
11 | | (2) Any reduction in the rates of tax imposed by this |
12 | | subsection shall be
applied first against the rates |
13 | | imposed by subsection (b) and only after the
tax imposed |
14 | | by subsection (a) net of all credits allowed under this |
15 | | Section
other than the credit allowed under subsection (i) |
16 | | has been reduced to zero,
against the rates imposed by |
17 | | subsection (d). |
18 | | This subsection (d-1) is exempt from the provisions of |
19 | | Section 250. |
20 | | (e) Investment credit. A taxpayer shall be allowed a |
21 | | credit
against the Personal Property Tax Replacement Income |
22 | | Tax for
investment in qualified property. |
23 | | (1) A taxpayer shall be allowed a credit equal to .5% |
24 | | of
the basis of qualified property placed in service |
25 | | during the taxable year,
provided such property is placed |
26 | | in service on or after
July 1, 1984. There shall be allowed |
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1 | | an additional credit equal
to .5% of the basis of |
2 | | qualified property placed in service during the
taxable |
3 | | year, provided such property is placed in service on or
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4 | | after July 1, 1986, and the taxpayer's base employment
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5 | | within Illinois has increased by 1% or more over the |
6 | | preceding year as
determined by the taxpayer's employment |
7 | | records filed with the
Illinois Department of Employment |
8 | | Security. Taxpayers who are new to
Illinois shall be |
9 | | deemed to have met the 1% growth in base employment for
the |
10 | | first year in which they file employment records with the |
11 | | Illinois
Department of Employment Security. The provisions |
12 | | added to this Section by
Public Act 85-1200 (and restored |
13 | | by Public Act 87-895) shall be
construed as declaratory of |
14 | | existing law and not as a new enactment. If,
in any year, |
15 | | the increase in base employment within Illinois over the
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16 | | preceding year is less than 1%, the additional credit |
17 | | shall be limited to that
percentage times a fraction, the |
18 | | numerator of which is .5% and the denominator
of which is |
19 | | 1%, but shall not exceed .5%. The investment credit shall |
20 | | not be
allowed to the extent that it would reduce a |
21 | | taxpayer's liability in any tax
year below zero, nor may |
22 | | any credit for qualified property be allowed for any
year |
23 | | other than the year in which the property was placed in |
24 | | service in
Illinois. For tax years ending on or after |
25 | | December 31, 1987, and on or
before December 31, 1988, the |
26 | | credit shall be allowed for the tax year in
which the |
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1 | | property is placed in service, or, if the amount of the |
2 | | credit
exceeds the tax liability for that year, whether it |
3 | | exceeds the original
liability or the liability as later |
4 | | amended, such excess may be carried
forward and applied to |
5 | | the tax liability of the 5 taxable years following
the |
6 | | excess credit years if the taxpayer (i) makes investments |
7 | | which cause
the creation of a minimum of 2,000 full-time |
8 | | equivalent jobs in Illinois,
(ii) is located in an |
9 | | enterprise zone established pursuant to the Illinois
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10 | | Enterprise Zone Act and (iii) is certified by the |
11 | | Department of Commerce
and Community Affairs (now |
12 | | Department of Commerce and Economic Opportunity) as |
13 | | complying with the requirements specified in
clause (i) |
14 | | and (ii) by July 1, 1986. The Department of Commerce and
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15 | | Community Affairs (now Department of Commerce and Economic |
16 | | Opportunity) shall notify the Department of Revenue of all |
17 | | such
certifications immediately. For tax years ending |
18 | | after December 31, 1988,
the credit shall be allowed for |
19 | | the tax year in which the property is
placed in service, |
20 | | or, if the amount of the credit exceeds the tax
liability |
21 | | for that year, whether it exceeds the original liability |
22 | | or the
liability as later amended, such excess may be |
23 | | carried forward and applied
to the tax liability of the 5 |
24 | | taxable years following the excess credit
years. The |
25 | | credit shall be applied to the earliest year for which |
26 | | there is
a liability. If there is credit from more than one |
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1 | | tax year that is
available to offset a liability, earlier |
2 | | credit shall be applied first. |
3 | | (2) The term "qualified property" means property |
4 | | which: |
5 | | (A) is tangible, whether new or used, including |
6 | | buildings and structural
components of buildings and |
7 | | signs that are real property, but not including
land |
8 | | or improvements to real property that are not a |
9 | | structural component of a
building such as |
10 | | landscaping, sewer lines, local access roads, fencing, |
11 | | parking
lots, and other appurtenances; |
12 | | (B) is depreciable pursuant to Section 167 of the |
13 | | Internal Revenue Code,
except that "3-year property" |
14 | | as defined in Section 168(c)(2)(A) of that
Code is not |
15 | | eligible for the credit provided by this subsection |
16 | | (e); |
17 | | (C) is acquired by purchase as defined in Section |
18 | | 179(d) of
the Internal Revenue Code; |
19 | | (D) is used in Illinois by a taxpayer who is |
20 | | primarily engaged in
manufacturing, or in mining coal |
21 | | or fluorite, or in retailing, or was placed in service |
22 | | on or after July 1, 2006 in a River Edge Redevelopment |
23 | | Zone established pursuant to the River Edge |
24 | | Redevelopment Zone Act; and |
25 | | (E) has not previously been used in Illinois in |
26 | | such a manner and by
such a person as would qualify for |
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1 | | the credit provided by this subsection
(e) or |
2 | | subsection (f). |
3 | | (3) For purposes of this subsection (e), |
4 | | "manufacturing" means
the material staging and production |
5 | | of tangible personal property by
procedures commonly |
6 | | regarded as manufacturing, processing, fabrication, or
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7 | | assembling which changes some existing material into new |
8 | | shapes, new
qualities, or new combinations. For purposes |
9 | | of this subsection
(e) the term "mining" shall have the |
10 | | same meaning as the term "mining" in
Section 613(c) of the |
11 | | Internal Revenue Code. For purposes of this subsection
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12 | | (e), the term "retailing" means the sale of tangible |
13 | | personal property for use or consumption and not for |
14 | | resale, or
services rendered in conjunction with the sale |
15 | | of tangible personal property for use or consumption and |
16 | | not for resale. For purposes of this subsection (e), |
17 | | "tangible personal property" has the same meaning as when |
18 | | that term is used in the Retailers' Occupation Tax Act, |
19 | | and, for taxable years ending after December 31, 2008, |
20 | | does not include the generation, transmission, or |
21 | | distribution of electricity. |
22 | | (4) The basis of qualified property shall be the basis
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23 | | used to compute the depreciation deduction for federal |
24 | | income tax purposes. |
25 | | (5) If the basis of the property for federal income |
26 | | tax depreciation
purposes is increased after it has been |
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1 | | placed in service in Illinois by
the taxpayer, the amount |
2 | | of such increase shall be deemed property placed
in |
3 | | service on the date of such increase in basis. |
4 | | (6) The term "placed in service" shall have the same
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5 | | meaning as under Section 46 of the Internal Revenue Code. |
6 | | (7) If during any taxable year, any property ceases to
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7 | | be qualified property in the hands of the taxpayer within |
8 | | 48 months after
being placed in service, or the situs of |
9 | | any qualified property is
moved outside Illinois within 48 |
10 | | months after being placed in service, the
Personal |
11 | | Property Tax Replacement Income Tax for such taxable year |
12 | | shall be
increased. Such increase shall be determined by |
13 | | (i) recomputing the
investment credit which would have |
14 | | been allowed for the year in which
credit for such |
15 | | property was originally allowed by eliminating such
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16 | | property from such computation and, (ii) subtracting such |
17 | | recomputed credit
from the amount of credit previously |
18 | | allowed. For the purposes of this
paragraph (7), a |
19 | | reduction of the basis of qualified property resulting
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20 | | from a redetermination of the purchase price shall be |
21 | | deemed a disposition
of qualified property to the extent |
22 | | of such reduction. |
23 | | (8) Unless the investment credit is extended by law, |
24 | | the
basis of qualified property shall not include costs |
25 | | incurred after
December 31, 2018, except for costs |
26 | | incurred pursuant to a binding
contract entered into on or |
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1 | | before December 31, 2018. |
2 | | (9) Each taxable year ending before December 31, 2000, |
3 | | a partnership may
elect to pass through to its
partners |
4 | | the credits to which the partnership is entitled under |
5 | | this subsection
(e) for the taxable year. A partner may |
6 | | use the credit allocated to him or her
under this |
7 | | paragraph only against the tax imposed in subsections (c) |
8 | | and (d) of
this Section. If the partnership makes that |
9 | | election, those credits shall be
allocated among the |
10 | | partners in the partnership in accordance with the rules
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11 | | set forth in Section 704(b) of the Internal Revenue Code, |
12 | | and the rules
promulgated under that Section, and the |
13 | | allocated amount of the credits shall
be allowed to the |
14 | | partners for that taxable year. The partnership shall make
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15 | | this election on its Personal Property Tax Replacement |
16 | | Income Tax return for
that taxable year. The election to |
17 | | pass through the credits shall be
irrevocable. |
18 | | For taxable years ending on or after December 31, |
19 | | 2000, a
partner that qualifies its
partnership for a |
20 | | subtraction under subparagraph (I) of paragraph (2) of
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21 | | subsection (d) of Section 203 or a shareholder that |
22 | | qualifies a Subchapter S
corporation for a subtraction |
23 | | under subparagraph (S) of paragraph (2) of
subsection (b) |
24 | | of Section 203 shall be allowed a credit under this |
25 | | subsection
(e) equal to its share of the credit earned |
26 | | under this subsection (e) during
the taxable year by the |
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1 | | partnership or Subchapter S corporation, determined in
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2 | | accordance with the determination of income and |
3 | | distributive share of
income under Sections 702 and 704 |
4 | | and Subchapter S of the Internal Revenue
Code. This |
5 | | paragraph is exempt from the provisions of Section 250. |
6 | | (f) Investment credit; Enterprise Zone; River Edge |
7 | | Redevelopment Zone. |
8 | | (1) A taxpayer shall be allowed a credit against the |
9 | | tax imposed
by subsections (a) and (b) of this Section for |
10 | | investment in qualified
property which is placed in |
11 | | service in an Enterprise Zone created
pursuant to the |
12 | | Illinois Enterprise Zone Act or, for property placed in |
13 | | service on or after July 1, 2006, a River Edge |
14 | | Redevelopment Zone established pursuant to the River Edge |
15 | | Redevelopment Zone Act. For partners, shareholders
of |
16 | | Subchapter S corporations, and owners of limited liability |
17 | | companies,
if the liability company is treated as a |
18 | | partnership for purposes of
federal and State income |
19 | | taxation, there shall be allowed a credit under
this |
20 | | subsection (f) to be determined in accordance with the |
21 | | determination
of income and distributive share of income |
22 | | under Sections 702 and 704 and
Subchapter S of the |
23 | | Internal Revenue Code. The credit shall be .5% of the
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24 | | basis for such property. The credit shall be available |
25 | | only in the taxable
year in which the property is placed in |
26 | | service in the Enterprise Zone or River Edge Redevelopment |
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1 | | Zone and
shall not be allowed to the extent that it would |
2 | | reduce a taxpayer's
liability for the tax imposed by |
3 | | subsections (a) and (b) of this Section to
below zero. For |
4 | | tax years ending on or after December 31, 1985, the credit
|
5 | | shall be allowed for the tax year in which the property is |
6 | | placed in
service, or, if the amount of the credit exceeds |
7 | | the tax liability for that
year, whether it exceeds the |
8 | | original liability or the liability as later
amended, such |
9 | | excess may be carried forward and applied to the tax
|
10 | | liability of the 5 taxable years following the excess |
11 | | credit year.
The credit shall be applied to the earliest |
12 | | year for which there is a
liability. If there is credit |
13 | | from more than one tax year that is available
to offset a |
14 | | liability, the credit accruing first in time shall be |
15 | | applied
first. |
16 | | (2) The term qualified property means property which: |
17 | | (A) is tangible, whether new or used, including |
18 | | buildings and
structural components of buildings; |
19 | | (B) is depreciable pursuant to Section 167 of the |
20 | | Internal Revenue
Code, except that "3-year property" |
21 | | as defined in Section 168(c)(2)(A) of
that Code is not |
22 | | eligible for the credit provided by this subsection |
23 | | (f); |
24 | | (C) is acquired by purchase as defined in Section |
25 | | 179(d) of
the Internal Revenue Code; |
26 | | (D) is used in the Enterprise Zone or River Edge |
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1 | | Redevelopment Zone by the taxpayer; and |
2 | | (E) has not been previously used in Illinois in |
3 | | such a manner and by
such a person as would qualify for |
4 | | the credit provided by this subsection
(f) or |
5 | | subsection (e). |
6 | | (3) The basis of qualified property shall be the basis |
7 | | used to compute
the depreciation deduction for federal |
8 | | income tax purposes. |
9 | | (4) If the basis of the property for federal income |
10 | | tax depreciation
purposes is increased after it has been |
11 | | placed in service in the Enterprise
Zone or River Edge |
12 | | Redevelopment Zone by the taxpayer, the amount of such |
13 | | increase shall be deemed property
placed in service on the |
14 | | date of such increase in basis. |
15 | | (5) The term "placed in service" shall have the same |
16 | | meaning as under
Section 46 of the Internal Revenue Code. |
17 | | (6) If during any taxable year, any property ceases to |
18 | | be qualified
property in the hands of the taxpayer within |
19 | | 48 months after being placed
in service, or the situs of |
20 | | any qualified property is moved outside the
Enterprise |
21 | | Zone or River Edge Redevelopment Zone within 48 months |
22 | | after being placed in service, the tax
imposed under |
23 | | subsections (a) and (b) of this Section for such taxable |
24 | | year
shall be increased. Such increase shall be determined |
25 | | by (i) recomputing
the investment credit which would have |
26 | | been allowed for the year in which
credit for such |
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1 | | property was originally allowed by eliminating such
|
2 | | property from such computation, and (ii) subtracting such |
3 | | recomputed credit
from the amount of credit previously |
4 | | allowed. For the purposes of this
paragraph (6), a |
5 | | reduction of the basis of qualified property resulting
|
6 | | from a redetermination of the purchase price shall be |
7 | | deemed a disposition
of qualified property to the extent |
8 | | of such reduction. |
9 | | (7) There shall be allowed an additional credit equal |
10 | | to 0.5% of the basis of qualified property placed in |
11 | | service during the taxable year in a River Edge |
12 | | Redevelopment Zone, provided such property is placed in |
13 | | service on or after July 1, 2006, and the taxpayer's base |
14 | | employment within Illinois has increased by 1% or more |
15 | | over the preceding year as determined by the taxpayer's |
16 | | employment records filed with the Illinois Department of |
17 | | Employment Security. Taxpayers who are new to Illinois |
18 | | shall be deemed to have met the 1% growth in base |
19 | | employment for the first year in which they file |
20 | | employment records with the Illinois Department of |
21 | | Employment Security. If, in any year, the increase in base |
22 | | employment within Illinois over the preceding year is less |
23 | | than 1%, the additional credit shall be limited to that |
24 | | percentage times a fraction, the numerator of which is |
25 | | 0.5% and the denominator of which is 1%, but shall not |
26 | | exceed 0.5%.
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1 | | (8) For taxable years beginning on or after January 1, |
2 | | 2021, there shall be allowed an Enterprise Zone |
3 | | construction jobs credit against the taxes imposed under |
4 | | subsections (a) and (b) of this Section as provided in |
5 | | Section 13 of the Illinois Enterprise Zone Act. |
6 | | The credit or credits may not reduce the taxpayer's |
7 | | liability to less than zero. If the amount of the credit or |
8 | | credits exceeds the taxpayer's liability, the excess may |
9 | | be carried forward and applied against the taxpayer's |
10 | | liability in succeeding calendar years in the same manner |
11 | | provided under paragraph (4) of Section 211 of this Act. |
12 | | The credit or credits shall be applied to the earliest |
13 | | year for which there is a tax liability. If there are |
14 | | credits from more than one taxable year that are available |
15 | | to offset a liability, the earlier credit shall be applied |
16 | | first. |
17 | | For partners, shareholders of Subchapter S |
18 | | corporations, and owners of limited liability companies, |
19 | | if the liability company is treated as a partnership for |
20 | | the purposes of federal and State income taxation, there |
21 | | shall be allowed a credit under this Section to be |
22 | | determined in accordance with the determination of income |
23 | | and distributive share of income under Sections 702 and |
24 | | 704 and Subchapter S of the Internal Revenue Code. |
25 | | The total aggregate amount of credits awarded under |
26 | | the Blue Collar Jobs Act (Article 20 of Public Act 101-9) |
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1 | | shall not exceed $20,000,000 in any State fiscal year. |
2 | | This paragraph (8) is exempt from the provisions of |
3 | | Section 250. |
4 | | (g) (Blank). |
5 | | (h) Investment credit; High Impact Business. |
6 | | (1) Subject to subsections (b) and (b-5) of Section
|
7 | | 5.5 of the Illinois Enterprise Zone Act, a taxpayer shall |
8 | | be allowed a credit
against the tax imposed by subsections |
9 | | (a) and (b) of this Section for
investment in qualified
|
10 | | property which is placed in service by a Department of |
11 | | Commerce and Economic Opportunity
designated High Impact |
12 | | Business. The credit shall be .5% of the basis
for such |
13 | | property. The credit shall not be available (i) until the |
14 | | minimum
investments in qualified property set forth in |
15 | | subdivision (a)(3)(A) of
Section 5.5 of the Illinois
|
16 | | Enterprise Zone Act have been satisfied
or (ii) until the |
17 | | time authorized in subsection (b-5) of the Illinois
|
18 | | Enterprise Zone Act for entities designated as High Impact |
19 | | Businesses under
subdivisions (a)(3)(B), (a)(3)(C), and |
20 | | (a)(3)(D) of Section 5.5 of the Illinois
Enterprise Zone |
21 | | Act, and shall not be allowed to the extent that it would
|
22 | | reduce a taxpayer's liability for the tax imposed by |
23 | | subsections (a) and (b) of
this Section to below zero. The |
24 | | credit applicable to such investments shall be
taken in |
25 | | the taxable year in which such investments have been |
26 | | completed. The
credit for additional investments beyond |
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1 | | the minimum investment by a designated
high impact |
2 | | business authorized under subdivision (a)(3)(A) of Section |
3 | | 5.5 of
the Illinois Enterprise Zone Act shall be available |
4 | | only in the taxable year in
which the property is placed in |
5 | | service and shall not be allowed to the extent
that it |
6 | | would reduce a taxpayer's liability for the tax imposed by |
7 | | subsections
(a) and (b) of this Section to below zero.
For |
8 | | tax years ending on or after December 31, 1987, the credit |
9 | | shall be
allowed for the tax year in which the property is |
10 | | placed in service, or, if
the amount of the credit exceeds |
11 | | the tax liability for that year, whether
it exceeds the |
12 | | original liability or the liability as later amended, such
|
13 | | excess may be carried forward and applied to the tax |
14 | | liability of the 5
taxable years following the excess |
15 | | credit year. The credit shall be
applied to the earliest |
16 | | year for which there is a liability. If there is
credit |
17 | | from more than one tax year that is available to offset a |
18 | | liability,
the credit accruing first in time shall be |
19 | | applied first. |
20 | | Changes made in this subdivision (h)(1) by Public Act |
21 | | 88-670
restore changes made by Public Act 85-1182 and |
22 | | reflect existing law. |
23 | | (2) The term qualified property means property which: |
24 | | (A) is tangible, whether new or used, including |
25 | | buildings and
structural components of buildings; |
26 | | (B) is depreciable pursuant to Section 167 of the |
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1 | | Internal Revenue
Code, except that "3-year property" |
2 | | as defined in Section 168(c)(2)(A) of
that Code is not |
3 | | eligible for the credit provided by this subsection |
4 | | (h); |
5 | | (C) is acquired by purchase as defined in Section |
6 | | 179(d) of the
Internal Revenue Code; and |
7 | | (D) is not eligible for the Enterprise Zone |
8 | | Investment Credit provided
by subsection (f) of this |
9 | | Section. |
10 | | (3) The basis of qualified property shall be the basis |
11 | | used to compute
the depreciation deduction for federal |
12 | | income tax purposes. |
13 | | (4) If the basis of the property for federal income |
14 | | tax depreciation
purposes is increased after it has been |
15 | | placed in service in a federally
designated Foreign Trade |
16 | | Zone or Sub-Zone located in Illinois by the taxpayer,
the |
17 | | amount of such increase shall be deemed property placed in |
18 | | service on
the date of such increase in basis. |
19 | | (5) The term "placed in service" shall have the same |
20 | | meaning as under
Section 46 of the Internal Revenue Code. |
21 | | (6) If during any taxable year ending on or before |
22 | | December 31, 1996,
any property ceases to be qualified
|
23 | | property in the hands of the taxpayer within 48 months |
24 | | after being placed
in service, or the situs of any |
25 | | qualified property is moved outside
Illinois within 48 |
26 | | months after being placed in service, the tax imposed
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1 | | under subsections (a) and (b) of this Section for such |
2 | | taxable year shall
be increased. Such increase shall be |
3 | | determined by (i) recomputing the
investment credit which |
4 | | would have been allowed for the year in which
credit for |
5 | | such property was originally allowed by eliminating such
|
6 | | property from such computation, and (ii) subtracting such |
7 | | recomputed credit
from the amount of credit previously |
8 | | allowed. For the purposes of this
paragraph (6), a |
9 | | reduction of the basis of qualified property resulting
|
10 | | from a redetermination of the purchase price shall be |
11 | | deemed a disposition
of qualified property to the extent |
12 | | of such reduction. |
13 | | (7) Beginning with tax years ending after December 31, |
14 | | 1996, if a
taxpayer qualifies for the credit under this |
15 | | subsection (h) and thereby is
granted a tax abatement and |
16 | | the taxpayer relocates its entire facility in
violation of |
17 | | the explicit terms and length of the contract under |
18 | | Section
18-183 of the Property Tax Code, the tax imposed |
19 | | under subsections
(a) and (b) of this Section shall be |
20 | | increased for the taxable year
in which the taxpayer |
21 | | relocated its facility by an amount equal to the
amount of |
22 | | credit received by the taxpayer under this subsection (h). |
23 | | (h-5) High Impact Business construction jobs credit. For |
24 | | taxable years beginning on or after January 1, 2021, there |
25 | | shall also be allowed a High Impact Business construction jobs |
26 | | credit against the tax imposed under subsections (a) and (b) |
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1 | | of this Section as provided in subsections (i) and (j) of |
2 | | Section 5.5 of the Illinois Enterprise Zone Act. |
3 | | The credit or credits may not reduce the taxpayer's |
4 | | liability to less than zero. If the amount of the credit or |
5 | | credits exceeds the taxpayer's liability, the excess may be |
6 | | carried forward and applied against the taxpayer's liability |
7 | | in succeeding calendar years in the manner provided under |
8 | | paragraph (4) of Section 211 of this Act. The credit or credits |
9 | | shall be applied to the earliest year for which there is a tax |
10 | | liability. If there are credits from more than one taxable |
11 | | year that are available to offset a liability, the earlier |
12 | | credit shall be applied first. |
13 | | For partners, shareholders of Subchapter S corporations, |
14 | | and owners of limited liability companies, if the liability |
15 | | company is treated as a partnership for the purposes of |
16 | | federal and State income taxation, there shall be allowed a |
17 | | credit under this Section to be determined in accordance with |
18 | | the determination of income and distributive share of income |
19 | | under Sections 702 and 704 and Subchapter S of the Internal |
20 | | Revenue Code. |
21 | | The total aggregate amount of credits awarded under the |
22 | | Blue Collar Jobs Act (Article 20 of Public Act 101-9) shall not |
23 | | exceed $20,000,000 in any State fiscal year. |
24 | | This subsection (h-5) is exempt from the provisions of |
25 | | Section 250. |
26 | | (i) Credit for Personal Property Tax Replacement Income |
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1 | | Tax.
For tax years ending prior to December 31, 2003, a credit |
2 | | shall be allowed
against the tax imposed by
subsections (a) |
3 | | and (b) of this Section for the tax imposed by subsections (c)
|
4 | | and (d) of this Section. This credit shall be computed by |
5 | | multiplying the tax
imposed by subsections (c) and (d) of this |
6 | | Section by a fraction, the numerator
of which is base income |
7 | | allocable to Illinois and the denominator of which is
Illinois |
8 | | base income, and further multiplying the product by the tax |
9 | | rate
imposed by subsections (a) and (b) of this Section. |
10 | | Any credit earned on or after December 31, 1986 under
this |
11 | | subsection which is unused in the year
the credit is computed |
12 | | because it exceeds the tax liability imposed by
subsections |
13 | | (a) and (b) for that year (whether it exceeds the original
|
14 | | liability or the liability as later amended) may be carried |
15 | | forward and
applied to the tax liability imposed by |
16 | | subsections (a) and (b) of the 5
taxable years following the |
17 | | excess credit year, provided that no credit may
be carried |
18 | | forward to any year ending on or
after December 31, 2003. This |
19 | | credit shall be
applied first to the earliest year for which |
20 | | there is a liability. If
there is a credit under this |
21 | | subsection from more than one tax year that is
available to |
22 | | offset a liability the earliest credit arising under this
|
23 | | subsection shall be applied first. |
24 | | If, during any taxable year ending on or after December |
25 | | 31, 1986, the
tax imposed by subsections (c) and (d) of this |
26 | | Section for which a taxpayer
has claimed a credit under this |
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1 | | subsection (i) is reduced, the amount of
credit for such tax |
2 | | shall also be reduced. Such reduction shall be
determined by |
3 | | recomputing the credit to take into account the reduced tax
|
4 | | imposed by subsections (c) and (d). If any portion of the
|
5 | | reduced amount of credit has been carried to a different |
6 | | taxable year, an
amended return shall be filed for such |
7 | | taxable year to reduce the amount of
credit claimed. |
8 | | (j) Training expense credit. Beginning with tax years |
9 | | ending on or
after December 31, 1986 and prior to December 31, |
10 | | 2003, a taxpayer shall be
allowed a credit against the
tax |
11 | | imposed by subsections (a) and (b) under this Section
for all |
12 | | amounts paid or accrued, on behalf of all persons
employed by |
13 | | the taxpayer in Illinois or Illinois residents employed
|
14 | | outside of Illinois by a taxpayer, for educational or |
15 | | vocational training in
semi-technical or technical fields or |
16 | | semi-skilled or skilled fields, which
were deducted from gross |
17 | | income in the computation of taxable income. The
credit |
18 | | against the tax imposed by subsections (a) and (b) shall be |
19 | | 1.6% of
such training expenses. For partners, shareholders of |
20 | | subchapter S
corporations, and owners of limited liability |
21 | | companies, if the liability
company is treated as a |
22 | | partnership for purposes of federal and State income
taxation, |
23 | | there shall be allowed a credit under this subsection (j) to be
|
24 | | determined in accordance with the determination of income and |
25 | | distributive
share of income under Sections 702 and 704 and |
26 | | subchapter S of the Internal
Revenue Code. |
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1 | | Any credit allowed under this subsection which is unused |
2 | | in the year
the credit is earned may be carried forward to each |
3 | | of the 5 taxable
years following the year for which the credit |
4 | | is first computed until it is
used. This credit shall be |
5 | | applied first to the earliest year for which
there is a |
6 | | liability. If there is a credit under this subsection from |
7 | | more
than one tax year that is available to offset a liability, |
8 | | the earliest
credit arising under this subsection shall be |
9 | | applied first. No carryforward
credit may be claimed in any |
10 | | tax year ending on or after
December 31, 2003. |
11 | | (k) Research and development credit. For tax years ending |
12 | | after July 1, 1990 and prior to
December 31, 2003, and |
13 | | beginning again for tax years ending on or after December 31, |
14 | | 2004, and ending prior to January 1, 2037 January 1, 2027 , a |
15 | | taxpayer shall be
allowed a credit against the tax imposed by |
16 | | subsections (a) and (b) of this
Section for increasing |
17 | | research activities in this State. The credit
allowed against |
18 | | the tax imposed by subsections (a) and (b) shall be equal
to 6 |
19 | | 1/2% of the qualifying expenditures for increasing research |
20 | | activities
in this State , except that, for tax years beginning |
21 | | on or after January 1, 2024, in the case of qualifying |
22 | | expenditures specifically related to quantum information |
23 | | science, the taxpayer may apply to the Department to increase |
24 | | the amount of the credit allowed under this subsection to 13% |
25 | | of the qualifying expenditures for increasing research |
26 | | activities in this State. In no event shall a taxpayer be |
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1 | | allowed both the increased 13% credit under this Section for |
2 | | qualifying expenditures specifically related to quantum |
3 | | information science and the 6 1/2% credit under this |
4 | | subsection for the same expenditures. The total aggregate |
5 | | amount of the additional credits awarded under this subsection |
6 | | for qualifying expenditures specifically related to quantum |
7 | | information science shall not exceed $25,000,000 in any |
8 | | calendar year . For partners, shareholders of subchapter S |
9 | | corporations, and
owners of limited liability companies, if |
10 | | the liability company is treated as a
partnership for purposes |
11 | | of federal and State income taxation, there shall be
allowed a |
12 | | credit under this subsection to be determined in accordance |
13 | | with the
determination of income and distributive share of |
14 | | income under Sections 702 and
704 and subchapter S of the |
15 | | Internal Revenue Code. |
16 | | In lieu of the credit allowed under this subsection (k) |
17 | | against taxes imposed pursuant to subsections (a) and (b) of |
18 | | this Section, for any taxable year ending after December 31, |
19 | | 2023, a qualified startup taxpayer may elect to claim the |
20 | | credit against its obligation to pay over withholding taxes |
21 | | under Section 704A. However, the taxpayer may not make such an |
22 | | election for a taxable year if the taxpayer has an Illinois |
23 | | income tax liability for that taxable year with respect to the |
24 | | taxes imposed pursuant to subsections (a) and (b) of Section |
25 | | 201 of this Act against which the taxpayer may claim the credit |
26 | | under this subsection (k). |
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1 | | As used in For purposes of this subsection : , |
2 | | "Business entity" means a corporation, association, |
3 | | partnership, limited liability company, or other legal |
4 | | entity. |
5 | | "Qualified startup taxpayer" means a business entity |
6 | | that (i) was incorporated or organized no more than 5 |
7 | | years before the first day of the taxable year for which |
8 | | the credit is sought, (ii) has never had any Illinois |
9 | | income tax liability, excluding any Illinois income tax |
10 | | liability of a related member, which shall not be |
11 | | attributed to the startup taxpayer, and (iii) otherwise |
12 | | meets the requirements of this subsection (k). |
13 | | "Qualifying "qualifying expenditures" means the
|
14 | | qualifying expenditures as defined for the federal credit |
15 | | for increasing
research activities which would be |
16 | | allowable under Section 41 of the
Internal Revenue Code |
17 | | and which are conducted in this State . , |
18 | | "Qualifying "qualifying
expenditures for increasing |
19 | | research activities in this State" means the
excess of |
20 | | qualifying expenditures for the taxable year in which |
21 | | incurred
over qualifying expenditures for the base period . |
22 | | , |
23 | | "Qualifying "qualifying expenditures
for the base |
24 | | period" means the average of the qualifying expenditures |
25 | | for
each year in the base period, and "base period" means |
26 | | the 3 taxable years
immediately preceding the taxable year |
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1 | | for which the determination is
being made. |
2 | | "Quantum information science" has the same meaning |
3 | | given to that term in Section 2 of the federal National |
4 | | Quantum Initiative Act. |
5 | | "Related member" has the meaning given to the term in |
6 | | Section 5-5 of the Economic Development for a Growing |
7 | | Economy Tax Credit Act. |
8 | | Any credit in excess of the tax liability for the taxable |
9 | | year
may be carried forward. A taxpayer may elect to have the
|
10 | | unused credit shown on its final completed return carried over |
11 | | as a credit
against the tax liability for the following 5 |
12 | | taxable years or until it has
been fully used, whichever |
13 | | occurs first; provided that no credit earned in a tax year |
14 | | ending prior to December 31, 2003 may be carried forward to any |
15 | | year ending on or after December 31, 2003. |
16 | | If an unused credit is carried forward to a given year from |
17 | | 2 or more
earlier years, that credit arising in the earliest |
18 | | year will be applied
first against the tax liability for the |
19 | | given year. If a tax liability for
the given year still |
20 | | remains, the credit from the next earliest year will
then be |
21 | | applied, and so on, until all credits have been used or no tax
|
22 | | liability for the given year remains. Any remaining unused |
23 | | credit or
credits then will be carried forward to the next |
24 | | following year in which a
tax liability is incurred, except |
25 | | that no credit can be carried forward to
a year which is more |
26 | | than 5 years after the year in which the expense for
which the |
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1 | | credit is given was incurred. |
2 | | No inference shall be drawn from Public Act 91-644 in |
3 | | construing this Section for taxable years beginning before |
4 | | January
1, 1999. |
5 | | It is the intent of the General Assembly that the research |
6 | | and development credit under this subsection (k) shall apply |
7 | | continuously for all tax years ending on or after December 31, |
8 | | 2004 and ending prior to January 1, 2027, including, but not |
9 | | limited to, the period beginning on January 1, 2016 and ending |
10 | | on July 6, 2017 (the effective date of Public Act 100-22). All |
11 | | actions taken in reliance on the continuation of the credit |
12 | | under this subsection (k) by any taxpayer are hereby |
13 | | validated. |
14 | | (l) Environmental Remediation Tax Credit. |
15 | | (i) For tax years ending after December 31, 1997 and |
16 | | on or before
December 31, 2001, a taxpayer shall be |
17 | | allowed a credit against the tax
imposed by subsections |
18 | | (a) and (b) of this Section for certain amounts paid
for |
19 | | unreimbursed eligible remediation costs, as specified in |
20 | | this subsection.
For purposes of this Section, |
21 | | "unreimbursed eligible remediation costs" means
costs |
22 | | approved by the Illinois Environmental Protection Agency |
23 | | ("Agency") under
Section 58.14 of the Environmental |
24 | | Protection Act that were paid in performing
environmental |
25 | | remediation at a site for which a No Further Remediation |
26 | | Letter
was issued by the Agency and recorded under Section |
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1 | | 58.10 of the Environmental
Protection Act. The credit must |
2 | | be claimed for the taxable year in which
Agency approval |
3 | | of the eligible remediation costs is granted. The credit |
4 | | is
not available to any taxpayer if the taxpayer or any |
5 | | related party caused or
contributed to, in any material |
6 | | respect, a release of regulated substances on,
in, or |
7 | | under the site that was identified and addressed by the |
8 | | remedial
action pursuant to the Site Remediation Program |
9 | | of the Environmental Protection
Act. After the Pollution |
10 | | Control Board rules are adopted pursuant to the
Illinois |
11 | | Administrative Procedure Act for the administration and |
12 | | enforcement of
Section 58.9 of the Environmental |
13 | | Protection Act, determinations as to credit
availability |
14 | | for purposes of this Section shall be made consistent with |
15 | | those
rules. For purposes of this Section, "taxpayer" |
16 | | includes a person whose tax
attributes the taxpayer has |
17 | | succeeded to under Section 381 of the Internal
Revenue |
18 | | Code and "related party" includes the persons disallowed a |
19 | | deduction
for losses by paragraphs (b), (c), and (f)(1) of |
20 | | Section 267 of the Internal
Revenue Code by virtue of |
21 | | being a related taxpayer, as well as any of its
partners. |
22 | | The credit allowed against the tax imposed by subsections |
23 | | (a) and
(b) shall be equal to 25% of the unreimbursed |
24 | | eligible remediation costs in
excess of $100,000 per site, |
25 | | except that the $100,000 threshold shall not apply
to any |
26 | | site contained in an enterprise zone as determined by the |
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1 | | Department of
Commerce and Community Affairs (now |
2 | | Department of Commerce and Economic Opportunity). The |
3 | | total credit allowed shall not exceed
$40,000 per year |
4 | | with a maximum total of $150,000 per site. For partners |
5 | | and
shareholders of subchapter S corporations, there shall |
6 | | be allowed a credit
under this subsection to be determined |
7 | | in accordance with the determination of
income and |
8 | | distributive share of income under Sections 702 and 704 |
9 | | and
subchapter S of the Internal Revenue Code. |
10 | | (ii) A credit allowed under this subsection that is |
11 | | unused in the year
the credit is earned may be carried |
12 | | forward to each of the 5 taxable years
following the year |
13 | | for which the credit is first earned until it is used.
The |
14 | | term "unused credit" does not include any amounts of |
15 | | unreimbursed eligible
remediation costs in excess of the |
16 | | maximum credit per site authorized under
paragraph (i). |
17 | | This credit shall be applied first to the earliest year
|
18 | | for which there is a liability. If there is a credit under |
19 | | this subsection
from more than one tax year that is |
20 | | available to offset a liability, the
earliest credit |
21 | | arising under this subsection shall be applied first. A
|
22 | | credit allowed under this subsection may be sold to a |
23 | | buyer as part of a sale
of all or part of the remediation |
24 | | site for which the credit was granted. The
purchaser of a |
25 | | remediation site and the tax credit shall succeed to the |
26 | | unused
credit and remaining carry-forward period of the |
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1 | | seller. To perfect the
transfer, the assignor shall record |
2 | | the transfer in the chain of title for the
site and provide |
3 | | written notice to the Director of the Illinois Department |
4 | | of
Revenue of the assignor's intent to sell the |
5 | | remediation site and the amount of
the tax credit to be |
6 | | transferred as a portion of the sale. In no event may a
|
7 | | credit be transferred to any taxpayer if the taxpayer or a |
8 | | related party would
not be eligible under the provisions |
9 | | of subsection (i). |
10 | | (iii) For purposes of this Section, the term "site" |
11 | | shall have the same
meaning as under Section 58.2 of the |
12 | | Environmental Protection Act. |
13 | | (m) Education expense credit. Beginning with tax years |
14 | | ending after
December 31, 1999, a taxpayer who
is the |
15 | | custodian of one or more qualifying pupils shall be allowed a |
16 | | credit
against the tax imposed by subsections (a) and (b) of |
17 | | this Section for
qualified education expenses incurred on |
18 | | behalf of the qualifying pupils.
The credit shall be equal to |
19 | | 25% of qualified education expenses, but in no
event may the |
20 | | total credit under this subsection claimed by a
family that is |
21 | | the
custodian of qualifying pupils exceed (i) $500 for tax |
22 | | years ending prior to December 31, 2017, and (ii) $750 for tax |
23 | | years ending on or after December 31, 2017. In no event shall a |
24 | | credit under
this subsection reduce the taxpayer's liability |
25 | | under this Act to less than
zero. Notwithstanding any other |
26 | | provision of law, for taxable years beginning on or after |
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1 | | January 1, 2017, no taxpayer may claim a credit under this |
2 | | subsection (m) if the taxpayer's adjusted gross income for the |
3 | | taxable year exceeds (i) $500,000, in the case of spouses |
4 | | filing a joint federal tax return or (ii) $250,000, in the case |
5 | | of all other taxpayers. This subsection is exempt from the |
6 | | provisions of Section 250 of this
Act. |
7 | | For purposes of this subsection: |
8 | | "Qualifying pupils" means individuals who (i) are |
9 | | residents of the State of
Illinois, (ii) are under the age of |
10 | | 21 at the close of the school year for
which a credit is |
11 | | sought, and (iii) during the school year for which a credit
is |
12 | | sought were full-time pupils enrolled in a kindergarten |
13 | | through twelfth
grade education program at any school, as |
14 | | defined in this subsection. |
15 | | "Qualified education expense" means the amount incurred
on |
16 | | behalf of a qualifying pupil in excess of $250 for tuition, |
17 | | book fees, and
lab fees at the school in which the pupil is |
18 | | enrolled during the regular school
year. |
19 | | "School" means any public or nonpublic elementary or |
20 | | secondary school in
Illinois that is in compliance with Title |
21 | | VI of the Civil Rights Act of 1964
and attendance at which |
22 | | satisfies the requirements of Section 26-1 of the
School Code, |
23 | | except that nothing shall be construed to require a child to
|
24 | | attend any particular public or nonpublic school to qualify |
25 | | for the credit
under this Section. |
26 | | "Custodian" means, with respect to qualifying pupils, an |
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1 | | Illinois resident
who is a parent, the parents, a legal |
2 | | guardian, or the legal guardians of the
qualifying pupils. |
3 | | (n) River Edge Redevelopment Zone site remediation tax |
4 | | credit.
|
5 | | (i) For tax years ending on or after December 31, |
6 | | 2006, a taxpayer shall be allowed a credit against the tax |
7 | | imposed by subsections (a) and (b) of this Section for |
8 | | certain amounts paid for unreimbursed eligible remediation |
9 | | costs, as specified in this subsection. For purposes of |
10 | | this Section, "unreimbursed eligible remediation costs" |
11 | | means costs approved by the Illinois Environmental |
12 | | Protection Agency ("Agency") under Section 58.14a of the |
13 | | Environmental Protection Act that were paid in performing |
14 | | environmental remediation at a site within a River Edge |
15 | | Redevelopment Zone for which a No Further Remediation |
16 | | Letter was issued by the Agency and recorded under Section |
17 | | 58.10 of the Environmental Protection Act. The credit must |
18 | | be claimed for the taxable year in which Agency approval |
19 | | of the eligible remediation costs is granted. The credit |
20 | | is not available to any taxpayer if the taxpayer or any |
21 | | related party caused or contributed to, in any material |
22 | | respect, a release of regulated substances on, in, or |
23 | | under the site that was identified and addressed by the |
24 | | remedial action pursuant to the Site Remediation Program |
25 | | of the Environmental Protection Act. Determinations as to |
26 | | credit availability for purposes of this Section shall be |
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1 | | made consistent with rules adopted by the Pollution |
2 | | Control Board pursuant to the Illinois Administrative |
3 | | Procedure Act for the administration and enforcement of |
4 | | Section 58.9 of the Environmental Protection Act. For |
5 | | purposes of this Section, "taxpayer" includes a person |
6 | | whose tax attributes the taxpayer has succeeded to under |
7 | | Section 381 of the Internal Revenue Code and "related |
8 | | party" includes the persons disallowed a deduction for |
9 | | losses by paragraphs (b), (c), and (f)(1) of Section 267 |
10 | | of the Internal Revenue Code by virtue of being a related |
11 | | taxpayer, as well as any of its partners. The credit |
12 | | allowed against the tax imposed by subsections (a) and (b) |
13 | | shall be equal to 25% of the unreimbursed eligible |
14 | | remediation costs in excess of $100,000 per site. |
15 | | (ii) A credit allowed under this subsection that is |
16 | | unused in the year the credit is earned may be carried |
17 | | forward to each of the 5 taxable years following the year |
18 | | for which the credit is first earned until it is used. This |
19 | | credit shall be applied first to the earliest year for |
20 | | which there is a liability. If there is a credit under this |
21 | | subsection from more than one tax year that is available |
22 | | to offset a liability, the earliest credit arising under |
23 | | this subsection shall be applied first. A credit allowed |
24 | | under this subsection may be sold to a buyer as part of a |
25 | | sale of all or part of the remediation site for which the |
26 | | credit was granted. The purchaser of a remediation site |
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1 | | and the tax credit shall succeed to the unused credit and |
2 | | remaining carry-forward period of the seller. To perfect |
3 | | the transfer, the assignor shall record the transfer in |
4 | | the chain of title for the site and provide written notice |
5 | | to the Director of the Illinois Department of Revenue of |
6 | | the assignor's intent to sell the remediation site and the |
7 | | amount of the tax credit to be transferred as a portion of |
8 | | the sale. In no event may a credit be transferred to any |
9 | | taxpayer if the taxpayer or a related party would not be |
10 | | eligible under the provisions of subsection (i). |
11 | | (iii) For purposes of this Section, the term "site" |
12 | | shall have the same meaning as under Section 58.2 of the |
13 | | Environmental Protection Act. |
14 | | (o) For each of taxable years during the Compassionate Use |
15 | | of Medical Cannabis Program, a surcharge is imposed on all |
16 | | taxpayers on income arising from the sale or exchange of |
17 | | capital assets, depreciable business property, real property |
18 | | used in the trade or business, and Section 197 intangibles of |
19 | | an organization registrant under the Compassionate Use of |
20 | | Medical Cannabis Program Act. The amount of the surcharge is |
21 | | equal to the amount of federal income tax liability for the |
22 | | taxable year attributable to those sales and exchanges. The |
23 | | surcharge imposed does not apply if: |
24 | | (1) the medical cannabis cultivation center |
25 | | registration, medical cannabis dispensary registration, or |
26 | | the property of a registration is transferred as a result |
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1 | | of any of the following: |
2 | | (A) bankruptcy, a receivership, or a debt |
3 | | adjustment initiated by or against the initial |
4 | | registration or the substantial owners of the initial |
5 | | registration; |
6 | | (B) cancellation, revocation, or termination of |
7 | | any registration by the Illinois Department of Public |
8 | | Health; |
9 | | (C) a determination by the Illinois Department of |
10 | | Public Health that transfer of the registration is in |
11 | | the best interests of Illinois qualifying patients as |
12 | | defined by the Compassionate Use of Medical Cannabis |
13 | | Program Act; |
14 | | (D) the death of an owner of the equity interest in |
15 | | a registrant; |
16 | | (E) the acquisition of a controlling interest in |
17 | | the stock or substantially all of the assets of a |
18 | | publicly traded company; |
19 | | (F) a transfer by a parent company to a wholly |
20 | | owned subsidiary; or |
21 | | (G) the transfer or sale to or by one person to |
22 | | another person where both persons were initial owners |
23 | | of the registration when the registration was issued; |
24 | | or |
25 | | (2) the cannabis cultivation center registration, |
26 | | medical cannabis dispensary registration, or the |
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1 | | controlling interest in a registrant's property is |
2 | | transferred in a transaction to lineal descendants in |
3 | | which no gain or loss is recognized or as a result of a |
4 | | transaction in accordance with Section 351 of the Internal |
5 | | Revenue Code in which no gain or loss is recognized. |
6 | | (p) Pass-through entity tax. |
7 | | (1) For taxable years ending on or after December 31, |
8 | | 2021 and beginning prior to January 1, 2026, a partnership |
9 | | (other than a publicly traded partnership under Section |
10 | | 7704 of the Internal Revenue Code) or Subchapter S |
11 | | corporation may elect to apply the provisions of this |
12 | | subsection. A separate election shall be made for each |
13 | | taxable year. Such election shall be made at such time, |
14 | | and in such form and manner as prescribed by the |
15 | | Department, and, once made, is irrevocable. |
16 | | (2) Entity-level tax. A partnership or Subchapter S |
17 | | corporation electing to apply the provisions of this |
18 | | subsection shall be subject to a tax for the privilege of |
19 | | earning or receiving income in this State in an amount |
20 | | equal to 4.95% of the taxpayer's net income for the |
21 | | taxable year. |
22 | | (3) Net income defined. |
23 | | (A) In general. For purposes of paragraph (2), the |
24 | | term net income has the same meaning as defined in |
25 | | Section 202 of this Act, except that the following |
26 | | provisions shall not apply: |
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1 | | (i) the standard exemption allowed under |
2 | | Section 204; |
3 | | (ii) the deduction for net losses allowed |
4 | | under Section 207; |
5 | | (iii) in the case of an S corporation, the |
6 | | modification under Section 203(b)(2)(S); and |
7 | | (iv) in the case of a partnership, the |
8 | | modifications under Section 203(d)(2)(H) and |
9 | | Section 203(d)(2)(I). |
10 | | (B) Special rule for tiered partnerships. If a |
11 | | taxpayer making the election under paragraph (1) is a |
12 | | partner of another taxpayer making the election under |
13 | | paragraph (1), net income shall be computed as |
14 | | provided in subparagraph (A), except that the taxpayer |
15 | | shall subtract its distributive share of the net |
16 | | income of the electing partnership (including its |
17 | | distributive share of the net income of the electing |
18 | | partnership derived as a distributive share from |
19 | | electing partnerships in which it is a partner). |
20 | | (4) Credit for entity level tax. Each partner or |
21 | | shareholder of a taxpayer making the election under this |
22 | | Section shall be allowed a credit against the tax imposed |
23 | | under subsections (a) and (b) of Section 201 of this Act |
24 | | for the taxable year of the partnership or Subchapter S |
25 | | corporation for which an election is in effect ending |
26 | | within or with the taxable year of the partner or |
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1 | | shareholder in an amount equal to 4.95% times the partner |
2 | | or shareholder's distributive share of the net income of |
3 | | the electing partnership or Subchapter S corporation, but |
4 | | not to exceed the partner's or shareholder's share of the |
5 | | tax imposed under paragraph (1) which is actually paid by |
6 | | the partnership or Subchapter S corporation. If the |
7 | | taxpayer is a partnership or Subchapter S corporation that |
8 | | is itself a partner of a partnership making the election |
9 | | under paragraph (1), the credit under this paragraph shall |
10 | | be allowed to the taxpayer's partners or shareholders (or |
11 | | if the partner is a partnership or Subchapter S |
12 | | corporation then its partners or shareholders) in |
13 | | accordance with the determination of income and |
14 | | distributive share of income under Sections 702 and 704 |
15 | | and Subchapter S of the Internal Revenue Code. If the |
16 | | amount of the credit allowed under this paragraph exceeds |
17 | | the partner's or shareholder's liability for tax imposed |
18 | | under subsections (a) and (b) of Section 201 of this Act |
19 | | for the taxable year, such excess shall be treated as an |
20 | | overpayment for purposes of Section 909 of this Act. |
21 | | (5) Nonresidents. A nonresident individual who is a |
22 | | partner or shareholder of a partnership or Subchapter S |
23 | | corporation for a taxable year for which an election is in |
24 | | effect under paragraph (1) shall not be required to file |
25 | | an income tax return under this Act for such taxable year |
26 | | if the only source of net income of the individual (or the |
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1 | | individual and the individual's spouse in the case of a |
2 | | joint return) is from an entity making the election under |
3 | | paragraph (1) and the credit allowed to the partner or |
4 | | shareholder under paragraph (4) equals or exceeds the |
5 | | individual's liability for the tax imposed under |
6 | | subsections (a) and (b) of Section 201 of this Act for the |
7 | | taxable year. |
8 | | (6) Liability for tax. Except as provided in this |
9 | | paragraph, a partnership or Subchapter S making the |
10 | | election under paragraph (1) is liable for the |
11 | | entity-level tax imposed under paragraph (2). If the |
12 | | electing partnership or corporation fails to pay the full |
13 | | amount of tax deemed assessed under paragraph (2), the |
14 | | partners or shareholders shall be liable to pay the tax |
15 | | assessed (including penalties and interest). Each partner |
16 | | or shareholder shall be liable for the unpaid assessment |
17 | | based on the ratio of the partner's or shareholder's share |
18 | | of the net income of the partnership over the total net |
19 | | income of the partnership. If the partnership or |
20 | | Subchapter S corporation fails to pay the tax assessed |
21 | | (including penalties and interest) and thereafter an |
22 | | amount of such tax is paid by the partners or |
23 | | shareholders, such amount shall not be collected from the |
24 | | partnership or corporation. |
25 | | (7) Foreign tax. For purposes of the credit allowed |
26 | | under Section 601(b)(3) of this Act, tax paid by a |
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1 | | partnership or Subchapter S corporation to another state |
2 | | which, as determined by the Department, is substantially |
3 | | similar to the tax imposed under this subsection, shall be |
4 | | considered tax paid by the partner or shareholder to the |
5 | | extent that the partner's or shareholder's share of the |
6 | | income of the partnership or Subchapter S corporation |
7 | | allocated and apportioned to such other state bears to the |
8 | | total income of the partnership or Subchapter S |
9 | | corporation allocated or apportioned to such other state. |
10 | | (8) Suspension of withholding. The provisions of |
11 | | Section 709.5 of this Act shall not apply to a partnership |
12 | | or Subchapter S corporation for the taxable year for which |
13 | | an election under paragraph (1) is in effect. |
14 | | (9) Requirement to pay estimated tax. For each taxable |
15 | | year for which an election under paragraph (1) is in |
16 | | effect, a partnership or Subchapter S corporation is |
17 | | required to pay estimated tax for such taxable year under |
18 | | Sections 803 and 804 of this Act if the amount payable as |
19 | | estimated tax can reasonably be expected to exceed $500. |
20 | | (10) The provisions of this subsection shall apply |
21 | | only with respect to taxable years for which the |
22 | | limitation on individual deductions applies under Section |
23 | | 164(b)(6) of the Internal Revenue Code. |
24 | | (Source: P.A. 101-9, eff. 6-5-19; 101-31, eff. 6-28-19; |
25 | | 101-207, eff. 8-2-19; 101-363, eff. 8-9-19; 102-558, eff. |
26 | | 8-20-21; 102-658, eff. 8-27-21.) |
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1 | | (35 ILCS 5/704A) |
2 | | Sec. 704A. Employer's return and payment of tax withheld. |
3 | | (a) In general, every employer who deducts and withholds |
4 | | or is required to deduct and withhold tax under this Act on or |
5 | | after January 1, 2008 shall make those payments and returns as |
6 | | provided in this Section. |
7 | | (b) Returns. Every employer shall, in the form and manner |
8 | | required by the Department, make returns with respect to taxes |
9 | | withheld or required to be withheld under this Article 7 for |
10 | | each quarter beginning on or after January 1, 2008, on or |
11 | | before the last day of the first month following the close of |
12 | | that quarter. |
13 | | (c) Payments. With respect to amounts withheld or required |
14 | | to be withheld on or after January 1, 2008: |
15 | | (1) Semi-weekly payments. For each calendar year, each |
16 | | employer who withheld or was required to withhold more |
17 | | than $12,000 during the one-year period ending on June 30 |
18 | | of the immediately preceding calendar year, payment must |
19 | | be made: |
20 | | (A) on or before each Friday of the calendar year, |
21 | | for taxes withheld or required to be withheld on the |
22 | | immediately preceding Saturday, Sunday, Monday, or |
23 | | Tuesday; |
24 | | (B) on or before each Wednesday of the calendar |
25 | | year, for taxes withheld or required to be withheld on |
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1 | | the immediately preceding Wednesday, Thursday, or |
2 | | Friday. |
3 | | Beginning with calendar year 2011, payments made under |
4 | | this paragraph (1) of subsection (c) must be made by |
5 | | electronic funds transfer. |
6 | | (2) Semi-weekly payments. Any employer who withholds |
7 | | or is required to withhold more than $12,000 in any |
8 | | quarter of a calendar year is required to make payments on |
9 | | the dates set forth under item (1) of this subsection (c) |
10 | | for each remaining quarter of that calendar year and for |
11 | | the subsequent calendar year.
|
12 | | (3) Monthly payments. Each employer, other than an |
13 | | employer described in items (1) or (2) of this subsection, |
14 | | shall pay to the Department, on or before the 15th day of |
15 | | each month the taxes withheld or required to be withheld |
16 | | during the immediately preceding month. |
17 | | (4) Payments with returns. Each employer shall pay to |
18 | | the Department, on or before the due date for each return |
19 | | required to be filed under this Section, any tax withheld |
20 | | or required to be withheld during the period for which the |
21 | | return is due and not previously paid to the Department. |
22 | | (d) Regulatory authority. The Department may, by rule: |
23 | | (1) Permit employers, in lieu of the requirements of |
24 | | subsections (b) and (c), to file annual returns due on or |
25 | | before January 31 of the year for taxes withheld or |
26 | | required to be withheld during the previous calendar year |
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1 | | and, if the aggregate amounts required to be withheld by |
2 | | the employer under this Article 7 (other than amounts |
3 | | required to be withheld under Section 709.5) do not exceed |
4 | | $1,000 for the previous calendar year, to pay the taxes |
5 | | required to be shown on each such return no later than the |
6 | | due date for such return. |
7 | | (2) Provide that any payment required to be made under |
8 | | subsection (c)(1) or (c)(2) is deemed to be timely to the |
9 | | extent paid by electronic funds transfer on or before the |
10 | | due date for deposit of federal income taxes withheld |
11 | | from, or federal employment taxes due with respect to, the |
12 | | wages from which the Illinois taxes were withheld. |
13 | | (3) Designate one or more depositories to which |
14 | | payment of taxes required to be withheld under this |
15 | | Article 7 must be paid by some or all employers. |
16 | | (4) Increase the threshold dollar amounts at which |
17 | | employers are required to make semi-weekly payments under |
18 | | subsection (c)(1) or (c)(2). |
19 | | (e) Annual return and payment. Every employer who deducts |
20 | | and withholds or is required to deduct and withhold tax from a |
21 | | person engaged in domestic service employment, as that term is |
22 | | defined in Section 3510 of the Internal Revenue Code, may |
23 | | comply with the requirements of this Section with respect to |
24 | | such employees by filing an annual return and paying the taxes |
25 | | required to be deducted and withheld on or before the 15th day |
26 | | of the fourth month following the close of the employer's |
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1 | | taxable year. The Department may allow the employer's return |
2 | | to be submitted with the employer's individual income tax |
3 | | return or to be submitted with a return due from the employer |
4 | | under Section 1400.2 of the Unemployment Insurance Act. |
5 | | (f) Magnetic media and electronic filing. With respect to |
6 | | taxes withheld in calendar years prior to 2017, any W-2 Form |
7 | | that, under the Internal Revenue Code and regulations |
8 | | promulgated thereunder, is required to be submitted to the |
9 | | Internal Revenue Service on magnetic media or electronically |
10 | | must also be submitted to the Department on magnetic media or |
11 | | electronically for Illinois purposes, if required by the |
12 | | Department. |
13 | | With respect to taxes withheld in 2017 and subsequent |
14 | | calendar years, the Department may, by rule, require that any |
15 | | return (including any amended return) under this Section and |
16 | | any W-2 Form that is required to be submitted to the Department |
17 | | must be submitted on magnetic media or electronically. |
18 | | The due date for submitting W-2 Forms shall be as |
19 | | prescribed by the Department by rule. |
20 | | (g) For amounts deducted or withheld after December 31, |
21 | | 2009, a taxpayer who makes an election under subsection (f) of |
22 | | Section 5-15 of the Economic Development for a Growing Economy |
23 | | Tax Credit Act for a taxable year shall be allowed a credit |
24 | | against payments due under this Section for amounts withheld |
25 | | during the first calendar year beginning after the end of that |
26 | | taxable year equal to the amount of the credit for the |
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1 | | incremental income tax attributable to full-time employees of |
2 | | the taxpayer awarded to the taxpayer by the Department of |
3 | | Commerce and Economic Opportunity under the Economic |
4 | | Development for a Growing Economy Tax Credit Act for the |
5 | | taxable year and credits not previously claimed and allowed to |
6 | | be carried forward under Section 211(4) of this Act as |
7 | | provided in subsection (f) of Section 5-15 of the Economic |
8 | | Development for a Growing Economy Tax Credit Act. The credit |
9 | | or credits may not reduce the taxpayer's obligation for any |
10 | | payment due under this Section to less than zero. If the amount |
11 | | of the credit or credits exceeds the total payments due under |
12 | | this Section with respect to amounts withheld during the |
13 | | calendar year, the excess may be carried forward and applied |
14 | | against the taxpayer's liability under this Section in the |
15 | | succeeding calendar years as allowed to be carried forward |
16 | | under paragraph (4) of Section 211 of this Act. The credit or |
17 | | credits shall be applied to the earliest year for which there |
18 | | is a tax liability. If there are credits from more than one |
19 | | taxable year that are available to offset a liability, the |
20 | | earlier credit shall be applied first. Each employer who |
21 | | deducts and withholds or is required to deduct and withhold |
22 | | tax under this Act and who retains income tax withholdings |
23 | | under subsection (f) of Section 5-15 of the Economic |
24 | | Development for a Growing Economy Tax Credit Act must make a |
25 | | return with respect to such taxes and retained amounts in the |
26 | | form and manner that the Department, by rule, requires and pay |
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1 | | to the Department or to a depositary designated by the |
2 | | Department those withheld taxes not retained by the taxpayer. |
3 | | For purposes of this subsection (g), the term taxpayer shall |
4 | | include taxpayer and members of the taxpayer's unitary |
5 | | business group as defined under paragraph (27) of subsection |
6 | | (a) of Section 1501 of this Act. This Section is exempt from |
7 | | the provisions of Section 250 of this Act. No credit awarded |
8 | | under the Economic Development for a Growing Economy Tax |
9 | | Credit Act for agreements entered into on or after January 1, |
10 | | 2015 may be credited against payments due under this Section. |
11 | | (g-1) For amounts deducted or withheld after December 31, |
12 | | 2024, a taxpayer who makes an election under the Reimagining |
13 | | Energy and Vehicles in Illinois Act shall be allowed a credit |
14 | | against payments due under this Section for amounts withheld |
15 | | during the first quarterly reporting period beginning after |
16 | | the certificate is issued equal to the portion of the REV |
17 | | Illinois Credit attributable to the incremental income tax |
18 | | attributable to new employees and retained employees as |
19 | | certified by the Department of Commerce and Economic |
20 | | Opportunity pursuant to an agreement with the taxpayer under |
21 | | the Reimagining Energy and Vehicles in Illinois Act for the |
22 | | taxable year. The credit or credits may not reduce the |
23 | | taxpayer's obligation for any payment due under this Section |
24 | | to less than zero. If the amount of the credit or credits |
25 | | exceeds the total payments due under this Section with respect |
26 | | to amounts withheld during the quarterly reporting period, the |
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1 | | excess may be carried forward and applied against the |
2 | | taxpayer's liability under this Section in the succeeding |
3 | | quarterly reporting period as allowed to be carried forward |
4 | | under paragraph (4) of Section 211 of this Act. The credit or |
5 | | credits shall be applied to the earliest quarterly reporting |
6 | | period for which there is a tax liability. If there are credits |
7 | | from more than one quarterly reporting period that are |
8 | | available to offset a liability, the earlier credit shall be |
9 | | applied first. Each employer who deducts and withholds or is |
10 | | required to deduct and withhold tax under this Act and who |
11 | | retains income tax withholdings this subsection must make a |
12 | | return with respect to such taxes and retained amounts in the |
13 | | form and manner that the Department, by rule, requires and pay |
14 | | to the Department or to a depositary designated by the |
15 | | Department those withheld taxes not retained by the taxpayer. |
16 | | For purposes of this subsection (g-1), the term taxpayer shall |
17 | | include taxpayer and members of the taxpayer's unitary |
18 | | business group as defined under paragraph (27) of subsection |
19 | | (a) of Section 1501 of this Act. This Section is exempt from |
20 | | the provisions of Section 250 of this Act. |
21 | | (g-2) For amounts deducted or withheld after December 31, |
22 | | 2024, a taxpayer who makes an election under the Manufacturing |
23 | | Illinois Chips for Real Opportunity (MICRO) Act shall be |
24 | | allowed a credit against payments due under this Section for |
25 | | amounts withheld during the first quarterly reporting period |
26 | | beginning after the certificate is issued equal to the portion |
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1 | | of the MICRO Illinois Credit attributable to the incremental |
2 | | income tax attributable to new employees and retained |
3 | | employees as certified by the Department of Commerce and |
4 | | Economic Opportunity pursuant to an agreement with the |
5 | | taxpayer under the Manufacturing Illinois Chips for Real |
6 | | Opportunity (MICRO) Act for the taxable year. The credit or |
7 | | credits may not reduce the taxpayer's obligation for any |
8 | | payment due under this Section to less than zero. If the amount |
9 | | of the credit or credits exceeds the total payments due under |
10 | | this Section with respect to amounts withheld during the |
11 | | quarterly reporting period, the excess may be carried forward |
12 | | and applied against the taxpayer's liability under this |
13 | | Section in the succeeding quarterly reporting period as |
14 | | allowed to be carried forward under paragraph (4) of Section |
15 | | 211 of this Act. The credit or credits shall be applied to the |
16 | | earliest quarterly reporting period for which there is a tax |
17 | | liability. If there are credits from more than one quarterly |
18 | | reporting period that are available to offset a liability, the |
19 | | earlier credit shall be applied first. Each employer who |
20 | | deducts and withholds or is required to deduct and withhold |
21 | | tax under this Act and who retains income tax withholdings |
22 | | this subsection must make a return with respect to such taxes |
23 | | and retained amounts in the form and manner that the |
24 | | Department, by rule, requires and pay to the Department or to a |
25 | | depositary designated by the Department those withheld taxes |
26 | | not retained by the taxpayer. For purposes of this subsection, |
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1 | | the term taxpayer shall include taxpayer and members of the |
2 | | taxpayer's unitary business group as defined under paragraph |
3 | | (27) of subsection (a) of Section 1501 of this Act. This |
4 | | Section is exempt from the provisions of Section 250 of this |
5 | | Act. |
6 | | (g-3) On and after January 1, 2024, a taxpayer who makes an |
7 | | election under subsection (k) of Section 201 of this Act for a |
8 | | taxable year shall be allowed a credit against payments due |
9 | | under this Section for amounts withheld during the first |
10 | | calendar year beginning after the last day of the taxable year |
11 | | for which the election is made. The credit against withholding |
12 | | shall be equal to the amount of the credit allowed under |
13 | | subsection (k) of Section 201 of this Act. The credit or |
14 | | credits may not reduce the taxpayer's obligation for any |
15 | | payment due under this Section to less than zero. If the amount |
16 | | of the credit or credits exceeds the total payments due under |
17 | | this Section with respect to amounts withheld during the |
18 | | calendar year, the excess may be carried forward and applied |
19 | | against the taxpayer's liability under this Section in the |
20 | | succeeding calendar years as allowed to be carried forward |
21 | | under paragraph (4) of Section 211 of this Act. The credit or |
22 | | credits shall be applied to the earliest year for which there |
23 | | is a tax liability. If there are credits from more than one |
24 | | taxable year that are available to offset a liability, the |
25 | | earlier credit shall be applied first. Each employer who |
26 | | deducts and withholds or is required to deduct and withhold |
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1 | | tax under this Act and who elects to take a credit against |
2 | | taxes imposed under this Section pursuant to subsection (k) of |
3 | | Section 201 of this Act must make a return with respect to such |
4 | | taxes and retained amounts in the form and manner that the |
5 | | Department, by rule, requires and pay to the Department or to a |
6 | | depositary designated by the Department those withheld taxes |
7 | | not retained by the taxpayer. |
8 | | (h) An employer may claim a credit against payments due |
9 | | under this Section for amounts withheld during the first |
10 | | calendar year ending after the date on which a tax credit |
11 | | certificate was issued under Section 35 of the Small Business |
12 | | Job Creation Tax Credit Act. The credit shall be equal to the |
13 | | amount shown on the certificate, but may not reduce the |
14 | | taxpayer's obligation for any payment due under this Section |
15 | | to less than zero. If the amount of the credit exceeds the |
16 | | total payments due under this Section with respect to amounts |
17 | | withheld during the calendar year, the excess may be carried |
18 | | forward and applied against the taxpayer's liability under |
19 | | this Section in the 5 succeeding calendar years. The credit |
20 | | shall be applied to the earliest year for which there is a tax |
21 | | liability. If there are credits from more than one calendar |
22 | | year that are available to offset a liability, the earlier |
23 | | credit shall be applied first. This Section is exempt from the |
24 | | provisions of Section 250 of this Act. |
25 | | (i) Each employer with 50 or fewer full-time equivalent |
26 | | employees during the reporting period may claim a credit |
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1 | | against the payments due under this Section for each qualified |
2 | | employee in an amount equal to the maximum credit allowable. |
3 | | The credit may be taken against payments due for reporting |
4 | | periods that begin on or after January 1, 2020, and end on or |
5 | | before December 31, 2027. An employer may not claim a credit |
6 | | for an employee who has worked fewer than 90 consecutive days |
7 | | immediately preceding the reporting period; however, such |
8 | | credits may accrue during that 90-day period and be claimed |
9 | | against payments under this Section for future reporting |
10 | | periods after the employee has worked for the employer at |
11 | | least 90 consecutive days. In no event may the credit exceed |
12 | | the employer's liability for the reporting period. Each |
13 | | employer who deducts and withholds or is required to deduct |
14 | | and withhold tax under this Act and who retains income tax |
15 | | withholdings under this subsection must make a return with |
16 | | respect to such taxes and retained amounts in the form and |
17 | | manner that the Department, by rule, requires and pay to the |
18 | | Department or to a depositary designated by the Department |
19 | | those withheld taxes not retained by the employer. |
20 | | For each reporting period, the employer may not claim a |
21 | | credit or credits for more employees than the number of |
22 | | employees making less than the minimum or reduced wage for the |
23 | | current calendar year during the last reporting period of the |
24 | | preceding calendar year. Notwithstanding any other provision |
25 | | of this subsection, an employer shall not be eligible for |
26 | | credits for a reporting period unless the average wage paid by |
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1 | | the employer per employee for all employees making less than |
2 | | $55,000 during the reporting period is greater than the |
3 | | average wage paid by the employer per employee for all |
4 | | employees making less than $55,000 during the same reporting |
5 | | period of the prior calendar year. |
6 | | For purposes of this subsection (i): |
7 | | "Compensation paid in Illinois" has the meaning ascribed |
8 | | to that term under Section 304(a)(2)(B) of this Act. |
9 | | "Employer" and "employee" have the meaning ascribed to |
10 | | those terms in the Minimum Wage Law, except that "employee" |
11 | | also includes employees who work for an employer with fewer |
12 | | than 4 employees. Employers that operate more than one |
13 | | establishment pursuant to a franchise agreement or that |
14 | | constitute members of a unitary business group shall aggregate |
15 | | their employees for purposes of determining eligibility for |
16 | | the credit. |
17 | | "Full-time equivalent employees" means the ratio of the |
18 | | number of paid hours during the reporting period and the |
19 | | number of working hours in that period. |
20 | | "Maximum credit" means the percentage listed below of the |
21 | | difference between the amount of compensation paid in Illinois |
22 | | to employees who are paid not more than the required minimum |
23 | | wage reduced by the amount of compensation paid in Illinois to |
24 | | employees who were paid less than the current required minimum |
25 | | wage during the reporting period prior to each increase in the |
26 | | required minimum wage on January 1. If an employer pays an |
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1 | | employee more than the required minimum wage and that employee |
2 | | previously earned less than the required minimum wage, the |
3 | | employer may include the portion that does not exceed the |
4 | | required minimum wage as compensation paid in Illinois to |
5 | | employees who are paid not more than the required minimum |
6 | | wage. |
7 | | (1) 25% for reporting periods beginning on or after |
8 | | January 1, 2020 and ending on or before December 31, 2020; |
9 | | (2) 21% for reporting periods beginning on or after |
10 | | January 1, 2021 and ending on or before December 31, 2021; |
11 | | (3) 17% for reporting periods beginning on or after |
12 | | January 1, 2022 and ending on or before December 31, 2022; |
13 | | (4) 13% for reporting periods beginning on or after |
14 | | January 1, 2023 and ending on or before December 31, 2023; |
15 | | (5) 9% for reporting periods beginning on or after |
16 | | January 1, 2024 and ending on or before December 31, 2024; |
17 | | (6) 5% for reporting periods beginning on or after |
18 | | January 1, 2025 and ending on or before December 31, 2025. |
19 | | The amount computed under this subsection may continue to |
20 | | be claimed for reporting periods beginning on or after January |
21 | | 1, 2026 and: |
22 | | (A) ending on or before December 31, 2026 for |
23 | | employers with more than 5 employees; or |
24 | | (B) ending on or before December 31, 2027 for |
25 | | employers with no more than 5 employees. |
26 | | "Qualified employee" means an employee who is paid not |
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1 | | more than the required minimum wage and has an average wage |
2 | | paid per hour by the employer during the reporting period |
3 | | equal to or greater than his or her average wage paid per hour |
4 | | by the employer during each reporting period for the |
5 | | immediately preceding 12 months. A new qualified employee is |
6 | | deemed to have earned the required minimum wage in the |
7 | | preceding reporting period. |
8 | | "Reporting period" means the quarter for which a return is |
9 | | required to be filed under subsection (b) of this Section. |
10 | | (j) For reporting periods beginning on or after January 1, |
11 | | 2023, if a private employer grants all of its employees the |
12 | | option of taking a paid leave of absence of at least 30 days |
13 | | for the purpose of serving as an organ donor or bone marrow |
14 | | donor, then the private employer may take a credit against the |
15 | | payments due under this Section in an amount equal to the |
16 | | amount withheld under this Section with respect to wages paid |
17 | | while the employee is on organ donation leave, not to exceed |
18 | | $1,000 in withholdings for each employee who takes organ |
19 | | donation leave. To be eligible for the credit, such a leave of |
20 | | absence must be taken without loss of pay, vacation time,
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21 | | compensatory time, personal days, or sick time for at least |
22 | | the first 30 days of the leave of absence. The private employer |
23 | | shall adopt rules governing organ donation leave, including |
24 | | rules that (i) establish conditions and procedures for |
25 | | requesting and approving leave and (ii) require medical |
26 | | documentation of the proposed organ or bone marrow donation |
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1 | | before leave is approved by the private employer. A private |
2 | | employer must provide, in the manner required by the |
3 | | Department, documentation from the employee's medical |
4 | | provider, which the private employer receives from the |
5 | | employee, that verifies the employee's organ donation. The |
6 | | private employer must also provide, in the manner required by |
7 | | the Department, documentation that shows that a qualifying |
8 | | organ donor leave policy was in place and offered to all |
9 | | qualifying employees at the time the leave was taken. For the |
10 | | private employer to receive the tax credit, the employee |
11 | | taking organ donor leave must allow for the applicable medical |
12 | | records to be disclosed to the Department. If the private |
13 | | employer cannot provide the required documentation to the |
14 | | Department, then the private employer is ineligible for the |
15 | | credit under this Section. A private employer must also |
16 | | provide, in the form required by the Department, any |
17 | | additional documentation or information required by the |
18 | | Department to administer the credit under this Section. The |
19 | | credit under this subsection (j) shall be taken within one |
20 | | year after the date upon which the organ donation leave |
21 | | begins. If the leave taken spans into a second tax year, the |
22 | | employer qualifies for the allowable credit in the later of |
23 | | the 2 years. If the amount of credit exceeds the tax liability |
24 | | for the year, the excess may be carried and applied to the tax |
25 | | liability for the 3 taxable years following the excess credit |
26 | | year. The tax credit shall be applied to the earliest year for |
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1 | | which there is a tax liability. If there are credits for more |
2 | | than one year that are available to offset liability, the |
3 | | earlier credit shall be applied first. |
4 | | Nothing in this subsection (j) prohibits a private |
5 | | employer from providing an unpaid leave of absence to its |
6 | | employees for the purpose of serving as an organ donor or bone |
7 | | marrow donor; however, if the employer's policy provides for |
8 | | fewer than 30 days of paid leave for organ or bone marrow |
9 | | donation, then the employer shall not be eligible for the |
10 | | credit under this Section. |
11 | | As used in this subsection (j): |
12 | | "Organ" means any biological tissue of the human body that |
13 | | may be donated by a living donor, including, but not limited |
14 | | to, the kidney, liver, lung, pancreas, intestine, bone, skin, |
15 | | or any subpart of those organs. |
16 | | "Organ donor" means a person from whose body an organ is |
17 | | taken to be transferred to the body of another person. |
18 | | "Private employer" means a sole proprietorship, |
19 | | corporation, partnership, limited liability company, or other |
20 | | entity with one or more employees. "Private employer" does not |
21 | | include a municipality, county, State agency, or other public |
22 | | employer. |
23 | | This subsection (j) is exempt from the provisions of |
24 | | Section 250 of this Act. |
25 | | (Source: P.A. 101-1, eff. 2-19-19; 102-669, eff. 11-16-21; |
26 | | 102-700, Article 30, Section 30-5, eff. 4-19-22; 102-700, |