Illinois General Assembly - Full Text of HB3407
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Full Text of HB3407  101st General Assembly




State of Illinois
2019 and 2020


Introduced , by Rep. Karina Villa


35 ILCS 5/229 new

    Amends the Illinois Income Tax Act. Provides that a taxpayer who has incurred at least $20,000 in undergraduate student loan debt and has at least $5,000 in outstanding undergraduate student loan debt at the time of the application is entitled to a credit as awarded by the Department of Revenue. Provides that Department of Revenue that the amount of the credit shall not exceed $ 5,000 per taxpayer. Provides that the total amount of credits approved by the Department of Revenue under the provisions of the amendatory Act may not exceed $5,000,000 in any taxable year. Contains recapture provisions. Effective immediately.

LRB101 08958 HLH 54049 b






HB3407LRB101 08958 HLH 54049 b

1    AN ACT concerning revenue.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Illinois Income Tax Act is amended by adding
5Section 229 as follows:
6    (35 ILCS 5/229 new)
7    Sec. 229. Student loan payments.
8    (a) For taxable years beginning on or after January 1,
92019, a qualified taxpayer is entitled to a credit against the
10tax imposed by subsections (a) and (b) of Section 201 for the
11taxable year in which the Department certifies a tax credit
12under this Section.
13    (b) By September 15 of each year, a qualified taxpayer
14shall submit an application to the Department for the credit
15allowed under this Section. The taxpayer shall submit with the
16application an assurance that the he or she will use any credit
17approved under this Section for the repayment of his or her
18undergraduate student loan debt as soon as practicable. By
19December 15 of each year, the Department shall certify to the
20individual the amount of any tax credit approved under this
21Section, not to exceed $ 5,000. For any taxable year, the total
22amount of credits approved by the Department under this Section
23may not exceed $5,000,000.



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1    The total amount of the credit claimed under this Section
2shall be recaptured if the individual does not use the credit
3amount for the repayment of the individual's undergraduate
4student loan debt within 2 years from the close of the taxable
5year for which the credit is claimed. If the amount is
6recaptured, the individual who claimed the credit shall pay the
7total amount of the credit claimed as taxes payable to the
8State for the taxable year in which the event requiring
9recapture of the credit occurs.
10    The Department shall prioritize tax credit recipients and
11amounts based on qualified taxpayers who:
12        (1) have higher debt burden to income ratios;
13        (2) graduated from a public university located in the
14    State;
15        (3) did not receive a tax credit in a prior year; or
16        (4) were eligible for in-State tuition.
17    (c) In no event shall a credit under this Section reduce
18the taxpayer's liability to less than zero. If the amount of
19the credit exceeds the tax liability for the year, the excess
20may be carried forward and applied to the tax liability of the
215 taxable years following the excess credit year. The tax
22credit shall be applied to the earliest year for which there is
23a tax liability. If there are credits for more than one year
24that are available to offset a liability, the earlier credit
25shall be applied first.
26    (e) As used in this Section "qualified taxpayer" means a



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1taxpayer who:
2        (1) has incurred at least $20,000 in undergraduate
3    student loan debt; and
4        (2) has at least $5,000 in outstanding undergraduate
5    student loan debt when submitting an application under
6    subsection (b) of this Section.
7    (f) This Section is exempt from the provisions of Section
9    Section 99. Effective date. This Act takes effect upon
10becoming law.