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90_HB0999enr
35 ILCS 5/201 from Ch. 120, par. 2-201
Amends the Illinois Income Tax Act. Provides that
beginning with tax years ending after December 31, 1997, a
taxpayer who is the custodian of a qualified pupil shall be
allowed an income tax credit equal to $500 per pupil for
qualified education expenses. Provides that any credit in
excess of the tax liability shall be refunded to the
taxpayer. Provides that the pupil must be (i) a resident of
Illinois, (ii) under 21 years of age at the close of the
school year for which the credit is sought, and (iii) a
full-time pupil enrolled in a kindergarten through twelfth
grade education program at any public or nonpublic elementary
school that meets certain standards. Provides that qualified
education expenses are costs in excess of $250 that are
incurred on behalf of the pupil for services at the school.
Provides that the credit is available to the parent, parents,
or legal guardian of the pupil. Exempts the credit from the
sunset provisions.
LRB9004305KDks
HB0999 Enrolled LRB9004305KDks
1 AN ACT to amend the Illinois Income Tax Act by changing
2 Section 201.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Illinois Income Tax Act is amended by
6 changing Section 201 as follows:
7 (35 ILCS 5/201) (from Ch. 120, par. 2-201)
8 Sec. 201. Tax Imposed.
9 (a) In general. A tax measured by net income is hereby
10 imposed on every individual, corporation, trust and estate
11 for each taxable year ending after July 31, 1969 on the
12 privilege of earning or receiving income in or as a resident
13 of this State. Such tax shall be in addition to all other
14 occupation or privilege taxes imposed by this State or by any
15 municipal corporation or political subdivision thereof.
16 (b) Rates. The tax imposed by subsection (a) of this
17 Section shall be determined as follows:
18 (1) In the case of an individual, trust or estate,
19 for taxable years ending prior to July 1, 1989, an amount
20 equal to 2 1/2% of the taxpayer's net income for the
21 taxable year.
22 (2) In the case of an individual, trust or estate,
23 for taxable years beginning prior to July 1, 1989 and
24 ending after June 30, 1989, an amount equal to the sum of
25 (i) 2 1/2% of the taxpayer's net income for the period
26 prior to July 1, 1989, as calculated under Section 202.3,
27 and (ii) 3% of the taxpayer's net income for the period
28 after June 30, 1989, as calculated under Section 202.3.
29 (3) In the case of an individual, trust or estate,
30 for taxable years beginning after June 30, 1989, an
31 amount equal to 3% of the taxpayer's net income for the
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1 taxable year.
2 (4) (Blank).
3 (5) (Blank).
4 (6) In the case of a corporation, for taxable years
5 ending prior to July 1, 1989, an amount equal to 4% of
6 the taxpayer's net income for the taxable year.
7 (7) In the case of a corporation, for taxable years
8 beginning prior to July 1, 1989 and ending after June 30,
9 1989, an amount equal to the sum of (i) 4% of the
10 taxpayer's net income for the period prior to July 1,
11 1989, as calculated under Section 202.3, and (ii) 4.8% of
12 the taxpayer's net income for the period after June 30,
13 1989, as calculated under Section 202.3.
14 (8) In the case of a corporation, for taxable years
15 beginning after June 30, 1989, an amount equal to 4.8% of
16 the taxpayer's net income for the taxable year.
17 (c) Beginning on July 1, 1979 and thereafter, in
18 addition to such income tax, there is also hereby imposed the
19 Personal Property Tax Replacement Income Tax measured by net
20 income on every corporation (including Subchapter S
21 corporations), partnership and trust, for each taxable year
22 ending after June 30, 1979. Such taxes are imposed on the
23 privilege of earning or receiving income in or as a resident
24 of this State. The Personal Property Tax Replacement Income
25 Tax shall be in addition to the income tax imposed by
26 subsections (a) and (b) of this Section and in addition to
27 all other occupation or privilege taxes imposed by this State
28 or by any municipal corporation or political subdivision
29 thereof.
30 (d) Additional Personal Property Tax Replacement Income
31 Tax Rates. The personal property tax replacement income tax
32 imposed by this subsection and subsection (c) of this Section
33 in the case of a corporation, other than a Subchapter S
34 corporation, shall be an additional amount equal to 2.85% of
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1 such taxpayer's net income for the taxable year, except that
2 beginning on January 1, 1981, and thereafter, the rate of
3 2.85% specified in this subsection shall be reduced to 2.5%,
4 and in the case of a partnership, trust or a Subchapter S
5 corporation shall be an additional amount equal to 1.5% of
6 such taxpayer's net income for the taxable year.
7 (e) Investment credit. A taxpayer shall be allowed a
8 credit against the Personal Property Tax Replacement Income
9 Tax for investment in qualified property.
10 (1) A taxpayer shall be allowed a credit equal to
11 .5% of the basis of qualified property placed in service
12 during the taxable year, provided such property is placed
13 in service on or after July 1, 1984. There shall be
14 allowed an additional credit equal to .5% of the basis of
15 qualified property placed in service during the taxable
16 year, provided such property is placed in service on or
17 after July 1, 1986, and the taxpayer's base employment
18 within Illinois has increased by 1% or more over the
19 preceding year as determined by the taxpayer's employment
20 records filed with the Illinois Department of Employment
21 Security. Taxpayers who are new to Illinois shall be
22 deemed to have met the 1% growth in base employment for
23 the first year in which they file employment records with
24 the Illinois Department of Employment Security. The
25 provisions added to this Section by Public Act 85-1200
26 (and restored by Public Act 87-895) shall be construed as
27 declaratory of existing law and not as a new enactment.
28 If, in any year, the increase in base employment within
29 Illinois over the preceding year is less than 1%, the
30 additional credit shall be limited to that percentage
31 times a fraction, the numerator of which is .5% and the
32 denominator of which is 1%, but shall not exceed .5%.
33 The investment credit shall not be allowed to the extent
34 that it would reduce a taxpayer's liability in any tax
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1 year below zero, nor may any credit for qualified
2 property be allowed for any year other than the year in
3 which the property was placed in service in Illinois. For
4 tax years ending on or after December 31, 1987, and on or
5 before December 31, 1988, the credit shall be allowed for
6 the tax year in which the property is placed in service,
7 or, if the amount of the credit exceeds the tax liability
8 for that year, whether it exceeds the original liability
9 or the liability as later amended, such excess may be
10 carried forward and applied to the tax liability of the 5
11 taxable years following the excess credit years if the
12 taxpayer (i) makes investments which cause the creation
13 of a minimum of 2,000 full-time equivalent jobs in
14 Illinois, (ii) is located in an enterprise zone
15 established pursuant to the Illinois Enterprise Zone Act
16 and (iii) is certified by the Department of Commerce and
17 Community Affairs as complying with the requirements
18 specified in clause (i) and (ii) by July 1, 1986. The
19 Department of Commerce and Community Affairs shall notify
20 the Department of Revenue of all such certifications
21 immediately. For tax years ending after December 31,
22 1988, the credit shall be allowed for the tax year in
23 which the property is placed in service, or, if the
24 amount of the credit exceeds the tax liability for that
25 year, whether it exceeds the original liability or the
26 liability as later amended, such excess may be carried
27 forward and applied to the tax liability of the 5 taxable
28 years following the excess credit years. The credit shall
29 be applied to the earliest year for which there is a
30 liability. If there is credit from more than one tax year
31 that is available to offset a liability, earlier credit
32 shall be applied first.
33 (2) The term "qualified property" means property
34 which:
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1 (A) is tangible, whether new or used,
2 including buildings and structural components of
3 buildings and signs that are real property, but not
4 including land or improvements to real property that
5 are not a structural component of a building such as
6 landscaping, sewer lines, local access roads,
7 fencing, parking lots, and other appurtenances;
8 (B) is depreciable pursuant to Section 167 of
9 the Internal Revenue Code, except that "3-year
10 property" as defined in Section 168(c)(2)(A) of that
11 Code is not eligible for the credit provided by this
12 subsection (e);
13 (C) is acquired by purchase as defined in
14 Section 179(d) of the Internal Revenue Code;
15 (D) is used in Illinois by a taxpayer who is
16 primarily engaged in manufacturing, or in mining
17 coal or fluorite, or in retailing; and
18 (E) has not previously been used in Illinois
19 in such a manner and by such a person as would
20 qualify for the credit provided by this subsection
21 (e) or subsection (f).
22 (3) For purposes of this subsection (e),
23 "manufacturing" means the material staging and production
24 of tangible personal property by procedures commonly
25 regarded as manufacturing, processing, fabrication, or
26 assembling which changes some existing material into new
27 shapes, new qualities, or new combinations. For purposes
28 of this subsection (e) the term "mining" shall have the
29 same meaning as the term "mining" in Section 613(c) of
30 the Internal Revenue Code. For purposes of this
31 subsection (e), the term "retailing" means the sale of
32 tangible personal property or services rendered in
33 conjunction with the sale of tangible consumer goods or
34 commodities.
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1 (4) The basis of qualified property shall be the
2 basis used to compute the depreciation deduction for
3 federal income tax purposes.
4 (5) If the basis of the property for federal income
5 tax depreciation purposes is increased after it has been
6 placed in service in Illinois by the taxpayer, the amount
7 of such increase shall be deemed property placed in
8 service on the date of such increase in basis.
9 (6) The term "placed in service" shall have the
10 same meaning as under Section 46 of the Internal Revenue
11 Code.
12 (7) If during any taxable year, any property ceases
13 to be qualified property in the hands of the taxpayer
14 within 48 months after being placed in service, or the
15 situs of any qualified property is moved outside Illinois
16 within 48 months after being placed in service, the
17 Personal Property Tax Replacement Income Tax for such
18 taxable year shall be increased. Such increase shall be
19 determined by (i) recomputing the investment credit which
20 would have been allowed for the year in which credit for
21 such property was originally allowed by eliminating such
22 property from such computation and, (ii) subtracting such
23 recomputed credit from the amount of credit previously
24 allowed. For the purposes of this paragraph (7), a
25 reduction of the basis of qualified property resulting
26 from a redetermination of the purchase price shall be
27 deemed a disposition of qualified property to the extent
28 of such reduction.
29 (8) Unless the investment credit is extended by
30 law, the basis of qualified property shall not include
31 costs incurred after December 31, 2003, except for costs
32 incurred pursuant to a binding contract entered into on
33 or before December 31, 2003.
34 (f) Investment credit; Enterprise Zone.
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1 (1) A taxpayer shall be allowed a credit against
2 the tax imposed by subsections (a) and (b) of this
3 Section for investment in qualified property which is
4 placed in service in an Enterprise Zone created pursuant
5 to the Illinois Enterprise Zone Act. For partners and for
6 shareholders of Subchapter S corporations, there shall be
7 allowed a credit under this subsection (f) to be
8 determined in accordance with the determination of income
9 and distributive share of income under Sections 702 and
10 704 and Subchapter S of the Internal Revenue Code. The
11 credit shall be .5% of the basis for such property. The
12 credit shall be available only in the taxable year in
13 which the property is placed in service in the Enterprise
14 Zone and shall not be allowed to the extent that it would
15 reduce a taxpayer's liability for the tax imposed by
16 subsections (a) and (b) of this Section to below zero.
17 For tax years ending on or after December 31, 1985, the
18 credit shall be allowed for the tax year in which the
19 property is placed in service, or, if the amount of the
20 credit exceeds the tax liability for that year, whether
21 it exceeds the original liability or the liability as
22 later amended, such excess may be carried forward and
23 applied to the tax liability of the 5 taxable years
24 following the excess credit year. The credit shall be
25 applied to the earliest year for which there is a
26 liability. If there is credit from more than one tax year
27 that is available to offset a liability, the credit
28 accruing first in time shall be applied first.
29 (2) The term qualified property means property
30 which:
31 (A) is tangible, whether new or used,
32 including buildings and structural components of
33 buildings;
34 (B) is depreciable pursuant to Section 167 of
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1 the Internal Revenue Code, except that "3-year
2 property" as defined in Section 168(c)(2)(A) of that
3 Code is not eligible for the credit provided by this
4 subsection (f);
5 (C) is acquired by purchase as defined in
6 Section 179(d) of the Internal Revenue Code;
7 (D) is used in the Enterprise Zone by the
8 taxpayer; and
9 (E) has not been previously used in Illinois
10 in such a manner and by such a person as would
11 qualify for the credit provided by this subsection
12 (f) or subsection (e).
13 (3) The basis of qualified property shall be the
14 basis used to compute the depreciation deduction for
15 federal income tax purposes.
16 (4) If the basis of the property for federal income
17 tax depreciation purposes is increased after it has been
18 placed in service in the Enterprise Zone by the taxpayer,
19 the amount of such increase shall be deemed property
20 placed in service on the date of such increase in basis.
21 (5) The term "placed in service" shall have the
22 same meaning as under Section 46 of the Internal Revenue
23 Code.
24 (6) If during any taxable year, any property ceases
25 to be qualified property in the hands of the taxpayer
26 within 48 months after being placed in service, or the
27 situs of any qualified property is moved outside the
28 Enterprise Zone within 48 months after being placed in
29 service, the tax imposed under subsections (a) and (b) of
30 this Section for such taxable year shall be increased.
31 Such increase shall be determined by (i) recomputing the
32 investment credit which would have been allowed for the
33 year in which credit for such property was originally
34 allowed by eliminating such property from such
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1 computation, and (ii) subtracting such recomputed credit
2 from the amount of credit previously allowed. For the
3 purposes of this paragraph (6), a reduction of the basis
4 of qualified property resulting from a redetermination of
5 the purchase price shall be deemed a disposition of
6 qualified property to the extent of such reduction.
7 (g) Jobs Tax Credit; Enterprise Zone and Foreign
8 Trade Zone or Sub-Zone.
9 (1) A taxpayer conducting a trade or business in an
10 enterprise zone or a High Impact Business designated by
11 the Department of Commerce and Community Affairs
12 conducting a trade or business in a federally designated
13 Foreign Trade Zone or Sub-Zone shall be allowed a credit
14 against the tax imposed by subsections (a) and (b) of
15 this Section in the amount of $500 per eligible employee
16 hired to work in the zone during the taxable year.
17 (2) To qualify for the credit:
18 (A) the taxpayer must hire 5 or more eligible
19 employees to work in an enterprise zone or federally
20 designated Foreign Trade Zone or Sub-Zone during the
21 taxable year;
22 (B) the taxpayer's total employment within the
23 enterprise zone or federally designated Foreign
24 Trade Zone or Sub-Zone must increase by 5 or more
25 full-time employees beyond the total employed in
26 that zone at the end of the previous tax year for
27 which a jobs tax credit under this Section was
28 taken, or beyond the total employed by the taxpayer
29 as of December 31, 1985, whichever is later; and
30 (C) the eligible employees must be employed
31 180 consecutive days in order to be deemed hired for
32 purposes of this subsection.
33 (3) An "eligible employee" means an employee who
34 is:
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1 (A) Certified by the Department of Commerce
2 and Community Affairs as "eligible for services"
3 pursuant to regulations promulgated in accordance
4 with Title II of the Job Training Partnership Act,
5 Training Services for the Disadvantaged or Title III
6 of the Job Training Partnership Act, Employment and
7 Training Assistance for Dislocated Workers Program.
8 (B) Hired after the enterprise zone or
9 federally designated Foreign Trade Zone or Sub-Zone
10 was designated or the trade or business was located
11 in that zone, whichever is later.
12 (C) Employed in the enterprise zone or Foreign
13 Trade Zone or Sub-Zone. An employee is employed in
14 an enterprise zone or federally designated Foreign
15 Trade Zone or Sub-Zone if his services are rendered
16 there or it is the base of operations for the
17 services performed.
18 (D) A full-time employee working 30 or more
19 hours per week.
20 (4) For tax years ending on or after December 31,
21 1985 and prior to December 31, 1988, the credit shall be
22 allowed for the tax year in which the eligible employees
23 are hired. For tax years ending on or after December 31,
24 1988, the credit shall be allowed for the tax year
25 immediately following the tax year in which the eligible
26 employees are hired. If the amount of the credit exceeds
27 the tax liability for that year, whether it exceeds the
28 original liability or the liability as later amended,
29 such excess may be carried forward and applied to the tax
30 liability of the 5 taxable years following the excess
31 credit year. The credit shall be applied to the earliest
32 year for which there is a liability. If there is credit
33 from more than one tax year that is available to offset a
34 liability, earlier credit shall be applied first.
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1 (5) The Department of Revenue shall promulgate such
2 rules and regulations as may be deemed necessary to carry
3 out the purposes of this subsection (g).
4 (6) The credit shall be available for eligible
5 employees hired on or after January 1, 1986.
6 (h) Investment credit; High Impact Business.
7 (1) Subject to subsection (b) of Section 5.5 of the
8 Illinois Enterprise Zone Act, a taxpayer shall be allowed
9 a credit against the tax imposed by subsections (a) and
10 (b) of this Section for investment in qualified property
11 which is placed in service by a Department of Commerce
12 and Community Affairs designated High Impact Business.
13 The credit shall be .5% of the basis for such property.
14 The credit shall not be available until the minimum
15 investments in qualified property set forth in Section
16 5.5 of the Illinois Enterprise Zone Act have been
17 satisfied and shall not be allowed to the extent that it
18 would reduce a taxpayer's liability for the tax imposed
19 by subsections (a) and (b) of this Section to below zero.
20 The credit applicable to such minimum investments shall
21 be taken in the taxable year in which such minimum
22 investments have been completed. The credit for
23 additional investments beyond the minimum investment by a
24 designated high impact business shall be available only
25 in the taxable year in which the property is placed in
26 service and shall not be allowed to the extent that it
27 would reduce a taxpayer's liability for the tax imposed
28 by subsections (a) and (b) of this Section to below zero.
29 For tax years ending on or after December 31, 1987, the
30 credit shall be allowed for the tax year in which the
31 property is placed in service, or, if the amount of the
32 credit exceeds the tax liability for that year, whether
33 it exceeds the original liability or the liability as
34 later amended, such excess may be carried forward and
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1 applied to the tax liability of the 5 taxable years
2 following the excess credit year. The credit shall be
3 applied to the earliest year for which there is a
4 liability. If there is credit from more than one tax
5 year that is available to offset a liability, the credit
6 accruing first in time shall be applied first.
7 Changes made in this subdivision (h)(1) by Public
8 Act 88-670 restore changes made by Public Act 85-1182 and
9 reflect existing law.
10 (2) The term qualified property means property
11 which:
12 (A) is tangible, whether new or used,
13 including buildings and structural components of
14 buildings;
15 (B) is depreciable pursuant to Section 167 of
16 the Internal Revenue Code, except that "3-year
17 property" as defined in Section 168(c)(2)(A) of that
18 Code is not eligible for the credit provided by this
19 subsection (h);
20 (C) is acquired by purchase as defined in
21 Section 179(d) of the Internal Revenue Code; and
22 (D) is not eligible for the Enterprise Zone
23 Investment Credit provided by subsection (f) of this
24 Section.
25 (3) The basis of qualified property shall be the
26 basis used to compute the depreciation deduction for
27 federal income tax purposes.
28 (4) If the basis of the property for federal income
29 tax depreciation purposes is increased after it has been
30 placed in service in a federally designated Foreign Trade
31 Zone or Sub-Zone located in Illinois by the taxpayer, the
32 amount of such increase shall be deemed property placed
33 in service on the date of such increase in basis.
34 (5) The term "placed in service" shall have the
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1 same meaning as under Section 46 of the Internal Revenue
2 Code.
3 (6) If during any taxable year ending on or before
4 December 31, 1996, any property ceases to be qualified
5 property in the hands of the taxpayer within 48 months
6 after being placed in service, or the situs of any
7 qualified property is moved outside Illinois within 48
8 months after being placed in service, the tax imposed
9 under subsections (a) and (b) of this Section for such
10 taxable year shall be increased. Such increase shall be
11 determined by (i) recomputing the investment credit which
12 would have been allowed for the year in which credit for
13 such property was originally allowed by eliminating such
14 property from such computation, and (ii) subtracting such
15 recomputed credit from the amount of credit previously
16 allowed. For the purposes of this paragraph (6), a
17 reduction of the basis of qualified property resulting
18 from a redetermination of the purchase price shall be
19 deemed a disposition of qualified property to the extent
20 of such reduction.
21 (7) Beginning with tax years ending after December
22 31, 1996, if a taxpayer qualifies for the credit under
23 this subsection (h) and thereby is granted a tax
24 abatement and the taxpayer relocates its entire facility
25 in violation of the explicit terms and length of the
26 contract under Section 18-183 of the Property Tax Code,
27 the tax imposed under subsections (a) and (b) of this
28 Section shall be increased for the taxable year in which
29 the taxpayer relocated its facility by an amount equal to
30 the amount of credit received by the taxpayer under this
31 subsection (h).
32 (i) A credit shall be allowed against the tax imposed by
33 subsections (a) and (b) of this Section for the tax imposed
34 by subsections (c) and (d) of this Section. This credit
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1 shall be computed by multiplying the tax imposed by
2 subsections (c) and (d) of this Section by a fraction, the
3 numerator of which is base income allocable to Illinois and
4 the denominator of which is Illinois base income, and further
5 multiplying the product by the tax rate imposed by
6 subsections (a) and (b) of this Section.
7 Any credit earned on or after December 31, 1986 under
8 this subsection which is unused in the year the credit is
9 computed because it exceeds the tax liability imposed by
10 subsections (a) and (b) for that year (whether it exceeds the
11 original liability or the liability as later amended) may be
12 carried forward and applied to the tax liability imposed by
13 subsections (a) and (b) of the 5 taxable years following the
14 excess credit year. This credit shall be applied first to
15 the earliest year for which there is a liability. If there
16 is a credit under this subsection from more than one tax year
17 that is available to offset a liability the earliest credit
18 arising under this subsection shall be applied first.
19 If, during any taxable year ending on or after December
20 31, 1986, the tax imposed by subsections (c) and (d) of this
21 Section for which a taxpayer has claimed a credit under this
22 subsection (i) is reduced, the amount of credit for such tax
23 shall also be reduced. Such reduction shall be determined by
24 recomputing the credit to take into account the reduced tax
25 imposed by subsection (c) and (d). If any portion of the
26 reduced amount of credit has been carried to a different
27 taxable year, an amended return shall be filed for such
28 taxable year to reduce the amount of credit claimed.
29 (j) Training expense credit. Beginning with tax years
30 ending on or after December 31, 1986, a taxpayer shall be
31 allowed a credit against the tax imposed by subsection (a)
32 and (b) under this Section for all amounts paid or accrued,
33 on behalf of all persons employed by the taxpayer in Illinois
34 or Illinois residents employed outside of Illinois by a
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1 taxpayer, for educational or vocational training in
2 semi-technical or technical fields or semi-skilled or skilled
3 fields, which were deducted from gross income in the
4 computation of taxable income. The credit against the tax
5 imposed by subsections (a) and (b) shall be 1.6% of such
6 training expenses. For partners and for shareholders of
7 subchapter S corporations, there shall be allowed a credit
8 under this subsection (j) to be determined in accordance with
9 the determination of income and distributive share of income
10 under Sections 702 and 704 and subchapter S of the Internal
11 Revenue Code.
12 Any credit allowed under this subsection which is unused
13 in the year the credit is earned may be carried forward to
14 each of the 5 taxable years following the year for which the
15 credit is first computed until it is used. This credit shall
16 be applied first to the earliest year for which there is a
17 liability. If there is a credit under this subsection from
18 more than one tax year that is available to offset a
19 liability the earliest credit arising under this subsection
20 shall be applied first.
21 (k) Research and development credit.
22 Beginning with tax years ending after July 1, 1990, a
23 taxpayer shall be allowed a credit against the tax imposed by
24 subsections (a) and (b) of this Section for increasing
25 research activities in this State. The credit allowed
26 against the tax imposed by subsections (a) and (b) shall be
27 equal to 6 1/2% of the qualifying expenditures for increasing
28 research activities in this State.
29 For purposes of this subsection, "qualifying
30 expenditures" means the qualifying expenditures as defined
31 for the federal credit for increasing research activities
32 which would be allowable under Section 41 of the Internal
33 Revenue Code and which are conducted in this State,
34 "qualifying expenditures for increasing research activities
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1 in this State" means the excess of qualifying expenditures
2 for the taxable year in which incurred over qualifying
3 expenditures for the base period, "qualifying expenditures
4 for the base period" means the average of the qualifying
5 expenditures for each year in the base period, and "base
6 period" means the 3 taxable years immediately preceding the
7 taxable year for which the determination is being made.
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
11 over as a credit against the tax liability for the following
12 5 taxable years or until it has been fully used, whichever
13 occurs first.
14 If an unused credit is carried forward to a given year
15 from 2 or more earlier years, that credit arising in the
16 earliest year will be applied first against the tax liability
17 for the given year. If a tax liability for the given year
18 still remains, the credit from the next earliest year will
19 then be applied, and so on, until all credits have been used
20 or no tax liability for the given year remains. Any
21 remaining unused credit or credits then will be carried
22 forward to the next following year in which a tax liability
23 is incurred, except that no credit can be carried forward to
24 a year which is more than 5 years after the year in which the
25 expense for which the credit is given was incurred.
26 Unless extended by law, the credit shall not include
27 costs incurred after December 31, 1999, except for costs
28 incurred pursuant to a binding contract entered into on or
29 before December 31, 1999.
30 (l) Education expense credit.
31 Beginning with tax years ending after December 31, 1997,
32 a taxpayer who is the custodian of one or more qualifying
33 pupils shall be allowed a credit against the tax imposed by
34 subsections (a) and (b) of this Section for qualified
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1 education expenses incurred on behalf of the qualifying
2 pupils. The credit shall be equal to 25% of qualified
3 education expenses, but in no event may the total credit
4 under this Section claimed by a family that is the custodian
5 of qualifying pupils exceed $500. Any credit in excess of the
6 tax liability for the taxable year shall be refunded to the
7 taxpayer. This subsection is exempt from the provisions of
8 Section 250 of this Act.
9 For purposes of this subsection;
10 "Qualifying pupils" means individuals who (i) are
11 residents of the State of Illinois, (ii) are under the age of
12 21 at the close of the school year for which a credit is
13 sought, and (iii) during the school year for which a credit
14 is sought were full-time pupils enrolled in a kindergarten
15 through twelfth grade education program at any school, as
16 defined in this subsection.
17 "Qualified education expense" means the amount incurred
18 on behalf of a qualifying pupil in excess of $250 for
19 tuition, book fees, and lab fees at the school in which the
20 pupil is enrolled during the regular school year.
21 "School" means any public or nonpublic elementary or
22 secondary school in Illinois that is in compliance with Title
23 VI of the Civil Rights Act of 1964 and attendance at which
24 satisfies the requirements of Section 26-1 of the School
25 Code, except that nothing shall be construed to require a
26 child to attend any particular public or nonpublic school to
27 qualify for the credit under this Section.
28 "Custodian" means, with respect to qualifying pupils, an
29 Illinois resident who is a parent, the parents, a legal
30 guardian, or the legal guardians of the qualifying pupils.
31 (Source: P.A. 88-45; 88-89; 88-141; 88-547, eff. 6-30-94;
32 88-670, eff. 12-2-94; 89-235, eff. 8-4-95; 89-519, eff.
33 7-18-96; 89-591, eff. 8-1-96.)