Bill Text: IL HB2037 | 2019-2020 | 101st General Assembly | Introduced


Bill Title: Amends the Illinois Income Tax Act. Makes changes to a credit awarded for wages paid to qualified veterans. Provides that the credit shall be: (1) $5,000 (instead of 20% of the gross wages, but not to exceed $5,000) for certain veterans who were unemployed at the time of hire; and (2) $1,200 (instead of 10% of the gross wages, but not to exceed $1,200) for other qualified veterans. Changes the definition of "qualified veteran" to include all Illinois residents who are members of the National Guard, reserve, or regular component of the Armed Forces of the United States. Allows the credit to be prorated. Provides that the credit is exempt from the Act's automatic sunset provision. Effective immediately.

Spectrum: Slight Partisan Bill (Republican 2-1)

Status: (Introduced) 2019-12-02 - Added Co-Sponsor Rep. Katie Stuart [HB2037 Detail]

Download: Illinois-2019-HB2037-Introduced.html


101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB2037

Introduced , by Rep. John M. Cabello

SYNOPSIS AS INTRODUCED:
35 ILCS 5/217
35 ILCS 5/217.1

Amends the Illinois Income Tax Act. Makes changes to a credit awarded for wages paid to qualified veterans. Provides that the credit shall be: (1) $5,000 (instead of 20% of the gross wages, but not to exceed $5,000) for certain veterans who were unemployed at the time of hire; and (2) $1,200 (instead of 10% of the gross wages, but not to exceed $1,200) for other qualified veterans. Changes the definition of "qualified veteran" to include all Illinois residents who are members of the National Guard, reserve, or regular component of the Armed Forces of the United States. Allows the credit to be prorated. Provides that the credit is exempt from the Act's automatic sunset provision. Effective immediately.
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FISCAL NOTE ACT MAY APPLY

A BILL FOR

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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
5changing Sections 217 and 217.1 as follows:
6 (35 ILCS 5/217)
7 Sec. 217. Credit for wages paid to qualified veterans.
8 (a) For each taxable year beginning on or after January 1,
92007 and ending on or before December 30, 2010, each taxpayer
10is entitled to a credit against the tax imposed by subsections
11(a) and (b) of Section 201 of this Act in an amount equal to 5%,
12but in no event to exceed $600, of the gross wages paid by the
13taxpayer to a qualified veteran in the course of that veteran's
14sustained employment during the taxable year. For each taxable
15year beginning on or after January 1, 2010, and beginning prior
16to January 1, 2019, each taxpayer is entitled to a credit
17against the tax imposed by subsections (a) and (b) of Section
18201 of this Act in an amount equal to 10%, but in no event to
19exceed $1,200, of the gross wages paid by the taxpayer to a
20qualified veteran in the course of that veteran's sustained
21employment during the taxable year. For each taxable year
22beginning on or after January 1, 2019, each taxpayer is
23entitled to a credit against the tax imposed by subsections (a)

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1and (b) of Section 201 of this Act in an amount equal to $1,200
2for each qualified veteran who is employed by the taxpayer on a
3permanent full-time or a permanent part-time basis for at least
430 hours per week for a period of at least 185 days during the
5taxable year. For each taxable year beginning on or after
6January 1, 2019, if the qualified veteran is employed by the
7employer for less than 185 days, and if the qualified veteran
8is employed by the taxpayer on a permanent full-time or a
9permanent part-time basis for at least 30 hours per week for a
10period of at least 185 days during the next taxable year, then
11the amount of the credit for the taxable year in which the
12qualified veteran was employed for less than 185 days shall be
13prorated. The amount of the prorated credit shall equal the
14maximum amount of the credit for that tax year, divided by 12,
15multiplied by the number of months in the tax year during which
16the qualified veteran was employed by the employer. The
17prorated credit shall be rounded to the nearest dollar. If the
18qualified veteran was employed by the employer during any part
19of a month, then he or she shall be considered to be employed
20for the entire month.
21 For partners, shareholders of Subchapter S corporations,
22and owners of limited liability companies, if the liability
23company is treated as a partnership for purposes of federal and
24State income taxation, there shall be allowed a credit under
25this Section to be determined in accordance with the
26determination of income and distributive share of income under

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1Sections 702 and 704 and Subchapter S of the Internal Revenue
2Code.
3 (b) For purposes of this Section:
4 For taxable years beginning prior to January 1, 2019,
5"qualified "Qualified veteran" means an Illinois resident who:
6(i) was a member of the Armed Forces of the United States, a
7member of the Illinois National Guard, or a member of any
8reserve component of the Armed Forces of the United States;
9(ii) served on active duty in connection with Operation Desert
10Storm, Operation Enduring Freedom, or Operation Iraqi Freedom;
11(iii) has provided, to the taxpayer, documentation showing that
12he or she was honorably discharged; and (iv) was initially
13hired by the taxpayer on or after January 1, 2007.
14 For taxable years beginning on or after January 1, 2019,
15"qualified veteran" means an Illinois resident who is a member
16of the National Guard, reserve, or regular component of the
17Armed Forces of the United States.
18 "Sustained employment" means a period of employment that is
19not less than 185 days during the taxable year.
20 (c) In no event shall a credit under this Section reduce
21the taxpayer's liability to less than zero. If the amount of
22the credit exceeds the tax liability for the year, the excess
23may be carried forward and applied to the tax liability of the
245 taxable years following the excess credit year. The tax
25credit shall be applied to the earliest year for which there is
26a tax liability. If there are credits for more than one year

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1that are available to offset a liability, the earlier credit
2shall be applied first.
3 (d) A taxpayer who claims a credit under this Section for a
4taxable year with respect to a veteran shall not be allowed a
5credit under Section 217.1 of this Act with respect to the same
6veteran for that taxable year.
7 (e) This Section is exempt from the provisions of Section
8250.
9(Source: P.A. 96-101, eff. 1-1-10; 97-767, eff. 7-9-12.)
10 (35 ILCS 5/217.1)
11 Sec. 217.1. Credit for wages paid to qualified unemployed
12veterans.
13 (a) For each taxable year ending on or after December 31,
142012 and on or before December 31, 2016, each taxpayer is
15entitled to a credit against the tax imposed by subsections (a)
16and (b) of Section 201 of this Act in the amount equal to
17$5,000 for each qualified veteran who: (1) 20%, but in no event
18to exceed $5,000, of the gross wages paid by the taxpayer to a
19qualified veteran in the course of that veteran's sustained
20employment during each taxable year ending on or after the date
21of hire by the taxpayer if that veteran was unemployed for an
22aggregate period of 4 weeks or more during the 6-week period
23ending on the Saturday immediately preceding the date he or she
24was hired by the taxpayer; and (2) is employed by the taxpayer
25on a permanent full-time or a permanent part-time basis for at

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1least 30 hours per week for a period of at least (A) 30 days
2during the taxable year in the case of a veteran who was
3unemployed for an aggregate period of 6 months or more during
4the one-year period ending on the date the veteran was hired by
5the taxpayer and (B) 185 days during the taxable year in the
6case of all other qualified unemployed veterans. For each
7taxable year beginning on or after January 1, 2019, if the
8qualified veteran is employed by the employer for less than 185
9days, and if the qualified veteran is employed by the taxpayer
10a permanent full-time or a permanent part-time basis for at
11least 30 hours per week for a period of at least 185 days
12during the next taxable year, then the amount of the credit for
13the taxable year in which the qualified veteran was employed
14for less than 185 days shall be prorated, and the amount of the
15credit shall equal the maximum amount of the credit for that
16tax year, divided by 12, multiplied by the number of months in
17the tax year during which the qualified veteran was employed by
18the employer. The prorated credit shall be rounded to the
19nearest dollar. If the qualified veteran was employed by the
20employer during any part of a month, then he or she shall be
21considered to be employed for the entire month.
22 For partners, shareholders of Subchapter S corporations,
23and owners of limited liability companies, if the liability
24company is treated as a partnership for the purposes of federal
25and State income taxation, there shall be allowed a credit
26under this Section to be determined in accordance with the

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1determination of income and distributive share of income under
2Sections 702 and 704 and Subchapter S of the Internal Revenue
3Code.
4 (b) For the purposes of this Section:
5 "Qualified veteran" means an Illinois resident who: (i) was
6a member of the Armed Forces of the United States, a member of
7the Illinois National Guard, or a member of any reserve
8component of the Armed Forces of the United States; (ii) served
9on active duty on or after September 11, 2001; (iii) has
10provided, to the taxpayer, documentation showing that he or she
11was honorably discharged; and (iv) was initially hired by the
12taxpayer on or after June 1, 2012.
13 "Sustained employment" means (i) a period of employment
14that is not less than 185 days following the date of hire or
15(ii) in the case of a veteran who was unemployed for an
16aggregate period of 6 months or more during the one-year period
17ending on the date the veteran was hired by the taxpayer, a
18period of employment that is more than 30 days following the
19date of hire. The period of sustained employment may be
20completed after the end of the taxable year in which the
21veteran is hired.
22 A veteran is "unemployed" for a week if he or she (i) has
23received unemployment benefits (as defined in Section 202 of
24the Unemployment Insurance Act, including but not limited to
25federally funded unemployment benefits) for the week, or (ii)
26has not been employed since being honorably discharged.

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1 (c) In no event shall a credit under this Section reduce a
2taxpayer's liability to less than zero. If the amount of credit
3exceeds the tax liability for the year, the excess may be
4carried forward and applied to the tax liability for the 5
5taxable years following the excess credit year. The tax credit
6shall be applied to the earliest year for which there is a tax
7liability. If there are credits for more than one year that are
8available to offset liability, the earlier credit shall be
9applied first.
10 (d) A taxpayer who claims a credit under this Section for a
11taxable year with respect to a veteran shall not be allowed a
12credit under Section 217 of this Act with respect to the same
13veteran for that taxable year.
14 (e) This Section is exempt from the provisions of Section
15250.
16(Source: P.A. 97-767, eff. 7-9-12.)
17 Section 99. Effective date. This Act takes effect upon
18becoming law.
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