Bill Text: IL SB3165 | 2009-2010 | 96th General Assembly | Introduced

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Bill Title: Amends the Illinois Income Tax Act. Creates an income tax credit for taxpayers, other than taxpayers that receive credits under the Economic Development for a Growing Economy Tax Credit Act, in an amount equal to $2,100 for each new employee who is (i) hired by the taxpayer on and after the effective date of the amendatory Act and (ii) employed by the taxpayer for a period of exactly 12 consecutive months at any point during the taxable year. Provides that all or a portion of the credit may be used as a credit against the taxpayer's withholding tax liability. Provides that the credit may be carried forward. Effective immediately.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2010-03-19 - Rule 3-9(a) / Re-referred to Assignments [SB3165 Detail]

Download: Illinois-2009-SB3165-Introduced.html

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96TH GENERAL ASSEMBLY State of Illinois 2009 and 2010 SB3165 Introduced 2/9/2010, by Sen. Bill Brady SYNOPSIS AS INTRODUCED:
35 ILCS 5/219 new
35 ILCS 5/704A
Amends the Illinois Income Tax Act. Creates an income tax credit for taxpayers, other than taxpayers that receive credits under the Economic Development for a Growing Economy Tax Credit Act, in an amount equal to $2,100 for each new employee who is (i) hired by the taxpayer on and after the effective date of the amendatory Act and (ii) employed by the taxpayer for a period of exactly 12 consecutive months at any point during the taxable year. Provides that all or a portion of the credit may be used as a credit against the taxpayer's withholding tax liability. Provides that the credit may be carried forward. Effective immediately.
LRB096 15788 HLH 31028 b
FISCAL NOTE ACT MAY APPLY
A BILL FOR
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AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Income Tax Act is amended by
changing Section 704A and by adding Section 219 as follows:
(35 ILCS 5/219 new)
Sec. 219. New employee credit. For taxable years ending on
or after December 31, 2010, each taxpayer, other than a
taxpayer that receives credits under the Economic Development
for a Growing Economy Tax Credit Act during the taxable year,
is entitled to a credit against (i) the tax imposed by
subsections (a) and (b) of Section 201 or (ii) the taxpayer's
withholding tax liability under Article 7 of this Act, in an
amount equal to $2,100 for each new employee who is (i) hired
by the taxpayer on and after the effective date of this
amendatory Act of the 96th General Assembly and (ii) employed
by the taxpayer for a period of exactly 12 consecutive months
at any point during the taxable year. If the amount of the
credit awarded exceeds the taxpayer's income tax liability for
that taxable year, then the excess may be carried forward and
applied to the tax liability of the next taxable year until the
entire amount of the credit has been claimed. If there are
credits for more than one taxable year that are available to

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offset a liability, the earlier credit shall be applied first.
In addition, the taxpayer may elect to use all or a portion
of the credit awarded under this Section as a credit against
its withholding tax liability under Article 7 of this Act. Such
an election shall be made in the form and manner prescribed by
the Department by rule and, once made, shall be irrevocable.
For the purposes of this Section, "new employee" means a
full-time employee of the taxpayer who is hired to perform a
job that was not previously performed by another employee. The
term "new employee" does not include (i) an employee of the
taxpayer who was previously employed in Illinois by a related
member of the taxpayer and whose employment was shifted to the
taxpayer during the taxable year or (ii) a child, grandchild,
parent, or spouse, other than a spouse who is legally separated
from the individual, of any individual who has a direct or an
indirect ownership interest of at least 5% in the profits,
capital, or value of the taxpayer.
For the purposes of this Section, the term "related member"
means:
(1) an individual stockholder, if the stockholder and
the members of the stockholder's family (as defined in
Section 318 of the Internal Revenue Code) own directly,
indirectly, beneficially, or constructively, in the
aggregate, at least 50% of the value of the taxpayer's
outstanding stock;
(2) a partnership, estate, or trust and any partner or

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beneficiary, if the partnership, estate, or trust, and its
partners or beneficiaries own directly, indirectly,
beneficially, or constructively, in the aggregate, at
least 50% of the profits, capital, stock, or value of the
taxpayer;
(3) a corporation, and any party related to the
corporation in a manner that would require an attribution
of stock from the corporation to the party or from the
party to the corporation under the attribution rules of
Section 318 of the Internal Revenue Code, if the taxpayer
owns directly, indirectly, beneficially, or constructively
at least 50% of the value of the corporation's outstanding
stock;
(4) a corporation and any party related to that
corporation in a manner that would require an attribution
of stock from the corporation to the party or from the
party to the corporation under the attribution rules of
Section 318 of the Internal Revenue Code, if the
corporation and all such related parties own in the
aggregate at least 50% of the profits, capital, stock, or
value of the taxpayer; or
(5) a person to or from whom there is attribution of
stock ownership in accordance with Section 1563(e) of the
Internal Revenue Code, except, for purposes of determining
whether a person is a related member under this paragraph,
20% shall be substituted for 5% wherever 5% appears in

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Section 1563(e) of the Internal Revenue Code.
(35 ILCS 5/704A)
Sec. 704A. Employer's return and payment of tax withheld.
(a) In general, every employer who deducts and withholds or
is required to deduct and withhold tax under this Act on or
after January 1, 2008 shall make those payments and returns as
provided in this Section.
(b) Returns. Every employer shall, in the form and manner
required by the Department, make returns with respect to taxes
withheld or required to be withheld under this Article 7 for
each quarter beginning on or after January 1, 2008, on or
before the last day of the first month following the close of
that quarter.
(c) Payments. With respect to amounts withheld or required
to be withheld on or after January 1, 2008:
(1) Semi-weekly payments. For each calendar year, each
employer who withheld or was required to withhold more than
$12,000 during the one-year period ending on June 30 of the
immediately preceding calendar year, payment must be made:
(A) on or before each Friday of the calendar year,
for taxes withheld or required to be withheld on the
immediately preceding Saturday, Sunday, Monday, or
Tuesday;
(B) on or before each Wednesday of the calendar
year, for taxes withheld or required to be withheld on

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the immediately preceding Wednesday, Thursday, or
Friday.
(2) Semi-weekly payments. Any employer who withholds
or is required to withhold more than $12,000 in any quarter
of a calendar year is required to make payments on the
dates set forth under item (1) of this subsection (c) for
each remaining quarter of that calendar year and for the
subsequent calendar year.
(3) Monthly payments. Each employer, other than an
employer described in items (1) or (2) of this subsection,
shall pay to the Department, on or before the 15th day of
each month the taxes withheld or required to be withheld
during the immediately preceding month.
(4) Payments with returns. Each employer shall pay to
the Department, on or before the due date for each return
required to be filed under this Section, any tax withheld
or required to be withheld during the period for which the
return is due and not previously paid to the Department.
(d) Regulatory authority. The Department may, by rule:
(1) If the aggregate amounts required to be withheld
under this Article 7 do not exceed $1,000 for the calendar
year, permit employers, in lieu of the requirements of
subsections (b) and (c), to file annual returns due on or
before January 31 of the following year for taxes withheld
or required to be withheld during that calendar year and to
pay the taxes required to be shown on each such return no

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later than the due date for such return.
(2) Provide that any payment required to be made under
subsection (c)(1) or (c)(2) is deemed to be timely to the
extent paid by electronic funds transfer on or before the
due date for deposit of federal income taxes withheld from,
or federal employment taxes due with respect to, the wages
from which the Illinois taxes were withheld.
(3) Designate one or more depositories to which payment
of taxes required to be withheld under this Article 7 must
be paid by some or all employers.
(4) Increase the threshold dollar amounts at which
employers are required to make semi-weekly payments under
subsection (c)(1) or (c)(2).
(e) Annual return and payment. Every employer who deducts
and withholds or is required to deduct and withhold tax from a
person engaged in domestic service employment, as that term is
defined in Section 3510 of the Internal Revenue Code, may
comply with the requirements of this Section with respect to
such employees by filing an annual return and paying the taxes
required to be deducted and withheld on or before the 15th day
of the fourth month following the close of the employer's
taxable year. The Department may allow the employer's return to
be submitted with the employer's individual income tax return
or to be submitted with a return due from the employer under
Section 1400.2 of the Unemployment Insurance Act.
(f) Magnetic media and electronic filing. Any W-2 Form

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that, under the Internal Revenue Code and regulations
promulgated thereunder, is required to be submitted to the
Internal Revenue Service on magnetic media or electronically
must also be submitted to the Department on magnetic media or
electronically for Illinois purposes, if required by the
Department.
(g) For amounts deducted or withheld after December 31,
2009, a taxpayer who makes an election under Section 5-15(f) of
the Economic Development for a Growing Economy Act for a
taxable year shall be allowed a credit against payments due
under this Section for amounts withheld during the first
calendar year beginning after the end of that taxable year
equal to the amount of the credit awarded to the taxpayer by
the Department of Commerce and Economic Opportunity under the
Economic Development for a Growing Economy Act for the taxable
year. The credit may not reduce the taxpayer's obligation for
any payment due under this Section to less than zero. If the
amount of the credit exceeds the total payments due under this
Section with respect to amounts withheld during the calendar
year, the excess may be carried forward and applied against the
taxpayer's liability under this Section in the 5 succeeding
calendar years. The credit shall be applied to the earliest
year for which there is a tax liability. If there are credits
from more than one taxable year that are available to offset a
liability, the earlier credit shall be applied first. This
Section is exempt from the provisions of Section 250 of this

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Act.
(h) A taxpayer may elect to claim all or a part of the
credit awarded under Section 219 of this Act as a credit
against payments due under this Section. Such an election shall
be made in the form and manner prescribed by the Department by
rule. If, in any payment period, the amount of the credit that
is eligible to be applied toward the taxpayer's withholding tax
liability exceeds the amount required to be withheld by the
taxpayer for that payment period, then the excess may carried
forward to the next payment period until the entire amount has
been applied . If there are credits from more than one payment
period that are available to offset a liability, the earlier
credit shall be applied first.
(Source: P.A. 95-8, eff. 6-29-07; 95-707, eff. 1-11-08; 96-834,
eff. 12-14-09.)
Section 99. Effective date. This Act takes effect upon
becoming law.