Bill Text: IL SB3738 | 2023-2024 | 103rd General Assembly | Introduced

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Bill Title: Amends the Illinois Income Tax Act. Provides that the credit for ex-felons is renamed the credit for returning citizens. Provides that, for taxable years beginning on or after January 1, 2025, if the qualified returning citizen is employed by the taxpayer primarily at a job site in an underserved area, the amount of the credit for the returning citizen is equal to 25% (currently, 5%) of the qualified wages paid by the taxpayer. Provides that the total credit allowed with respect to each qualified returning citizen may not exceed $5,000 (currently, $1,500), except that, if the qualified returning citizen is employed by the taxpayer primarily at a job site in an underserved area, the credit may not exceed $10,000. Makes other changes. Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2024-04-05 - Rule 2-10 Committee Deadline Established As May 3, 2024 [SB3738 Detail]

Download: Illinois-2023-SB3738-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB3738 Introduced 2/9/2024, by Sen. Robert Peters SYNOPSIS AS INTRODUCED:
35 ILCS 5/216
Amends the Illinois Income Tax Act. Provides that the credit for ex-felons is renamed the credit for returning citizens. Provides that, for taxable years beginning on or after January 1, 2025, if the qualified returning citizen is employed by the taxpayer primarily at a job site in an underserved area, the amount of the credit for the returning citizen is equal to 25% (currently, 5%) of the qualified wages paid by the taxpayer. Provides that the total credit allowed with respect to each qualified returning citizen may not exceed $5,000 (currently, $1,500), except that, if the qualified returning citizen is employed by the taxpayer primarily at a job site in an underserved area, the credit may not exceed $10,000. Makes other changes. Effective immediately.
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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 216 as follows:
(35 ILCS 5/216)
Sec. 216. Credit for wages paid to returning citizens
ex-felons.
(a) For each taxable year beginning on or after January 1,
2007, each taxpayer is entitled to a credit against the tax
imposed by subsections (a) and (b) of Section 201 of this Act
in an amount equal to 5% of qualified wages paid by the
taxpayer during the taxable year to one or more Illinois
residents who are qualified returning citizens ex-offenders.
However, for taxable years beginning on or after January 1,
2025, if the taxpayer employs the qualified returning citizen
primarily at a job site in an underserved area, then the credit
under this Section is in an amount equal to 25% of the
qualified wages paid by the taxpayer during the taxable year
to that qualified returning citizen. For taxable years
beginning before January 1, 2025, the The total credit allowed
to a taxpayer with respect to each qualified returning citizen
ex-offender may not exceed $1,500 for all taxable years. For

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taxable years beginning on or after January 1, 2025, the total
credit allowed to a taxpayer with respect to each qualified
returning citizen may not exceed $5,000 for all taxable years,
except that the total credit allowed with respect to a
qualified returning citizen who is employed by the taxpayer
primarily at a job site in an underserved area may not exceed
$10,000 for all taxable years. For the purposes of this
Section, a qualified returning citizen is employed primarily
at a job site in an underserved area if at least 50% of the
taxpayer's working hours during the taxable year occur at a
job site in an underserved area. For taxable years ending
before December 31, 2023, for partners, shareholders of
Subchapter S corporations, and owners of limited liability
companies, if the liability company is treated as a
partnership for purposes of federal and State income taxation,
there shall be allowed a credit under this Section to be
determined in accordance with the determination of income and
distributive share of income under Sections 702 and 704 and
Subchapter S of the Internal Revenue Code. For taxable years
ending on or after December 31, 2023, partners and
shareholders of subchapter S corporations are entitled to a
credit under this Section as provided in Section 251.
(b) For purposes of this Section, "qualified wages":
(1) includes only wages that are subject to federal
unemployment tax under Section 3306 of the Internal
Revenue Code, without regard to any dollar limitation

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contained in that Section;
(2) does not include any amounts paid or incurred by
an employer for any period to any qualified returning
citizen ex-offender for whom the employer receives
federally funded payments for on-the-job training of that
qualified returning citizen ex-offender for that period;
and
(3) includes only wages attributable to service
rendered during the one-year period beginning with the day
the qualified returning citizen ex-offender begins work
for the employer.
If the taxpayer has received any payment from a program
established under Section 482(e)(1) of the federal Social
Security Act with respect to a qualified returning citizen
ex-offender, then, for purposes of calculating the credit
under this Section, the amount of the qualified wages paid to
that qualified returning citizen ex-offender must be reduced
by the amount of the payment.
(c) As used in For purposes of this Section: ,
"Qualified returning citizen" "qualified ex-offender"
means any person who:
(1) has been convicted of a crime in this State or of
an offense in any other jurisdiction, not including any
offense or attempted offense that would subject a person
to registration under the Sex Offender Registration Act;
(2) was sentenced to a period of incarceration in an

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Illinois adult correctional center; and
(3) was hired by the taxpayer within 3 years after
being released from an Illinois adult correctional center
if the credit is claimed for a taxable year beginning
before January 1, 2025 or was hired by the taxpayer within
10 years after being released from an Illinois adult
correctional center if the credit is claimed for a taxable
year beginning on or after January 1, 2025.
"Underserved area" means a census tract in the State that
meets one or more of the following conditions:
(1) the census tract has a poverty rate of at least 20%
according to the latest American Community Survey;
(2) 35% or more of the families with children in the
census tract are living below 130% of the poverty line
according to the latest American Community Survey;
(3) at least 20% of the households in the census tract
receive assistance under the Supplemental Nutrition
Assistance Program (SNAP); or
(4) the area has an average unemployment rate, as
determined by the Illinois Department of Employment
Security, that is more than 120% of the national
unemployment average, as determined by the U.S. Department
of Labor, for a period of at least 2 consecutive calendar
years preceding the first day of the taxable year.
(d) In no event shall a credit under this Section reduce
the taxpayer's liability to less than zero. If the amount of

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the credit exceeds the tax liability for the year, the excess
may be carried forward and applied to the tax liability of the
5 taxable years following the excess credit year. The tax
credit shall be applied to the earliest year for which there is
a tax liability. If there are credits for more than one year
that are available to offset a liability, the earlier credit
shall be applied first.
(e) This Section is exempt from the provisions of Section
250.
(Source: P.A. 103-396, eff. 1-1-24.)