Bill Text: IL SB4020 | 2019-2020 | 101st General Assembly | Introduced

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Bill Title: Amends the Illinois Income Tax Act. Creates an income tax credit for an employer who hires a qualified employee to work at a location in the State. Sets forth the amount of the credit. Provides that the credit shall be increased if (i) the qualified employee is hired to work at a location in a disproportionately impacted area or (ii) on the date the qualified employee is hired, the qualified employee resides in a disproportionately impacted area. Limits the total amount of income tax credits that the Department of Commerce and Economic Opportunity may issue over the duration of the program. Provides that the term "qualified employee" means a resident of the State who is hired by the taxpayer to fill a full-time net new job and was unemployed as a result of COVID-19 prior to the date he or she was hired by the taxpayer. Provides that the term "qualified employee" does not include an individual who was furloughed by the taxpayer. Effective immediately.

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Failed) 2021-01-13 - Session Sine Die [SB4020 Detail]

Download: Illinois-2019-SB4020-Introduced.html

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101ST GENERAL ASSEMBLY State of Illinois 2019 and 2020 SB4020 Introduced 1/4/2021, by Sen. Ram Villivalam, Bill Cunningham and Suzy Glowiak Hilton SYNOPSIS AS INTRODUCED:
35 ILCS 5/232 new
Amends the Illinois Income Tax Act. Creates an income tax credit for an employer who hires a qualified employee to work at a location in the State. Sets forth the amount of the credit. Provides that the credit shall be increased if (i) the qualified employee is hired to work at a location in a disproportionately impacted area or (ii) on the date the qualified employee is hired, the qualified employee resides in a disproportionately impacted area. Limits the total amount of income tax credits that the Department of Commerce and Economic Opportunity may issue over the duration of the program. Provides that the term "qualified employee" means a resident of the State who is hired by the taxpayer to fill a full-time net new job and was unemployed as a result of COVID-19 prior to the date he or she was hired by the taxpayer. Provides that the term "qualified employee" does not include an individual who was furloughed by the taxpayer. Effective immediately.
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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 adding
Section 232 as follows:
(35 ILCS 5/232 new)
Sec. 232. Employment credit; COVID-19.
(a) For taxable years that begin on or after January 1,
2020 and begin prior to January 1, 2025, for the purpose of
training and hiring qualified employees, each employer that
employs an average of 500 or fewer employees during the taxable
year is entitled to a credit against the taxes imposed by
subsections (a) and (b) of Section 201 for each qualified
employee hired by the employer during the taxable year to work
at a location in the State. If the taxpayer employs an average
of 500 or fewer employees, but more than 100 employees, during
the taxable year, then the amount of the credit shall be $2,500
per qualified employee. If the taxpayer employs an average of
100 or fewer employees during the taxable year, then the amount
of the credit shall be $5,000 per qualified employee. The
credit amounts set forth in this subsection (a) shall be
increased by $500 if (i) the qualified employee is hired to
work at a location in a disproportionately impacted area, or

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(ii) on the date the qualified employee is hired, the qualified
employee resides in a disproportionately impacted area; if the
employee meets both items (i) and (ii), the employer shall be
eligible for only a single $500 increase. The Department of
Commerce and Economic Opportunity shall issue a tax credit
certificate to taxpayers who qualify for a credit under this
Section. The taxpayer must attach the certificate to the tax
return on which the credits are to be claimed. In no event may
the Department of Commerce and Economic Opportunity issue more
than $100,000,000 in credits under this Section for the
duration of the program.
(b) For partners, shareholders of subchapter S
corporations, and members of limited liability companies, if
the limited 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.
(c) The credit or credits may not reduce the taxpayer's
liability to less than zero. If the amount of the credit or
credits exceeds the taxpayer's liability, the excess may be
carried forward and applied against the taxpayer's liability
for up to 5 succeeding taxable years. The credit or credits
shall be applied to the earliest year for which there is a tax
liability. If there are credits from more than one taxable year

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that are available to offset a liability, the earlier credit
shall be applied first.
(d) As used in this Section:
"Disproportionately impacted area" means a geographic
area designated by the Department of Commerce and Economic
Opportunity as meeting at least one of the following
criteria:
(A) the area has a poverty rate of at least 20%
according to the latest federal decennial census;
(B) 75% or more of the children in the area
participate in the federal free lunch program
according to reported statistics from the State Board
of Education;
(C) at least 20% of the households in the area
receive assistance under the Supplemental Nutrition
Assistance Program; or
(D) the area has an average unemployment rate, as
certified by the Department of Employment Security,
that is more than 120% of the national unemployment
average, as determined by the United States Department
of Labor, for a period of at least 2 consecutive
calendar years preceding the date of the designation.
"Full-time equivalent employment position" means a job
in which the employee works for the taxpayer at a rate of
at least 30 hours per week. Vacations, paid holidays, and
sick time are included in this computation.

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"Net new job" means a full-time equivalent employment
position that causes the taxpayer's average employee head
count in the State for the calendar year in which the
taxable year begins to exceed its employee head count in
the State on the effective date of this amendatory Act of
the 101st General Assembly.
"Qualified employee" means a resident of the State who
is hired by the taxpayer to fill a net new job and was
unemployed as a result of COVID-19 prior to the date he or
she was hired by the taxpayer. The term "qualified
employee" includes, but is not limited to, a resident who
was self-employed but became unemployed because of
COVID-19. The term "qualified employee" does not include an
employee who was furloughed by the taxpayer and reinstated
during the taxable year.