HB2859 103RD GENERAL ASSEMBLY

LRB103 25765 HLH 52114 b

103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB2859

Introduced 2/16/2023, by Rep. Katie Stuart

SYNOPSIS AS INTRODUCED:

35 ILCS 5/217

Amends the Illinois Income Tax Act. Provides that the credit for wages paid to qualified veterans also extends to wages paid to a qualified veteran's spouse. Provides that active duty members of the United States Armed Forces are also considered "qualified veterans". Effective immediately.

A BILL FOR

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 217 as follows:

(35 ILCS 5/217)

Sec. 217. Credit for wages paid to qualified veterans and spouses of qualified veterans.

(a) For each taxable year beginning on or after January 1, 2007 and ending on or before December 30, 2010, 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%, but in no event to exceed $600, of the gross wages paid by the taxpayer to a qualified veteran in the course of that veteran's sustained employment during the taxable year. For each taxable year that begins beginning on or after January 1, 2010 and begins prior to January 1, 2024, 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 10%, but in no event to exceed $1,200, of the gross wages paid by the taxpayer to a qualified veteran in the course of that veteran's sustained employment during the taxable year. For each taxable year that begins on or after January 1, 2024 and begins prior to January 1, 2029, 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 10%, but in no event to exceed $1,200, of the gross wages paid by the taxpayer to a qualified veteran or the spouse of a qualified veteran in the course of that veteran's or spouse's sustained employment during the taxable year. 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.

(b) For purposes of this Section:

"Active duty member of the United States Armed Forces" means a member of the Armed Services or Reserve Forces of the United States or a member of the Illinois National Guard who is called to active duty pursuant to an executive order of the President of the United States, an act of the Congress of the United States, or an order of the Governor.

"Qualified veteran" means an Illinois resident who is an active duty member of the United States Armed Forces or who meets the following criteria: (i) the person was a member of the Armed Forces of the United States, a member of the Illinois National Guard, or a member of any reserve component of the Armed Forces of the United States; (ii) the person served on active duty in connection with Operation Desert Storm, Operation Enduring Freedom, or Operation Iraqi Freedom; (iii) the person has provided, to the taxpayer, documentation showing that he or she was honorably discharged; and (iv) the person was initially hired by the taxpayer on or after January 1, 2007.

"Sustained employment" means a period of employment that is not less than 185 days during the taxable year.

(c) In no event shall a credit under this Section reduce the taxpayer's liability to less than zero. If the amount of 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.

(d) A taxpayer who claims a credit under this Section for a taxable year with respect to a veteran shall not be allowed a credit under Section 217.1 of this Act with respect to the same veteran for that taxable year.

(Source: P.A. 96-101, eff. 1-1-10; 97-767, eff. 7-9-12.)

Section 99. Effective date. This Act takes effect upon becoming law.