HB4403 103RD GENERAL ASSEMBLY

LRB103 35453 HLH 65522 b

103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB4403

Introduced 1/16/2024, by Rep. Anna Moeller

SYNOPSIS AS INTRODUCED:

35 ILCS 5/241 new

Amends the Illinois Income Tax Act. Creates an income tax credit in an amount equal to 100% of the State and federal income, estate, and gift taxes incurred by the taxpayer during the taxable year as a result of a liquidation of assets by the taxpayer in order to allow the taxpayer to qualify for Medicaid long-term care assistance. 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 adding Section 241 as follows:

(35 ILCS 5/241 new)

Sec. 241. Credit for Medicaid long-term care.

(a) For taxable years ending on or after December 31, 2024, each individual taxpayer is entitled to a nonrefundable credit against the taxes imposed by subsections (a) and (b) of Section 201 in an amount equal to 100% of the State and federal income, estate, and gift taxes incurred by the taxpayer during the taxable year as a result of a liquidation of assets by the taxpayer in order to allow the taxpayer to qualify for Medicaid long-term care assistance. This credit shall apply to a single individual or a married couple as long as the countable assets are reduced to the levels specified in the Medicaid asset limits. This credit shall apply only for the tax year in which (i) assets are liquidated and spent down to the levels specified in the Medicaid asset limits and (ii) the taxpayer enters or remains in a nursing home or a supportive living facility and meets the qualifications for Medicaid assistance under the Medicaid asset limits. This credit does not apply if the taxpayer's spouse is entitled to the Community Spouse Maintenance Needs Allowance.

(b) 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.

(c) This Section is exempt from the provisions of Section 250.

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