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Health & Fitness

Illinois State Tax Credits Available!By Neha Sethia, CPA, MST Brown Kaplan + Liss LLP

Illinois State Tax Credits Available!By Neha Sethia, CPA, MST   Brown Kaplan + Liss LLP
Every state has been looking for ways to incentivize new businesses to come to their state and promote more employment by their existing businesses.  Illinois, of course, is one of them.  While there are numerous tax credits available in Illinois, this article focuses on two of them in order to bring them to light and remind everyone that they are still available.
The first tax incentive program to mention is the Economic Development for  Growing Economy (EDGE) Tax Credit program.  The program is administered by the Illinois Department of Commerce and Economic Opportunity and is targeted to provide tax credits to companies that are looking to expand or locate their business in Illinois.  The purpose of the program is to equalize the expenses to an Illinois business by reducing the costs of doing business in Illinois when compared with similar costs in other states where it could have located its operations.
Of course, there are requirements that need to be met in order for a company to qualify for this credit.  To qualify a company must provide documentation that attests to the fact of competition among a competing state, and agree to make an investment of at least $5 million in capital improvements and create a minimum of 25 new full time jobs in Illinois.  For a company with 100 or fewer employees, the company must agree to make a capital investment of $1 million and create at least 5 new full time jobs in Illinois.
The amount of the credit is calculated on a case-by-case basis, but cannot be larger than the company’s state tax liability.  However, an unused credits can be carried forward for up to 5 years.  There is an application process that takes place to help the DCEO determine that the business has chosen to stay in Illinois due to the credit versus moving any projects or the business to another competitive state.
So what about smaller business that may not have millions of dollars to invest in capital improvements?  There is the Small Business Jobs Creation Tax Credit Program that was re-enacted and extended by the Illinois General Assembly on December 16, 2011 and is scheduled to be around until June 30, 2016.  The purpose of the program is to help promote new job creation by small businesses.  This new law creates a $2,500 tax credit per job (that can be carried forward) on withholding tax for employers with 50 or fewer total employees who hire new, full-time Illinois employees.  A reduced credit is also available to any sized company that hires “Put Illinois to Work” worker trainees.  The position must have been created between July 1, 2012 and June 30, 2016 and pay no less than $10.00 per hour, or $18,200 for an salaried employees. The program is capped at $50 million worth of credits to issue and it is on a first come-first served basis…so act fast!  
There are restrictions to each of these programs so contact us with any questions at info@bkl-cpa.com and we can help you determine if you meet the guidelines to be eligible for these programs and how to apply for the credits.

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