Illinois Small Business Job Creation Tax Credit Act

Illinois Small Business Job Creation Tax Credit Act to Create 20,000 New Illinois Jobs

On April 13, 2010, Governor Pat Quinn signed into law a tax bill designed to boost the Illinois economy and the small businesses driving it.  The Small Business Job Creation Tax Credit Act will provide $50 million of tax credits to encourage the creation of 20,000 new jobs in the State of Illinois.  The credit is $2,500 per new job created between July 1, 2010 and June 30, 2011 and is applied against the company’s withholding tax liability for all employees.

The program is available to small businesses which are defined as employers with 50 or fewer full-time employees.  This will include employees at all locations (in state and out of state) and all related businesses (e.g. parent subsidiary relationships) will be aggregated to determine the total number of employees.  Ninety five percent of all Illinois businesses have fewer than 50 employees.

The new position must be created between July 1, 2010 and June 30, 2011 and must be filled with a full-time employee.  A full-time employee is anyone who works at least 35 hours per week and makes at least $13.75 per hour or $25,025 per year.  The position cannot be filled by someone who previously worked for the company, an independent contractor or someone who has a direct or indirect ownership interest in the company.  The newly hired employee is not required to be retained for the whole year, but to remain eligible for the credit the company needs to maintain a net increase in number of jobs during the year.  You cannot create a new position and get rid of other positions and remain eligible for the credit.  A newly created business hiring its first Illinois employee is also allowed to take the credit.

To get started you must register online at You can apply for the credit as soon as a new full-time employee is hired after July 1, 2010 and the credits will start being issued in July of 2011.  This is a first-come first-served program based on job hire date.  Once the $50 million in credits have been claimed the program is over.  Call us today for more information or to help you get started registering for the credit.

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