Illinois Small Business Job Creation Tax Credit

Previously Illinois created the Small Business Jobs Creation Tax Credit that was a pilot program created to help reverse the trend of high unemployment in Illinois and to help spur the economy to recovery, by assisting and encouraging small businesses in the creation of local, sustainable, new jobs.

Due to the overwhelming positive response to the pilot program that ran from July 1, 2010 to June 30, 2011 the Small Business Job Creation Tax Credit was re-enacted and extended by the Illinois General Assembly.

What businesses are eligible for this tax credit

  • Small businesses with 50 or fewer full-time employees on July 1, 2012. The determination of whether an employer has 50 or fewer employees on July 1, 2012, includes all employees in every location, which includes both in Illinois and out of state employment totals.
  • Any-sized business that hires a 2010 "Put Illinois to Work Program" worker-trainee
  • The small business must be located within the State of Illinois and must be engaged in interstate or intrastate commerce

How much is the tax credit worth

  • For small businesses under 50 full-time employees: The credit is for $2,500 per job (that can be carried forward) and it must be applied against their Illinois withholding tax. The employer is entitled to a one credit ($2,500) if the position is filled for one year.
  • For any-sized businesses hiring "Put Illinois to Work" worker-trainees: Employers in this category are entitled to one-half of the credit ($1,250) allowable if that employee is employed for at least 6 months after the date of hire. The employer is entitled to the other half of the credit ($1,250) if that employee is employed for at least 12 months after the date of hire
  • The credit is taken against a company's withholding tax liability
  • The program is capped at $50 million worth of credits issued

Credit Guidelines

  • The position must have been created between July 1, 2012 and June 30, 2016
  • The position must pay no less than $10.00 per hour or the equivalent salary for a new employee for a minimum of $18,200 annualized
  • For small businesses: Eligibility for the credit does not require that a particular individual employee be retained for one year, only that a new, full-time Illinois job be created and sustained for one year
  • The credit may be claimed for an hourly employee working an average of 35 hours per week or for a full-time salaried employee, but not for a partner or an independent contractor
  • The position cannot be filled for any individual who has a direct or indirect ownership interest of at least 5% in the profits, capital or value of the business

How will companies apply for the credit

  • Eligible companies must register that they have created new position online at JobsTaxCredit.illinois.gov
  • Approximately one year after filling the new position, the business will provide supporting data as requested online in order to be issued its tax credit certificate(s). The start of the issuance of tax certificates will be July 1, 2013

If you are a small business and create and hire employees, then give us a call so we can discuss your current situation and make sure you benefit from this Illinois Tax Credit.

 
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