Bill Text: IL SB2047 | 2023-2024 | 103rd General Assembly | Chaptered

---

Bill Title: Amends the Illinois Income Tax Act. Provides that, if the taxpayer is a partnership or Subchapter S corporation, the credit is allowed to pass through to the partners and shareholders 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, or as otherwise agreed by the partners or shareholders, provided that such agreement shall be executed in writing prior to the due date of the return for the taxable year and meet such other requirements as the Department of Revenue may establish by rule.

Spectrum: Partisan Bill (Republican 2-0)

Status: (Passed) 2023-07-28 - Public Act . . . . . . . . . 103-0396 [SB2047 Detail]

Download: Illinois-2023-SB2047-Chaptered.html

---

Public Act 103-0396
SB2047 Enrolled LRB103 00133 HLH 45137 b
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 Sections 201, 214, 216, 218, 222, 224, 228, 229, 231,
and 237 and by adding Section 251 as follows:
(35 ILCS 5/201)
Sec. 201. Tax imposed.
(a) In general. A tax measured by net income is hereby
imposed on every individual, corporation, trust and estate for
each taxable year ending after July 31, 1969 on the privilege
of earning or receiving income in or as a resident of this
State. Such tax shall be in addition to all other occupation or
privilege taxes imposed by this State or by any municipal
corporation or political subdivision thereof.
(b) Rates. The tax imposed by subsection (a) of this
Section shall be determined as follows, except as adjusted by
subsection (d-1):
(1) In the case of an individual, trust or estate, for
taxable years ending prior to July 1, 1989, an amount
equal to 2 1/2% of the taxpayer's net income for the
taxable year.
(2) In the case of an individual, trust or estate, for

taxable years beginning prior to July 1, 1989 and ending
after June 30, 1989, an amount equal to the sum of (i) 2
1/2% of the taxpayer's net income for the period prior to
July 1, 1989, as calculated under Section 202.3, and (ii)
3% of the taxpayer's net income for the period after June
30, 1989, as calculated under Section 202.3.
(3) In the case of an individual, trust or estate, for
taxable years beginning after June 30, 1989, and ending
prior to January 1, 2011, an amount equal to 3% of the
taxpayer's net income for the taxable year.
(4) In the case of an individual, trust, or estate,
for taxable years beginning prior to January 1, 2011, and
ending after December 31, 2010, an amount equal to the sum
of (i) 3% of the taxpayer's net income for the period prior
to January 1, 2011, as calculated under Section 202.5, and
(ii) 5% of the taxpayer's net income for the period after
December 31, 2010, as calculated under Section 202.5.
(5) In the case of an individual, trust, or estate,
for taxable years beginning on or after January 1, 2011,
and ending prior to January 1, 2015, an amount equal to 5%
of the taxpayer's net income for the taxable year.
(5.1) In the case of an individual, trust, or estate,
for taxable years beginning prior to January 1, 2015, and
ending after December 31, 2014, an amount equal to the sum
of (i) 5% of the taxpayer's net income for the period prior
to January 1, 2015, as calculated under Section 202.5, and

(ii) 3.75% of the taxpayer's net income for the period
after December 31, 2014, as calculated under Section
202.5.
(5.2) In the case of an individual, trust, or estate,
for taxable years beginning on or after January 1, 2015,
and ending prior to July 1, 2017, an amount equal to 3.75%
of the taxpayer's net income for the taxable year.
(5.3) In the case of an individual, trust, or estate,
for taxable years beginning prior to July 1, 2017, and
ending after June 30, 2017, an amount equal to the sum of
(i) 3.75% of the taxpayer's net income for the period
prior to July 1, 2017, as calculated under Section 202.5,
and (ii) 4.95% of the taxpayer's net income for the period
after June 30, 2017, as calculated under Section 202.5.
(5.4) In the case of an individual, trust, or estate,
for taxable years beginning on or after July 1, 2017, an
amount equal to 4.95% of the taxpayer's net income for the
taxable year.
(6) In the case of a corporation, for taxable years
ending prior to July 1, 1989, an amount equal to 4% of the
taxpayer's net income for the taxable year.
(7) In the case of a corporation, for taxable years
beginning prior to July 1, 1989 and ending after June 30,
1989, an amount equal to the sum of (i) 4% of the
taxpayer's net income for the period prior to July 1,
1989, as calculated under Section 202.3, and (ii) 4.8% of

the taxpayer's net income for the period after June 30,
1989, as calculated under Section 202.3.
(8) In the case of a corporation, for taxable years
beginning after June 30, 1989, and ending prior to January
1, 2011, an amount equal to 4.8% of the taxpayer's net
income for the taxable year.
(9) In the case of a corporation, for taxable years
beginning prior to January 1, 2011, and ending after
December 31, 2010, an amount equal to the sum of (i) 4.8%
of the taxpayer's net income for the period prior to
January 1, 2011, as calculated under Section 202.5, and
(ii) 7% of the taxpayer's net income for the period after
December 31, 2010, as calculated under Section 202.5.
(10) In the case of a corporation, for taxable years
beginning on or after January 1, 2011, and ending prior to
January 1, 2015, an amount equal to 7% of the taxpayer's
net income for the taxable year.
(11) In the case of a corporation, for taxable years
beginning prior to January 1, 2015, and ending after
December 31, 2014, an amount equal to the sum of (i) 7% of
the taxpayer's net income for the period prior to January
1, 2015, as calculated under Section 202.5, and (ii) 5.25%
of the taxpayer's net income for the period after December
31, 2014, as calculated under Section 202.5.
(12) In the case of a corporation, for taxable years
beginning on or after January 1, 2015, and ending prior to

July 1, 2017, an amount equal to 5.25% of the taxpayer's
net income for the taxable year.
(13) In the case of a corporation, for taxable years
beginning prior to July 1, 2017, and ending after June 30,
2017, an amount equal to the sum of (i) 5.25% of the
taxpayer's net income for the period prior to July 1,
2017, as calculated under Section 202.5, and (ii) 7% of
the taxpayer's net income for the period after June 30,
2017, as calculated under Section 202.5.
(14) In the case of a corporation, for taxable years
beginning on or after July 1, 2017, an amount equal to 7%
of the taxpayer's net income for the taxable year.
The rates under this subsection (b) are subject to the
provisions of Section 201.5.
(b-5) Surcharge; sale or exchange of assets, properties,
and intangibles of organization gaming licensees. For each of
taxable years 2019 through 2027, a surcharge is imposed on all
taxpayers on income arising from the sale or exchange of
capital assets, depreciable business property, real property
used in the trade or business, and Section 197 intangibles (i)
of an organization licensee under the Illinois Horse Racing
Act of 1975 and (ii) of an organization gaming licensee under
the Illinois Gambling Act. The amount of the surcharge is
equal to the amount of federal income tax liability for the
taxable year attributable to those sales and exchanges. The
surcharge imposed shall not apply if:

(1) the organization gaming license, organization
license, or racetrack property is transferred as a result
of any of the following:
(A) bankruptcy, a receivership, or a debt
adjustment initiated by or against the initial
licensee or the substantial owners of the initial
licensee;
(B) cancellation, revocation, or termination of
any such license by the Illinois Gaming Board or the
Illinois Racing Board;
(C) a determination by the Illinois Gaming Board
that transfer of the license is in the best interests
of Illinois gaming;
(D) the death of an owner of the equity interest in
a licensee;
(E) the acquisition of a controlling interest in
the stock or substantially all of the assets of a
publicly traded company;
(F) a transfer by a parent company to a wholly
owned subsidiary; or
(G) the transfer or sale to or by one person to
another person where both persons were initial owners
of the license when the license was issued; or
(2) the controlling interest in the organization
gaming license, organization license, or racetrack
property is transferred in a transaction to lineal

descendants in which no gain or loss is recognized or as a
result of a transaction in accordance with Section 351 of
the Internal Revenue Code in which no gain or loss is
recognized; or
(3) live horse racing was not conducted in 2010 at a
racetrack located within 3 miles of the Mississippi River
under a license issued pursuant to the Illinois Horse
Racing Act of 1975.
The transfer of an organization gaming license,
organization license, or racetrack property by a person other
than the initial licensee to receive the organization gaming
license is not subject to a surcharge. The Department shall
adopt rules necessary to implement and administer this
subsection.
(c) Personal Property Tax Replacement Income Tax.
Beginning on July 1, 1979 and thereafter, in addition to such
income tax, there is also hereby imposed the Personal Property
Tax Replacement Income Tax measured by net income on every
corporation (including Subchapter S corporations), partnership
and trust, for each taxable year ending after June 30, 1979.
Such taxes are imposed on the privilege of earning or
receiving income in or as a resident of this State. The
Personal Property Tax Replacement Income Tax shall be in
addition to the income tax imposed by subsections (a) and (b)
of this Section and in addition to all other occupation or
privilege taxes imposed by this State or by any municipal

corporation or political subdivision thereof.
(d) Additional Personal Property Tax Replacement Income
Tax Rates. The personal property tax replacement income tax
imposed by this subsection and subsection (c) of this Section
in the case of a corporation, other than a Subchapter S
corporation and except as adjusted by subsection (d-1), shall
be an additional amount equal to 2.85% of such taxpayer's net
income for the taxable year, except that beginning on January
1, 1981, and thereafter, the rate of 2.85% specified in this
subsection shall be reduced to 2.5%, and in the case of a
partnership, trust or a Subchapter S corporation shall be an
additional amount equal to 1.5% of such taxpayer's net income
for the taxable year.
(d-1) Rate reduction for certain foreign insurers. In the
case of a foreign insurer, as defined by Section 35A-5 of the
Illinois Insurance Code, whose state or country of domicile
imposes on insurers domiciled in Illinois a retaliatory tax
(excluding any insurer whose premiums from reinsurance assumed
are 50% or more of its total insurance premiums as determined
under paragraph (2) of subsection (b) of Section 304, except
that for purposes of this determination premiums from
reinsurance do not include premiums from inter-affiliate
reinsurance arrangements), beginning with taxable years ending
on or after December 31, 1999, the sum of the rates of tax
imposed by subsections (b) and (d) shall be reduced (but not
increased) to the rate at which the total amount of tax imposed

under this Act, net of all credits allowed under this Act,
shall equal (i) the total amount of tax that would be imposed
on the foreign insurer's net income allocable to Illinois for
the taxable year by such foreign insurer's state or country of
domicile if that net income were subject to all income taxes
and taxes measured by net income imposed by such foreign
insurer's state or country of domicile, net of all credits
allowed or (ii) a rate of zero if no such tax is imposed on
such income by the foreign insurer's state of domicile. For
the purposes of this subsection (d-1), an inter-affiliate
includes a mutual insurer under common management.
(1) For the purposes of subsection (d-1), in no event
shall the sum of the rates of tax imposed by subsections
(b) and (d) be reduced below the rate at which the sum of:
(A) the total amount of tax imposed on such
foreign insurer under this Act for a taxable year, net
of all credits allowed under this Act, plus
(B) the privilege tax imposed by Section 409 of
the Illinois Insurance Code, the fire insurance
company tax imposed by Section 12 of the Fire
Investigation Act, and the fire department taxes
imposed under Section 11-10-1 of the Illinois
Municipal Code,
equals 1.25% for taxable years ending prior to December
31, 2003, or 1.75% for taxable years ending on or after
December 31, 2003, of the net taxable premiums written for

the taxable year, as described by subsection (1) of
Section 409 of the Illinois Insurance Code. This paragraph
will in no event increase the rates imposed under
subsections (b) and (d).
(2) Any reduction in the rates of tax imposed by this
subsection shall be applied first against the rates
imposed by subsection (b) and only after the tax imposed
by subsection (a) net of all credits allowed under this
Section other than the credit allowed under subsection (i)
has been reduced to zero, against the rates imposed by
subsection (d).
This subsection (d-1) is exempt from the provisions of
Section 250.
(e) Investment credit. A taxpayer shall be allowed a
credit against the Personal Property Tax Replacement Income
Tax for investment in qualified property.
(1) A taxpayer shall be allowed a credit equal to .5%
of the basis of qualified property placed in service
during the taxable year, provided such property is placed
in service on or after July 1, 1984. There shall be allowed
an additional credit equal to .5% of the basis of
qualified property placed in service during the taxable
year, provided such property is placed in service on or
after July 1, 1986, and the taxpayer's base employment
within Illinois has increased by 1% or more over the
preceding year as determined by the taxpayer's employment

records filed with the Illinois Department of Employment
Security. Taxpayers who are new to Illinois shall be
deemed to have met the 1% growth in base employment for the
first year in which they file employment records with the
Illinois Department of Employment Security. The provisions
added to this Section by Public Act 85-1200 (and restored
by Public Act 87-895) shall be construed as declaratory of
existing law and not as a new enactment. If, in any year,
the increase in base employment within Illinois over the
preceding year is less than 1%, the additional credit
shall be limited to that percentage times a fraction, the
numerator of which is .5% and the denominator of which is
1%, but shall not exceed .5%. The investment credit shall
not be allowed to the extent that it would reduce a
taxpayer's liability in any tax year below zero, nor may
any credit for qualified property be allowed for any year
other than the year in which the property was placed in
service in Illinois. For tax years ending on or after
December 31, 1987, and on or before December 31, 1988, the
credit shall be allowed for the tax year in which the
property is placed in service, or, if the amount of the
credit exceeds the tax liability for that year, whether it
exceeds the original liability or the liability as later
amended, such excess may be carried forward and applied to
the tax liability of the 5 taxable years following the
excess credit years if the taxpayer (i) makes investments

which cause the creation of a minimum of 2,000 full-time
equivalent jobs in Illinois, (ii) is located in an
enterprise zone established pursuant to the Illinois
Enterprise Zone Act and (iii) is certified by the
Department of Commerce and Community Affairs (now
Department of Commerce and Economic Opportunity) as
complying with the requirements specified in clause (i)
and (ii) by July 1, 1986. The Department of Commerce and
Community Affairs (now Department of Commerce and Economic
Opportunity) shall notify the Department of Revenue of all
such certifications immediately. For tax years ending
after December 31, 1988, the credit shall be allowed for
the tax year in which the property is placed in service,
or, if the amount of the credit exceeds the tax liability
for that year, whether it exceeds the original liability
or the liability as later amended, such excess may be
carried forward and applied to the tax liability of the 5
taxable years following the excess credit years. The
credit shall be applied to the earliest year for which
there is a liability. If there is credit from more than one
tax year that is available to offset a liability, earlier
credit shall be applied first.
(2) The term "qualified property" means property
which:
(A) is tangible, whether new or used, including
buildings and structural components of buildings and

signs that are real property, but not including land
or improvements to real property that are not a
structural component of a building such as
landscaping, sewer lines, local access roads, fencing,
parking lots, and other appurtenances;
(B) is depreciable pursuant to Section 167 of the
Internal Revenue Code, except that "3-year property"
as defined in Section 168(c)(2)(A) of that Code is not
eligible for the credit provided by this subsection
(e);
(C) is acquired by purchase as defined in Section
179(d) of the Internal Revenue Code;
(D) is used in Illinois by a taxpayer who is
primarily engaged in manufacturing, or in mining coal
or fluorite, or in retailing, or was placed in service
on or after July 1, 2006 in a River Edge Redevelopment
Zone established pursuant to the River Edge
Redevelopment Zone Act; and
(E) has not previously been used in Illinois in
such a manner and by such a person as would qualify for
the credit provided by this subsection (e) or
subsection (f).
(3) For purposes of this subsection (e),
"manufacturing" means the material staging and production
of tangible personal property by procedures commonly
regarded as manufacturing, processing, fabrication, or

assembling which changes some existing material into new
shapes, new qualities, or new combinations. For purposes
of this subsection (e) the term "mining" shall have the
same meaning as the term "mining" in Section 613(c) of the
Internal Revenue Code. For purposes of this subsection
(e), the term "retailing" means the sale of tangible
personal property for use or consumption and not for
resale, or services rendered in conjunction with the sale
of tangible personal property for use or consumption and
not for resale. For purposes of this subsection (e),
"tangible personal property" has the same meaning as when
that term is used in the Retailers' Occupation Tax Act,
and, for taxable years ending after December 31, 2008,
does not include the generation, transmission, or
distribution of electricity.
(4) The basis of qualified property shall be the basis
used to compute the depreciation deduction for federal
income tax purposes.
(5) If the basis of the property for federal income
tax depreciation purposes is increased after it has been
placed in service in Illinois by the taxpayer, the amount
of such increase shall be deemed property placed in
service on the date of such increase in basis.
(6) The term "placed in service" shall have the same
meaning as under Section 46 of the Internal Revenue Code.
(7) If during any taxable year, any property ceases to

be qualified property in the hands of the taxpayer within
48 months after being placed in service, or the situs of
any qualified property is moved outside Illinois within 48
months after being placed in service, the Personal
Property Tax Replacement Income Tax for such taxable year
shall be increased. Such increase shall be determined by
(i) recomputing the investment credit which would have
been allowed for the year in which credit for such
property was originally allowed by eliminating such
property from such computation and, (ii) subtracting such
recomputed credit from the amount of credit previously
allowed. For the purposes of this paragraph (7), a
reduction of the basis of qualified property resulting
from a redetermination of the purchase price shall be
deemed a disposition of qualified property to the extent
of such reduction.
(8) Unless the investment credit is extended by law,
the basis of qualified property shall not include costs
incurred after December 31, 2018, except for costs
incurred pursuant to a binding contract entered into on or
before December 31, 2018.
(9) Each taxable year ending before December 31, 2000,
a partnership may elect to pass through to its partners
the credits to which the partnership is entitled under
this subsection (e) for the taxable year. A partner may
use the credit allocated to him or her under this

paragraph only against the tax imposed in subsections (c)
and (d) of this Section. If the partnership makes that
election, those credits shall be allocated among the
partners in the partnership in accordance with the rules
set forth in Section 704(b) of the Internal Revenue Code,
and the rules promulgated under that Section, and the
allocated amount of the credits shall be allowed to the
partners for that taxable year. The partnership shall make
this election on its Personal Property Tax Replacement
Income Tax return for that taxable year. The election to
pass through the credits shall be irrevocable.
For taxable years ending on or after December 31,
2000, a partner that qualifies its partnership for a
subtraction under subparagraph (I) of paragraph (2) of
subsection (d) of Section 203 or a shareholder that
qualifies a Subchapter S corporation for a subtraction
under subparagraph (S) of paragraph (2) of subsection (b)
of Section 203 shall be allowed a credit under this
subsection (e) equal to its share of the credit earned
under this subsection (e) during the taxable year by the
partnership or Subchapter S corporation, 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. This
paragraph is exempt from the provisions of Section 250.
(f) Investment credit; Enterprise Zone; River Edge

Redevelopment Zone.
(1) A taxpayer shall be allowed a credit against the
tax imposed by subsections (a) and (b) of this Section for
investment in qualified property which is placed in
service in an Enterprise Zone created pursuant to the
Illinois Enterprise Zone Act or, for property placed in
service on or after July 1, 2006, a River Edge
Redevelopment Zone established pursuant to the River Edge
Redevelopment Zone Act. 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, for taxable years ending before December 31,
2023, there shall be allowed a credit under this
subsection (f) 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. For taxable years ending on or
after December 31, 2023, for partners and shareholders of
Subchapter S corporations, the provisions of Section 251
shall apply with respect to the credit under this
subsection. The credit shall be .5% of the basis for such
property. The credit shall be available only in the
taxable year in which the property is placed in service in
the Enterprise Zone or River Edge Redevelopment Zone and
shall not be allowed to the extent that it would reduce a

taxpayer's liability for the tax imposed by subsections
(a) and (b) of this Section to below zero. For tax years
ending on or after December 31, 1985, the credit shall be
allowed for the tax year in which the property is placed in
service, or, if the amount of the credit exceeds the tax
liability for that year, whether it exceeds the original
liability or the liability as later amended, such excess
may be carried forward and applied to the tax liability of
the 5 taxable years following the excess credit year. The
credit shall be applied to the earliest year for which
there is a liability. If there is credit from more than one
tax year that is available to offset a liability, the
credit accruing first in time shall be applied first.
(2) The term qualified property means property which:
(A) is tangible, whether new or used, including
buildings and structural components of buildings;
(B) is depreciable pursuant to Section 167 of the
Internal Revenue Code, except that "3-year property"
as defined in Section 168(c)(2)(A) of that Code is not
eligible for the credit provided by this subsection
(f);
(C) is acquired by purchase as defined in Section
179(d) of the Internal Revenue Code;
(D) is used in the Enterprise Zone or River Edge
Redevelopment Zone by the taxpayer; and
(E) has not been previously used in Illinois in

such a manner and by such a person as would qualify for
the credit provided by this subsection (f) or
subsection (e).
(3) The basis of qualified property shall be the basis
used to compute the depreciation deduction for federal
income tax purposes.
(4) If the basis of the property for federal income
tax depreciation purposes is increased after it has been
placed in service in the Enterprise Zone or River Edge
Redevelopment Zone by the taxpayer, the amount of such
increase shall be deemed property placed in service on the
date of such increase in basis.
(5) The term "placed in service" shall have the same
meaning as under Section 46 of the Internal Revenue Code.
(6) If during any taxable year, any property ceases to
be qualified property in the hands of the taxpayer within
48 months after being placed in service, or the situs of
any qualified property is moved outside the Enterprise
Zone or River Edge Redevelopment Zone within 48 months
after being placed in service, the tax imposed under
subsections (a) and (b) of this Section for such taxable
year shall be increased. Such increase shall be determined
by (i) recomputing the investment credit which would have
been allowed for the year in which credit for such
property was originally allowed by eliminating such
property from such computation, and (ii) subtracting such

recomputed credit from the amount of credit previously
allowed. For the purposes of this paragraph (6), a
reduction of the basis of qualified property resulting
from a redetermination of the purchase price shall be
deemed a disposition of qualified property to the extent
of such reduction.
(7) There shall be allowed an additional credit equal
to 0.5% of the basis of qualified property placed in
service during the taxable year in a River Edge
Redevelopment Zone, provided such property is placed in
service on or after July 1, 2006, and the taxpayer's base
employment within Illinois has increased by 1% or more
over the preceding year as determined by the taxpayer's
employment records filed with the Illinois Department of
Employment Security. Taxpayers who are new to Illinois
shall be deemed to have met the 1% growth in base
employment for the first year in which they file
employment records with the Illinois Department of
Employment Security. If, in any year, the increase in base
employment within Illinois over the preceding year is less
than 1%, the additional credit shall be limited to that
percentage times a fraction, the numerator of which is
0.5% and the denominator of which is 1%, but shall not
exceed 0.5%.
(8) For taxable years beginning on or after January 1,
2021, there shall be allowed an Enterprise Zone

construction jobs credit against the taxes imposed under
subsections (a) and (b) of this Section as provided in
Section 13 of the Illinois Enterprise Zone Act.
The credit or credits may not reduce the taxpayer's
liability to less than zero. If the amount of the credit or
credits exceeds the taxpayer's liability, the excess may
be carried forward and applied against the taxpayer's
liability in succeeding calendar years in the same manner
provided under paragraph (4) of Section 211 of this Act.
The credit or credits shall be applied to the earliest
year for which there is a tax liability. If there are
credits from more than one taxable year that are available
to offset a liability, the earlier credit shall be applied
first.
For partners, shareholders of Subchapter S
corporations, and owners of limited liability companies,
if the liability company is treated as a partnership for
the purposes of federal and State income taxation, for
taxable years ending before December 31, 2023, 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. For taxable
years ending on or after December 31, 2023, for partners
and shareholders of Subchapter S corporations, the
provisions of Section 251 shall apply with respect to the

credit under this subsection.
The total aggregate amount of credits awarded under
the Blue Collar Jobs Act (Article 20 of Public Act 101-9)
shall not exceed $20,000,000 in any State fiscal year.
This paragraph (8) is exempt from the provisions of
Section 250.
(g) (Blank).
(h) Investment credit; High Impact Business.
(1) Subject to subsections (b) and (b-5) of Section
5.5 of the Illinois Enterprise Zone Act, a taxpayer shall
be allowed a credit against the tax imposed by subsections
(a) and (b) of this Section for investment in qualified
property which is placed in service by a Department of
Commerce and Economic Opportunity designated High Impact
Business. The credit shall be .5% of the basis for such
property. The credit shall not be available (i) until the
minimum investments in qualified property set forth in
subdivision (a)(3)(A) of Section 5.5 of the Illinois
Enterprise Zone Act have been satisfied or (ii) until the
time authorized in subsection (b-5) of the Illinois
Enterprise Zone Act for entities designated as High Impact
Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
(a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
Act, and shall not be allowed to the extent that it would
reduce a taxpayer's liability for the tax imposed by
subsections (a) and (b) of this Section to below zero. The

credit applicable to such investments shall be taken in
the taxable year in which such investments have been
completed. The credit for additional investments beyond
the minimum investment by a designated high impact
business authorized under subdivision (a)(3)(A) of Section
5.5 of the Illinois Enterprise Zone Act shall be available
only in the taxable year in which the property is placed in
service and shall not be allowed to the extent that it
would reduce a taxpayer's liability for the tax imposed by
subsections (a) and (b) of this Section to below zero. For
tax years ending on or after December 31, 1987, the credit
shall be allowed for the tax year in which the property is
placed in service, or, if the amount of the credit exceeds
the tax liability for that year, whether it exceeds the
original liability or the liability as later amended, such
excess may be carried forward and applied to the tax
liability of the 5 taxable years following the excess
credit year. The credit shall be applied to the earliest
year for which there is a liability. If there is credit
from more than one tax year that is available to offset a
liability, the credit accruing first in time shall be
applied first.
Changes made in this subdivision (h)(1) by Public Act
88-670 restore changes made by Public Act 85-1182 and
reflect existing law.
(2) The term qualified property means property which:

(A) is tangible, whether new or used, including
buildings and structural components of buildings;
(B) is depreciable pursuant to Section 167 of the
Internal Revenue Code, except that "3-year property"
as defined in Section 168(c)(2)(A) of that Code is not
eligible for the credit provided by this subsection
(h);
(C) is acquired by purchase as defined in Section
179(d) of the Internal Revenue Code; and
(D) is not eligible for the Enterprise Zone
Investment Credit provided by subsection (f) of this
Section.
(3) The basis of qualified property shall be the basis
used to compute the depreciation deduction for federal
income tax purposes.
(4) If the basis of the property for federal income
tax depreciation purposes is increased after it has been
placed in service in a federally designated Foreign Trade
Zone or Sub-Zone located in Illinois by the taxpayer, the
amount of such increase shall be deemed property placed in
service on the date of such increase in basis.
(5) The term "placed in service" shall have the same
meaning as under Section 46 of the Internal Revenue Code.
(6) If during any taxable year ending on or before
December 31, 1996, any property ceases to be qualified
property in the hands of the taxpayer within 48 months

after being placed in service, or the situs of any
qualified property is moved outside Illinois within 48
months after being placed in service, the tax imposed
under subsections (a) and (b) of this Section for such
taxable year shall be increased. Such increase shall be
determined by (i) recomputing the investment credit which
would have been allowed for the year in which credit for
such property was originally allowed by eliminating such
property from such computation, and (ii) subtracting such
recomputed credit from the amount of credit previously
allowed. For the purposes of this paragraph (6), a
reduction of the basis of qualified property resulting
from a redetermination of the purchase price shall be
deemed a disposition of qualified property to the extent
of such reduction.
(7) Beginning with tax years ending after December 31,
1996, if a taxpayer qualifies for the credit under this
subsection (h) and thereby is granted a tax abatement and
the taxpayer relocates its entire facility in violation of
the explicit terms and length of the contract under
Section 18-183 of the Property Tax Code, the tax imposed
under subsections (a) and (b) of this Section shall be
increased for the taxable year in which the taxpayer
relocated its facility by an amount equal to the amount of
credit received by the taxpayer under this subsection (h).
(h-5) High Impact Business construction jobs credit. For

taxable years beginning on or after January 1, 2021, there
shall also be allowed a High Impact Business construction jobs
credit against the tax imposed under subsections (a) and (b)
of this Section as provided in subsections (i) and (j) of
Section 5.5 of the Illinois Enterprise Zone Act.
The credit or credits may not reduce the taxpayer's
liability to less than zero. If the amount of the credit or
credits exceeds the taxpayer's liability, the excess may be
carried forward and applied against the taxpayer's liability
in succeeding calendar years in the manner provided under
paragraph (4) of Section 211 of this Act. The credit or credits
shall be applied to the earliest year for which there is a tax
liability. If there are credits from more than one taxable
year that are available to offset a liability, the earlier
credit shall be applied first.
For partners, shareholders of Subchapter S corporations,
and owners of limited liability companies, for taxable years
ending before December 31, 2023, if the liability company is
treated as a partnership for the 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. For
taxable years ending on or after December 31, 2023, for
partners and shareholders of Subchapter S corporations, the
provisions of Section 251 shall apply with respect to the

credit under this subsection.
The total aggregate amount of credits awarded under the
Blue Collar Jobs Act (Article 20 of Public Act 101-9) shall not
exceed $20,000,000 in any State fiscal year.
This subsection (h-5) is exempt from the provisions of
Section 250.
(i) Credit for Personal Property Tax Replacement Income
Tax. For tax years ending prior to December 31, 2003, a credit
shall be allowed against the tax imposed by subsections (a)
and (b) of this Section for the tax imposed by subsections (c)
and (d) of this Section. This credit shall be computed by
multiplying the tax imposed by subsections (c) and (d) of this
Section by a fraction, the numerator of which is base income
allocable to Illinois and the denominator of which is Illinois
base income, and further multiplying the product by the tax
rate imposed by subsections (a) and (b) of this Section.
Any credit earned on or after December 31, 1986 under this
subsection which is unused in the year the credit is computed
because it exceeds the tax liability imposed by subsections
(a) and (b) for that year (whether it exceeds the original
liability or the liability as later amended) may be carried
forward and applied to the tax liability imposed by
subsections (a) and (b) of the 5 taxable years following the
excess credit year, provided that no credit may be carried
forward to any year ending on or after December 31, 2003. This
credit shall be applied first to the earliest year for which

there is a liability. If there is a credit under this
subsection from more than one tax year that is available to
offset a liability the earliest credit arising under this
subsection shall be applied first.
If, during any taxable year ending on or after December
31, 1986, the tax imposed by subsections (c) and (d) of this
Section for which a taxpayer has claimed a credit under this
subsection (i) is reduced, the amount of credit for such tax
shall also be reduced. Such reduction shall be determined by
recomputing the credit to take into account the reduced tax
imposed by subsections (c) and (d). If any portion of the
reduced amount of credit has been carried to a different
taxable year, an amended return shall be filed for such
taxable year to reduce the amount of credit claimed.
(j) Training expense credit. Beginning with tax years
ending on or after December 31, 1986 and prior to December 31,
2003, a taxpayer shall be allowed a credit against the tax
imposed by subsections (a) and (b) under this Section for all
amounts paid or accrued, on behalf of all persons employed by
the taxpayer in Illinois or Illinois residents employed
outside of Illinois by a taxpayer, for educational or
vocational training in semi-technical or technical fields or
semi-skilled or skilled fields, which were deducted from gross
income in the computation of taxable income. The credit
against the tax imposed by subsections (a) and (b) shall be
1.6% of such training expenses. 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,
for taxable years ending before December 31, 2023, there shall
be allowed a credit under this subsection (j) 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. For taxable years
ending on or after December 31, 2023, for partners and
shareholders of Subchapter S corporations, the provisions of
Section 251 shall apply with respect to the credit under this
subsection.
Any credit allowed under this subsection which is unused
in the year the credit is earned may be carried forward to each
of the 5 taxable years following the year for which the credit
is first computed until it is used. This credit shall be
applied first to the earliest year for which there is a
liability. If there is a credit under this subsection from
more than one tax year that is available to offset a liability,
the earliest credit arising under this subsection shall be
applied first. No carryforward credit may be claimed in any
tax year ending on or after December 31, 2003.
(k) Research and development credit. For tax years ending
after July 1, 1990 and prior to December 31, 2003, and
beginning again for tax years ending on or after December 31,
2004, and ending prior to January 1, 2027, a taxpayer shall be

allowed a credit against the tax imposed by subsections (a)
and (b) of this Section for increasing research activities in
this State. The credit allowed against the tax imposed by
subsections (a) and (b) shall be equal to 6 1/2% of the
qualifying expenditures for increasing research activities in
this State. 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, for taxable years ending
before December 31, 2023, there shall be allowed a credit
under this subsection 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. For taxable years ending on or after December 31, 2023,
for partners and shareholders of Subchapter S corporations,
the provisions of Section 251 shall apply with respect to the
credit under this subsection.
For purposes of this subsection, "qualifying expenditures"
means the qualifying expenditures as defined for the federal
credit for increasing research activities which would be
allowable under Section 41 of the Internal Revenue Code and
which are conducted in this State, "qualifying expenditures
for increasing research activities in this State" means the
excess of qualifying expenditures for the taxable year in
which incurred over qualifying expenditures for the base
period, "qualifying expenditures for the base period" means

the average of the qualifying expenditures for each year in
the base period, and "base period" means the 3 taxable years
immediately preceding the taxable year for which the
determination is being made.
Any credit in excess of the tax liability for the taxable
year may be carried forward. A taxpayer may elect to have the
unused credit shown on its final completed return carried over
as a credit against the tax liability for the following 5
taxable years or until it has been fully used, whichever
occurs first; provided that no credit earned in a tax year
ending prior to December 31, 2003 may be carried forward to any
year ending on or after December 31, 2003.
If an unused credit is carried forward to a given year from
2 or more earlier years, that credit arising in the earliest
year will be applied first against the tax liability for the
given year. If a tax liability for the given year still
remains, the credit from the next earliest year will then be
applied, and so on, until all credits have been used or no tax
liability for the given year remains. Any remaining unused
credit or credits then will be carried forward to the next
following year in which a tax liability is incurred, except
that no credit can be carried forward to a year which is more
than 5 years after the year in which the expense for which the
credit is given was incurred.
No inference shall be drawn from Public Act 91-644 in
construing this Section for taxable years beginning before

January 1, 1999.
It is the intent of the General Assembly that the research
and development credit under this subsection (k) shall apply
continuously for all tax years ending on or after December 31,
2004 and ending prior to January 1, 2027, including, but not
limited to, the period beginning on January 1, 2016 and ending
on July 6, 2017 (the effective date of Public Act 100-22). All
actions taken in reliance on the continuation of the credit
under this subsection (k) by any taxpayer are hereby
validated.
(l) Environmental Remediation Tax Credit.
(i) For tax years ending after December 31, 1997 and
on or before December 31, 2001, a taxpayer shall be
allowed a credit against the tax imposed by subsections
(a) and (b) of this Section for certain amounts paid for
unreimbursed eligible remediation costs, as specified in
this subsection. For purposes of this Section,
"unreimbursed eligible remediation costs" means costs
approved by the Illinois Environmental Protection Agency
("Agency") under Section 58.14 of the Environmental
Protection Act that were paid in performing environmental
remediation at a site for which a No Further Remediation
Letter was issued by the Agency and recorded under Section
58.10 of the Environmental Protection Act. The credit must
be claimed for the taxable year in which Agency approval
of the eligible remediation costs is granted. The credit

is not available to any taxpayer if the taxpayer or any
related party caused or contributed to, in any material
respect, a release of regulated substances on, in, or
under the site that was identified and addressed by the
remedial action pursuant to the Site Remediation Program
of the Environmental Protection Act. After the Pollution
Control Board rules are adopted pursuant to the Illinois
Administrative Procedure Act for the administration and
enforcement of Section 58.9 of the Environmental
Protection Act, determinations as to credit availability
for purposes of this Section shall be made consistent with
those rules. For purposes of this Section, "taxpayer"
includes a person whose tax attributes the taxpayer has
succeeded to under Section 381 of the Internal Revenue
Code and "related party" includes the persons disallowed a
deduction for losses by paragraphs (b), (c), and (f)(1) of
Section 267 of the Internal Revenue Code by virtue of
being a related taxpayer, as well as any of its partners.
The credit allowed against the tax imposed by subsections
(a) and (b) shall be equal to 25% of the unreimbursed
eligible remediation costs in excess of $100,000 per site,
except that the $100,000 threshold shall not apply to any
site contained in an enterprise zone as determined by the
Department of Commerce and Community Affairs (now
Department of Commerce and Economic Opportunity). The
total credit allowed shall not exceed $40,000 per year

with a maximum total of $150,000 per site. For partners
and shareholders of subchapter S corporations, there shall
be allowed a credit under this subsection 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.
(ii) A credit allowed under this subsection that is
unused in the year the credit is earned may be carried
forward to each of the 5 taxable years following the year
for which the credit is first earned until it is used. The
term "unused credit" does not include any amounts of
unreimbursed eligible remediation costs in excess of the
maximum credit per site authorized under paragraph (i).
This credit shall be applied first to the earliest year
for which there is a liability. If there is a credit under
this subsection from more than one tax year that is
available to offset a liability, the earliest credit
arising under this subsection shall be applied first. A
credit allowed under this subsection may be sold to a
buyer as part of a sale of all or part of the remediation
site for which the credit was granted. The purchaser of a
remediation site and the tax credit shall succeed to the
unused credit and remaining carry-forward period of the
seller. To perfect the transfer, the assignor shall record
the transfer in the chain of title for the site and provide
written notice to the Director of the Illinois Department

of Revenue of the assignor's intent to sell the
remediation site and the amount of the tax credit to be
transferred as a portion of the sale. In no event may a
credit be transferred to any taxpayer if the taxpayer or a
related party would not be eligible under the provisions
of subsection (i).
(iii) For purposes of this Section, the term "site"
shall have the same meaning as under Section 58.2 of the
Environmental Protection Act.
(m) Education expense credit. Beginning with tax years
ending after December 31, 1999, a taxpayer who is the
custodian of one or more qualifying pupils shall be allowed a
credit against the tax imposed by subsections (a) and (b) of
this Section for qualified education expenses incurred on
behalf of the qualifying pupils. The credit shall be equal to
25% of qualified education expenses, but in no event may the
total credit under this subsection claimed by a family that is
the custodian of qualifying pupils exceed (i) $500 for tax
years ending prior to December 31, 2017, and (ii) $750 for tax
years ending on or after December 31, 2017. In no event shall a
credit under this subsection reduce the taxpayer's liability
under this Act to less than zero. Notwithstanding any other
provision of law, for taxable years beginning on or after
January 1, 2017, no taxpayer may claim a credit under this
subsection (m) if the taxpayer's adjusted gross income for the
taxable year exceeds (i) $500,000, in the case of spouses

filing a joint federal tax return or (ii) $250,000, in the case
of all other taxpayers. This subsection is exempt from the
provisions of Section 250 of this Act.
For purposes of this subsection:
"Qualifying pupils" means individuals who (i) are
residents of the State of Illinois, (ii) are under the age of
21 at the close of the school year for which a credit is
sought, and (iii) during the school year for which a credit is
sought were full-time pupils enrolled in a kindergarten
through twelfth grade education program at any school, as
defined in this subsection.
"Qualified education expense" means the amount incurred on
behalf of a qualifying pupil in excess of $250 for tuition,
book fees, and lab fees at the school in which the pupil is
enrolled during the regular school year.
"School" means any public or nonpublic elementary or
secondary school in Illinois that is in compliance with Title
VI of the Civil Rights Act of 1964 and attendance at which
satisfies the requirements of Section 26-1 of the School Code,
except that nothing shall be construed to require a child to
attend any particular public or nonpublic school to qualify
for the credit under this Section.
"Custodian" means, with respect to qualifying pupils, an
Illinois resident who is a parent, the parents, a legal
guardian, or the legal guardians of the qualifying pupils.
(n) River Edge Redevelopment Zone site remediation tax

credit.
(i) For tax years ending on or after December 31,
2006, a taxpayer shall be allowed a credit against the tax
imposed by subsections (a) and (b) of this Section for
certain amounts paid for unreimbursed eligible remediation
costs, as specified in this subsection. For purposes of
this Section, "unreimbursed eligible remediation costs"
means costs approved by the Illinois Environmental
Protection Agency ("Agency") under Section 58.14a of the
Environmental Protection Act that were paid in performing
environmental remediation at a site within a River Edge
Redevelopment Zone for which a No Further Remediation
Letter was issued by the Agency and recorded under Section
58.10 of the Environmental Protection Act. The credit must
be claimed for the taxable year in which Agency approval
of the eligible remediation costs is granted. The credit
is not available to any taxpayer if the taxpayer or any
related party caused or contributed to, in any material
respect, a release of regulated substances on, in, or
under the site that was identified and addressed by the
remedial action pursuant to the Site Remediation Program
of the Environmental Protection Act. Determinations as to
credit availability for purposes of this Section shall be
made consistent with rules adopted by the Pollution
Control Board pursuant to the Illinois Administrative
Procedure Act for the administration and enforcement of

Section 58.9 of the Environmental Protection Act. For
purposes of this Section, "taxpayer" includes a person
whose tax attributes the taxpayer has succeeded to under
Section 381 of the Internal Revenue Code and "related
party" includes the persons disallowed a deduction for
losses by paragraphs (b), (c), and (f)(1) of Section 267
of the Internal Revenue Code by virtue of being a related
taxpayer, as well as any of its partners. The credit
allowed against the tax imposed by subsections (a) and (b)
shall be equal to 25% of the unreimbursed eligible
remediation costs in excess of $100,000 per site.
(ii) A credit allowed under this subsection that is
unused in the year the credit is earned may be carried
forward to each of the 5 taxable years following the year
for which the credit is first earned until it is used. This
credit shall be applied first to the earliest year for
which there is a liability. If there is a credit under this
subsection from more than one tax year that is available
to offset a liability, the earliest credit arising under
this subsection shall be applied first. A credit allowed
under this subsection may be sold to a buyer as part of a
sale of all or part of the remediation site for which the
credit was granted. The purchaser of a remediation site
and the tax credit shall succeed to the unused credit and
remaining carry-forward period of the seller. To perfect
the transfer, the assignor shall record the transfer in

the chain of title for the site and provide written notice
to the Director of the Illinois Department of Revenue of
the assignor's intent to sell the remediation site and the
amount of the tax credit to be transferred as a portion of
the sale. In no event may a credit be transferred to any
taxpayer if the taxpayer or a related party would not be
eligible under the provisions of subsection (i).
(iii) For purposes of this Section, the term "site"
shall have the same meaning as under Section 58.2 of the
Environmental Protection Act.
(o) For each of taxable years during the Compassionate Use
of Medical Cannabis Program, a surcharge is imposed on all
taxpayers on income arising from the sale or exchange of
capital assets, depreciable business property, real property
used in the trade or business, and Section 197 intangibles of
an organization registrant under the Compassionate Use of
Medical Cannabis Program Act. The amount of the surcharge is
equal to the amount of federal income tax liability for the
taxable year attributable to those sales and exchanges. The
surcharge imposed does not apply if:
(1) the medical cannabis cultivation center
registration, medical cannabis dispensary registration, or
the property of a registration is transferred as a result
of any of the following:
(A) bankruptcy, a receivership, or a debt
adjustment initiated by or against the initial

registration or the substantial owners of the initial
registration;
(B) cancellation, revocation, or termination of
any registration by the Illinois Department of Public
Health;
(C) a determination by the Illinois Department of
Public Health that transfer of the registration is in
the best interests of Illinois qualifying patients as
defined by the Compassionate Use of Medical Cannabis
Program Act;
(D) the death of an owner of the equity interest in
a registrant;
(E) the acquisition of a controlling interest in
the stock or substantially all of the assets of a
publicly traded company;
(F) a transfer by a parent company to a wholly
owned subsidiary; or
(G) the transfer or sale to or by one person to
another person where both persons were initial owners
of the registration when the registration was issued;
or
(2) the cannabis cultivation center registration,
medical cannabis dispensary registration, or the
controlling interest in a registrant's property is
transferred in a transaction to lineal descendants in
which no gain or loss is recognized or as a result of a

transaction in accordance with Section 351 of the Internal
Revenue Code in which no gain or loss is recognized.
(p) Pass-through entity tax.
(1) For taxable years ending on or after December 31,
2021 and beginning prior to January 1, 2026, a partnership
(other than a publicly traded partnership under Section
7704 of the Internal Revenue Code) or Subchapter S
corporation may elect to apply the provisions of this
subsection. A separate election shall be made for each
taxable year. Such election shall be made at such time,
and in such form and manner as prescribed by the
Department, and, once made, is irrevocable.
(2) Entity-level tax. A partnership or Subchapter S
corporation electing to apply the provisions of this
subsection shall be subject to a tax for the privilege of
earning or receiving income in this State in an amount
equal to 4.95% of the taxpayer's net income for the
taxable year.
(3) Net income defined.
(A) In general. For purposes of paragraph (2), the
term net income has the same meaning as defined in
Section 202 of this Act, except that the following
provisions shall not apply:
(i) the standard exemption allowed under
Section 204;
(ii) the deduction for net losses allowed

under Section 207;
(iii) in the case of an S corporation, the
modification under Section 203(b)(2)(S); and
(iv) in the case of a partnership, the
modifications under Section 203(d)(2)(H) and
Section 203(d)(2)(I).
(B) Special rule for tiered partnerships. If a
taxpayer making the election under paragraph (1) is a
partner of another taxpayer making the election under
paragraph (1), net income shall be computed as
provided in subparagraph (A), except that the taxpayer
shall subtract its distributive share of the net
income of the electing partnership (including its
distributive share of the net income of the electing
partnership derived as a distributive share from
electing partnerships in which it is a partner).
(4) Credit for entity level tax. Each partner or
shareholder of a taxpayer making the election under this
Section shall be allowed a credit against the tax imposed
under subsections (a) and (b) of Section 201 of this Act
for the taxable year of the partnership or Subchapter S
corporation for which an election is in effect ending
within or with the taxable year of the partner or
shareholder in an amount equal to 4.95% times the partner
or shareholder's distributive share of the net income of
the electing partnership or Subchapter S corporation, but

not to exceed the partner's or shareholder's share of the
tax imposed under paragraph (1) which is actually paid by
the partnership or Subchapter S corporation. If the
taxpayer is a partnership or Subchapter S corporation that
is itself a partner of a partnership making the election
under paragraph (1), the credit under this paragraph shall
be allowed to the taxpayer's partners or shareholders (or
if the partner is a partnership or Subchapter S
corporation then its partners or shareholders) 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. If the
amount of the credit allowed under this paragraph exceeds
the partner's or shareholder's liability for tax imposed
under subsections (a) and (b) of Section 201 of this Act
for the taxable year, such excess shall be treated as an
overpayment for purposes of Section 909 of this Act.
(5) Nonresidents. A nonresident individual who is a
partner or shareholder of a partnership or Subchapter S
corporation for a taxable year for which an election is in
effect under paragraph (1) shall not be required to file
an income tax return under this Act for such taxable year
if the only source of net income of the individual (or the
individual and the individual's spouse in the case of a
joint return) is from an entity making the election under
paragraph (1) and the credit allowed to the partner or

shareholder under paragraph (4) equals or exceeds the
individual's liability for the tax imposed under
subsections (a) and (b) of Section 201 of this Act for the
taxable year.
(6) Liability for tax. Except as provided in this
paragraph, a partnership or Subchapter S making the
election under paragraph (1) is liable for the
entity-level tax imposed under paragraph (2). If the
electing partnership or corporation fails to pay the full
amount of tax deemed assessed under paragraph (2), the
partners or shareholders shall be liable to pay the tax
assessed (including penalties and interest). Each partner
or shareholder shall be liable for the unpaid assessment
based on the ratio of the partner's or shareholder's share
of the net income of the partnership over the total net
income of the partnership. If the partnership or
Subchapter S corporation fails to pay the tax assessed
(including penalties and interest) and thereafter an
amount of such tax is paid by the partners or
shareholders, such amount shall not be collected from the
partnership or corporation.
(7) Foreign tax. For purposes of the credit allowed
under Section 601(b)(3) of this Act, tax paid by a
partnership or Subchapter S corporation to another state
which, as determined by the Department, is substantially
similar to the tax imposed under this subsection, shall be

considered tax paid by the partner or shareholder to the
extent that the partner's or shareholder's share of the
income of the partnership or Subchapter S corporation
allocated and apportioned to such other state bears to the
total income of the partnership or Subchapter S
corporation allocated or apportioned to such other state.
(8) Suspension of withholding. The provisions of
Section 709.5 of this Act shall not apply to a partnership
or Subchapter S corporation for the taxable year for which
an election under paragraph (1) is in effect.
(9) Requirement to pay estimated tax. For each taxable
year for which an election under paragraph (1) is in
effect, a partnership or Subchapter S corporation is
required to pay estimated tax for such taxable year under
Sections 803 and 804 of this Act if the amount payable as
estimated tax can reasonably be expected to exceed $500.
(10) The provisions of this subsection shall apply
only with respect to taxable years for which the
limitation on individual deductions applies under Section
164(b)(6) of the Internal Revenue Code.
(Source: P.A. 101-9, eff. 6-5-19; 101-31, eff. 6-28-19;
101-207, eff. 8-2-19; 101-363, eff. 8-9-19; 102-558, eff.
8-20-21; 102-658, eff. 8-27-21.)
(35 ILCS 5/214)
Sec. 214. Tax credit for affordable housing donations.

(a) Beginning with taxable years ending on or after
December 31, 2001 and until the taxable year ending on
December 31, 2026, a taxpayer who makes a donation under
Section 7.28 of the Illinois Housing Development Act is
entitled to a credit against the tax imposed by subsections
(a) and (b) of Section 201 in an amount equal to 50% of the
value of the donation. For taxable years ending before
December 31, 2023, partners Partners, shareholders of
subchapter S corporations, and owners of limited liability
companies (if the limited liability company is treated as a
partnership for purposes of federal and State income taxation)
are entitled to a credit under this Section to be determined in
accordance with the determination of income and distributive
share of income under Sections 702 and 703 and subchapter S of
the Internal Revenue Code. For taxable years ending on or
after December 31, 2023, partners and shareholders of
subchapter S corporations are entitled to a credit under this
Section as provided in Section 251. Persons or entities not
subject to the tax imposed by subsections (a) and (b) of
Section 201 and who make a donation under Section 7.28 of the
Illinois Housing Development Act are entitled to a credit as
described in this subsection and may transfer that credit as
described in subsection (c).
(b) 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) The transfer of the tax credit allowed under this
Section may be made (i) to the purchaser of land that has been
designated solely for affordable housing projects in
accordance with the Illinois Housing Development Act or (ii)
to another donor who has also made a donation in accordance
with Section 7.28 of the Illinois Housing Development Act.
(d) A taxpayer claiming the credit provided by this
Section must maintain and record any information that the
Department may require by regulation regarding the project for
which the credit is claimed. When claiming the credit provided
by this Section, the taxpayer must provide information
regarding the taxpayer's donation to the project under the
Illinois Housing Development Act.
(Source: P.A. 102-16, eff. 6-17-21; 102-175, eff. 7-29-21.)
(35 ILCS 5/216)
Sec. 216. Credit for wages paid to ex-felons.
(a) For each taxable year beginning on or after January 1,
2007, 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% of qualified wages paid by the
taxpayer during the taxable year to one or more Illinois

residents who are qualified ex-offenders. The total credit
allowed to a taxpayer with respect to each qualified
ex-offender may not exceed $1,500 for all taxable years. For
taxable years ending before December 31, 2023, for 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. For taxable years ending on or after December 31, 2023,
partners and shareholders of subchapter S corporations are
entitled to a credit under this Section as provided in Section
251.
(b) For purposes of this Section, "qualified wages":
(1) includes only wages that are subject to federal
unemployment tax under Section 3306 of the Internal
Revenue Code, without regard to any dollar limitation
contained in that Section;
(2) does not include any amounts paid or incurred by
an employer for any period to any qualified ex-offender
for whom the employer receives federally funded payments
for on-the-job training of that qualified ex-offender for
that period; and
(3) includes only wages attributable to service

rendered during the one-year period beginning with the day
the qualified ex-offender begins work for the employer.
If the taxpayer has received any payment from a program
established under Section 482(e)(1) of the federal Social
Security Act with respect to a qualified ex-offender, then,
for purposes of calculating the credit under this Section, the
amount of the qualified wages paid to that qualified
ex-offender must be reduced by the amount of the payment.
(c) For purposes of this Section, "qualified ex-offender"
means any person who:
(1) has been convicted of a crime in this State or of
an offense in any other jurisdiction, not including any
offense or attempted offense that would subject a person
to registration under the Sex Offender Registration Act;
(2) was sentenced to a period of incarceration in an
Illinois adult correctional center; and
(3) was hired by the taxpayer within 3 years after
being released from an Illinois adult correctional center.
(d) 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.
(e) This Section is exempt from the provisions of Section
250.
(Source: P.A. 98-165, eff. 8-5-13.)
(35 ILCS 5/218)
Sec. 218. Credit for student-assistance contributions.
(a) For taxable years ending on or after December 31, 2009
and on or before December 31, 2024, each taxpayer who, during
the taxable year, makes a contribution (i) to a specified
individual College Savings Pool Account under Section 16.5 of
the State Treasurer Act or (ii) to the Illinois Prepaid
Tuition Trust Fund in an amount matching a contribution made
in the same taxable year by an employee of the taxpayer to that
Account or Fund is entitled to a credit against the tax imposed
under subsections (a) and (b) of Section 201 in an amount equal
to 25% of that matching contribution, but not to exceed $500
per contributing employee per taxable year.
(b) For taxable years ending before December 31, 2023, for
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 is 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. For taxable years ending on or after December 31, 2023,
partners and shareholders of subchapter S corporations are
entitled to a credit under this Section as provided in Section
251.
(c) The credit may not be carried back. 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 claiming the credit under this Section must
maintain and record any information that the Illinois Student
Assistance Commission, the Office of the State Treasurer, or
the Department may require regarding the matching contribution
for which the credit is claimed.
(Source: P.A. 101-645, eff. 6-26-20; 102-289, eff. 8-6-21.)
(35 ILCS 5/222)
Sec. 222. Live theater production credit.
(a) For tax years beginning on or after January 1, 2012 and
beginning prior to January 1, 2027, a taxpayer who has
received a tax credit award under the Live Theater Production
Tax Credit Act is entitled to a credit against the taxes
imposed under subsections (a) and (b) of Section 201 of this

Act in an amount determined under that Act by the Department of
Commerce and Economic Opportunity.
(b) For taxable years ending before December 31, 2023, if
If the taxpayer is a partnership, limited liability
partnership, limited liability company, or Subchapter S
corporation, the tax credit award is allowed to the partners,
unit holders, or shareholders 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. For taxable years ending on or after December 31, 2023,
if the taxpayer is a partnership or Subchapter S corporation,
then the provisions of Section 251 apply.
(c) A sale, assignment, or transfer of the tax credit
award may be made by the taxpayer earning the credit within one
year after the credit is awarded in accordance with rules
adopted by the Department of Commerce and Economic
Opportunity.
(d) The Department of Revenue, in cooperation with the
Department of Commerce and Economic Opportunity, shall adopt
rules to enforce and administer the provisions of this
Section.
(e) The tax credit award may not be carried back. 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 tax years following the excess credit year.
The tax credit award shall be applied to the earliest year for

which there is a tax liability. If there are credits from more
than one tax year that are available to offset liability, the
earlier credit shall be applied first. In no event may a credit
under this Section reduce the taxpayer's liability to less
than zero.
(Source: P.A. 102-16, eff. 6-17-21.)
(35 ILCS 5/224)
Sec. 224. Invest in Kids credit.
(a) For taxable years beginning on or after January 1,
2018 and ending before January 1, 2024, each taxpayer for whom
a tax credit has been awarded by the Department under the
Invest in Kids Act is entitled to a credit against the tax
imposed under subsections (a) and (b) of Section 201 of this
Act in an amount equal to the amount awarded under the Invest
in Kids Act.
(b) For taxable years ending before December 31, 2023, for
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, the credit under this Section shall
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. For taxable
years ending on or after December 31, 2023, partners and
shareholders of subchapter S corporations are entitled to a

credit under this Section as provided in Section 251.
(c) The credit may not be carried back and may not 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 the liability, the earlier credit
shall be applied first.
(d) A tax credit awarded by the Department under the
Invest in Kids Act may not be claimed for any qualified
contribution for which the taxpayer claims a federal income
tax deduction.
(Source: P.A. 102-699, eff. 4-19-22.)
(35 ILCS 5/228)
Sec. 228. Historic preservation credit. For tax years
beginning on or after January 1, 2019 and ending on or before
December 31, 2023, a taxpayer who qualifies for a credit under
the Historic Preservation Tax Credit Act is entitled to a
credit against the taxes imposed under subsections (a) and (b)
of Section 201 of this Act as provided in that Act. For taxable
years ending before December 31, 2023, if If the taxpayer is a
partnership, Subchapter S corporation, or a limited liability
company the credit shall be allowed to the partners,

shareholders, or members 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 provided
that credits granted to a partnership, a limited liability
company taxed as a partnership, or other multiple owners of
property shall be passed through to the partners, members, or
owners respectively on a pro rata basis or pursuant to an
executed agreement among the partners, members, or owners
documenting any alternate distribution method. For taxable
years ending on or after December 31, 2023, if the taxpayer is
a partnership or a Subchapter S corporation, then the
provisions of Section 251 apply. If the amount of any tax
credit awarded under this Section exceeds the qualified
taxpayer's income tax liability for the year in which the
qualified rehabilitation plan was placed in service, the
excess amount may be carried forward as provided in the
Historic Preservation Tax Credit Act.
(Source: P.A. 101-81, eff. 7-12-19; 102-741, eff. 5-6-22.)
(35 ILCS 5/229)
Sec. 229. Data center construction employment tax credit.
(a) A taxpayer who has been awarded a credit by the
Department of Commerce and Economic Opportunity under Section
605-1025 of the Department of Commerce and Economic
Opportunity Law of the Civil Administrative Code of Illinois
is entitled to a credit against the taxes imposed under

subsections (a) and (b) of Section 201 of this Act. The amount
of the credit shall be 20% of the wages paid during the taxable
year to a full-time or part-time employee of a construction
contractor employed by a certified data center if those wages
are paid for the construction of a new data center in a
geographic area that meets any one of the following criteria:
(1) the area has a poverty rate of at least 20%,
according to the U.S. Census Bureau American Community
Survey 5-Year Estimates;
(2) 75% or more of the children in the area
participate in the federal free lunch program, according
to reported statistics from the State Board of Education;
(3) 20% or more of the households in the area receive
assistance under the Supplemental Nutrition Assistance
Program (SNAP), according to data from the U.S. Census
Bureau American Community Survey 5-year Estimates; or
(4) the area has an average unemployment rate, as
determined by the Department of Employment Security, that
is more than 120% of the national unemployment average, as
determined by the U.S. Department of Labor, for a period
of at least 2 consecutive calendar years preceding the
date of the application.
For taxable years ending before December 31, 2023, if If
the taxpayer is a partnership, a Subchapter S corporation, or
a limited liability company that has elected partnership tax
treatment, the credit shall be allowed to the partners,

shareholders, or members 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, as
applicable. For taxable years ending on or after December 31,
2023, if the taxpayer is a partnership or a Subchapter S
corporation, then the provisions of Section 251 apply. The
Department, in cooperation with the Department of Commerce and
Economic Opportunity, shall adopt rules to enforce and
administer this Section. This Section is exempt from the
provisions of Section 250 of this Act.
(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) No credit shall be allowed with respect to any
certification for any taxable year ending after the revocation
of the certification by the Department of Commerce and
Economic Opportunity. Upon receiving notification by the
Department of Commerce and Economic Opportunity of the
revocation of certification, the Department shall notify the
taxpayer that no credit is allowed for any taxable year ending

after the revocation date, as stated in such notification. If
any credit has been allowed with respect to a certification
for a taxable year ending after the revocation date, any
refund paid to the taxpayer for that taxable year shall, to the
extent of that credit allowed, be an erroneous refund within
the meaning of Section 912 of this Act.
(Source: P.A. 101-31, eff. 6-28-19; 101-604, eff. 12-13-19;
102-558, eff. 8-20-21.)
(35 ILCS 5/231)
Sec. 231. Apprenticeship education expense credit.
(a) As used in this Section:
"Department" means the Department of Commerce and Economic
Opportunity.
"Employer" means an Illinois taxpayer who is the employer
of the qualifying apprentice.
"Qualifying apprentice" means an individual who: (i) is a
resident of the State of Illinois; (ii) is at least 16 years
old at the close of the school year for which a credit is
sought; (iii) during the school year for which a credit is
sought, was a full-time apprentice enrolled in an
apprenticeship program which is registered with the United
States Department of Labor, Office of Apprenticeship; and (iv)
is employed in Illinois by the taxpayer who is the employer.
"Qualified education expense" means the amount incurred on
behalf of a qualifying apprentice not to exceed $3,500 for

tuition, book fees, and lab fees at the school or community
college in which the apprentice is enrolled during the regular
school year.
"School" means any public or nonpublic secondary school in
Illinois that is: (i) an institution of higher education that
provides a program that leads to an industry-recognized
postsecondary credential or degree; (ii) an entity that
carries out programs registered under the federal National
Apprenticeship Act; or (iii) another public or private
provider of a program of training services, which may include
a joint labor-management organization.
(b) For taxable years beginning on or after January 1,
2020, and beginning on or before January 1, 2025, the employer
of one or more qualifying apprentices shall be allowed a
credit against the tax imposed by subsections (a) and (b) of
Section 201 of the Illinois Income Tax Act for qualified
education expenses incurred on behalf of a qualifying
apprentice. The credit shall be equal to 100% of the qualified
education expenses, but in no event may the total credit
amount awarded to a single taxpayer in a single taxable year
exceed $3,500 per qualifying apprentice. A taxpayer shall be
entitled to an additional $1,500 credit against the tax
imposed by subsections (a) and (b) of Section 201 of the
Illinois Income Tax Act if (i) the qualifying apprentice
resides in an underserved area as defined in Section 5-5 of the
Economic Development for a Growing Economy Tax Credit Act

during the school year for which a credit is sought by an
employer or (ii) the employer's principal place of business is
located in an underserved area, as defined in Section 5-5 of
the Economic Development for a Growing Economy Tax Credit Act.
In no event shall a credit under this Section reduce the
taxpayer's liability under this Act to less than zero. For
taxable years ending before December 31, 2023, for 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. For taxable years ending on or after December 31, 2023,
partners and shareholders of subchapter S corporations are
entitled to a credit under this Section as provided in Section
251.
(c) The Department shall implement a program to certify
applicants for an apprenticeship credit under this Section.
Upon satisfactory review, the Department shall issue a tax
credit certificate to an employer incurring costs on behalf of
a qualifying apprentice stating the amount of the tax credit
to which the employer is entitled. If the employer is seeking a
tax credit for multiple qualifying apprentices, the Department
may issue a single tax credit certificate that encompasses the

aggregate total of tax credits for qualifying apprentices for
a single employer.
(d) The Department, in addition to those powers granted
under the Civil Administrative Code of Illinois, is granted
and shall have all the powers necessary or convenient to carry
out and effectuate the purposes and provisions of this
Section, including, but not limited to, power and authority
to:
(1) Adopt rules deemed necessary and appropriate for
the administration of this Section; establish forms for
applications, notifications, contracts, or any other
agreements; and accept applications at any time during the
year and require that all applications be submitted via
the Internet. The Department shall require that
applications be submitted in electronic form.
(2) Provide guidance and assistance to applicants
pursuant to the provisions of this Section and cooperate
with applicants to promote, foster, and support job
creation within the State.
(3) Enter into agreements and memoranda of
understanding for participation of and engage in
cooperation with agencies of the federal government, units
of local government, universities, research foundations or
institutions, regional economic development corporations,
or other organizations for the purposes of this Section.
(4) Gather information and conduct inquiries, in the

manner and by the methods it deems desirable, including,
without limitation, gathering information with respect to
applicants for the purpose of making any designations or
certifications necessary or desirable or to gather
information in furtherance of the purposes of this Act.
(5) Establish, negotiate, and effectuate any term,
agreement, or other document with any person necessary or
appropriate to accomplish the purposes of this Section,
and consent, subject to the provisions of any agreement
with another party, to the modification or restructuring
of any agreement to which the Department is a party.
(6) Provide for sufficient personnel to permit
administration, staffing, operation, and related support
required to adequately discharge its duties and
responsibilities described in this Section from funds made
available through charges to applicants or from funds as
may be appropriated by the General Assembly for the
administration of this Section.
(7) Require applicants, upon written request, to issue
any necessary authorization to the appropriate federal,
State, or local authority or any other person for the
release to the Department of information requested by the
Department, including, but not be limited to, financial
reports, returns, or records relating to the applicant or
to the amount of credit allowable under this Section.
(8) Require that an applicant shall, at all times,

keep proper books of record and account in accordance with
generally accepted accounting principles consistently
applied, with the books, records, or papers related to the
agreement in the custody or control of the applicant open
for reasonable Department inspection and audits,
including, without limitation, the making of copies of the
books, records, or papers.
(9) Take whatever actions are necessary or appropriate
to protect the State's interest in the event of
bankruptcy, default, foreclosure, or noncompliance with
the terms and conditions of financial assistance or
participation required under this Section or any agreement
entered into under this Section, including the power to
sell, dispose of, lease, or rent, upon terms and
conditions determined by the Department to be appropriate,
real or personal property that the Department may recover
as a result of these actions.
(e) The Department, in consultation with the Department of
Revenue, shall adopt rules to administer this Section. The
aggregate amount of the tax credits that may be claimed under
this Section for qualified education expenses incurred by an
employer on behalf of a qualifying apprentice shall be limited
to $5,000,000 per calendar year. If applications for a greater
amount are received, credits shall be allowed on a first-come
first-served basis, based on the date on which each properly
completed application for a certificate of eligibility is

received by the Department. If more than one certificate is
received on the same day, the credits will be awarded based on
the time of submission for that particular day.
(f) An employer may not sell or otherwise transfer a
credit awarded under this Section to another person or
taxpayer.
(g) The employer shall provide the Department such
information as the Department may require, including but not
limited to: (i) the name, age, and taxpayer identification
number of each qualifying apprentice employed by the taxpayer
during the taxable year; (ii) the amount of qualified
education expenses incurred with respect to each qualifying
apprentice; and (iii) the name of the school at which the
qualifying apprentice is enrolled and the qualified education
expenses are incurred.
(h) On or before July 1 of each year, the Department shall
report to the Governor and the General Assembly on the tax
credit certificates awarded under this Section for the prior
calendar year. The report must include:
(1) the name of each employer awarded or allocated a
credit;
(2) the number of qualifying apprentices for whom the
employer has incurred qualified education expenses;
(3) the North American Industry Classification System
(NAICS) code applicable to each employer awarded or
allocated a credit;

(4) the amount of the credit awarded or allocated to
each employer;
(5) the total number of employers awarded or allocated
a credit;
(6) the total number of qualifying apprentices for
whom employers receiving credits under this Section
incurred qualified education expenses; and
(7) the average cost to the employer of all
apprenticeships receiving credits under this Section.
(Source: P.A. 101-207, eff. 8-2-19; 102-558, eff. 8-20-21.)
(35 ILCS 5/237)
Sec. 237. REV Illinois Investment Tax credits.
(a) For tax years beginning on or after the effective date
of this amendatory Act of the 102nd General Assembly, a
taxpayer shall be allowed a credit against the tax imposed by
subsections (a) and (b) of Section 201 for investment in
qualified property which is placed in service at the site of a
REV Illinois Project subject to an agreement between the
taxpayer and the Department of Commerce and Economic
Opportunity pursuant to the Reimagining Electric Vehicles in
Illinois Act. For taxable years ending before December 31,
2023, for 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. For taxable years ending on or after December
31, 2023, partners and shareholders of subchapter S
corporations are entitled to a credit under this Section as
provided in Section 251. The credit shall be 0.5% of the basis
for such property. The credit shall be available only in the
taxable year in which the property is placed in service and
shall not be allowed to the extent that it would reduce a
taxpayer's liability for the tax imposed by subsections (a)
and (b) of Section 201 to below zero. The credit shall be
allowed for the tax year in which the property is placed in
service, or, if the amount of the credit exceeds the tax
liability for that year, whether it exceeds the original
liability or the liability as later amended, such excess may
be carried forward and applied to the tax liability of the 5
taxable years following the excess credit year. The credit
shall be applied to the earliest year for which there is a
liability. If there is credit from more than one tax year that
is available to offset a liability, the credit accruing first
in time shall be applied first.
(b) The term qualified property means property which:
(1) is tangible, whether new or used, including
buildings and structural components of buildings;
(2) is depreciable pursuant to Section 167 of the

Internal Revenue Code, except that "3-year property" as
defined in Section 168(c)(2)(A) of that Code is not
eligible for the credit provided by this Section;
(3) is acquired by purchase as defined in Section
179(d) of the Internal Revenue Code;
(4) is used at the site of the REV Illinois Project by
the taxpayer; and
(5) has not been previously used in Illinois in such a
manner and by such a person as would qualify for the credit
provided by this Section.
(c) The basis of qualified property shall be the basis
used to compute the depreciation deduction for federal income
tax purposes.
(d) If the basis of the property for federal income tax
depreciation purposes is increased after it has been placed in
service at the site of the REV Illinois Project by the
taxpayer, the amount of such increase shall be deemed property
placed in service on the date of such increase in basis.
(e) The term "placed in service" shall have the same
meaning as under Section 46 of the Internal Revenue Code.
(f) If during any taxable year, any property ceases to be
qualified property in the hands of the taxpayer within 48
months after being placed in service, or the situs of any
qualified property is moved from the REV Illinois Project site
within 48 months after being placed in service, the tax
imposed under subsections (a) and (b) of Section 201 for such

taxable year shall be increased. Such increase shall be
determined by (i) recomputing the investment credit which
would have been allowed for the year in which credit for such
property was originally allowed by eliminating such property
from such computation, and (ii) subtracting such recomputed
credit from the amount of credit previously allowed. For the
purposes of this subsection (f), a reduction of the basis of
qualified property resulting from a redetermination of the
purchase price shall be deemed a disposition of qualified
property to the extent of such reduction.
(Source: P.A. 102-669, eff. 11-16-21.)
(35 ILCS 5/251 new)
Sec. 251. Pass-through of credits to partners and S
corporation shareholders. For taxable years ending on or after
December 31, 2023, if any person earning a credit against the
tax imposed under subsections (a) and (b) of Section 201 is a
partnership or Subchapter S corporation, the credit is allowed
to pass through to the partners and shareholders 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, or as otherwise agreed by the partners
or shareholders, provided that such agreement shall be
executed in writing prior to the due date of the return for the
taxable year and meet such other requirements as the
Department may establish by rule. Partnership has the meaning

prescribed in subdivision (a)(16) of Section 1501.