HB5343 Summary

• Amends the Illinois Income Tax Act to establish a 3% tax rate on income attributable to Subchapter S corporation shareholders, effective for taxable years beginning on or after January 1, 2012.

• Creates items (5.5) and (5.6) specifying that S corporation shareholders pay 3% on S corp income while paying the applicable individual rate (5%-3.25%) on non-S corp income.

• For taxable years beginning prior to January 1, 2012 and ending after December 31, 2011, allows a blended approach with 3% applied to S corp income allocated after December 31, 2011.

• Extends the investment credit deadline from December 31, 2013 to December 31, 2018, and modifies the research and development credit period to end January 1, 2016 instead of January 1, 2011.

• Effective immediately upon becoming law.