HB0654 Summary

• Provides employers with a tax credit equal to 25% of distributions made to employees under a written profit-sharing agreement for taxable years beginning January 1, 2017 or later.

• Requires profit-sharing agreements to be certified by the Department no later than December 31 of the taxable year and provide employees with no less than 15% of gross profits.

• Allows partners, Subchapter S shareholders, and LLC owners (treated as partnerships) to claim the credit based on their distributive share of income under Internal Revenue Code sections.

• Permits unused credits to be carried forward and applied to tax liability in the 5 taxable years following the excess credit year, with earlier credits applied first.

• Exempts the credit from the automatic sunset provision in Section 250 of the Illinois Income Tax Act.