HB2900 Summary

• Amends the Illinois Income Tax Act contingent on Senate Bill 1 of the 101st General Assembly becoming law to create a withholding tax credit for employers with 50 or fewer full-time equivalent employees.

• Credit applies to reporting periods beginning January 1, 2020 and thereafter for qualified employees earning at or below the required minimum wage, with credit amounts determined by the employee's metropolitan or nonmetropolitan area of work as defined by the United States Bureau of Labor Statistics as of May 2017.

• Maximum credit percentages vary by region and year, ranging from 30% to 60% of compensation increases, with higher percentages for non-metropolitan areas (up to 60% for Northwest, West Central, East Central, and South Illinois areas beginning January 1, 2023).

• Requires employees to have worked at least 90 consecutive days immediately preceding the reporting period to qualify, and limits credits to employees whose average wage increased compared to the prior year same reporting period.

• Takes effect immediately upon becoming law.