HB3407 Summary

• Amends the Illinois Income Tax Act to provide a tax credit for qualified taxpayers with at least $20,000 in cumulative undergraduate student loan debt and at least $5,000 in outstanding debt at time of application.

• Individual credit awards capped at $5,000 per taxpayer per year, with total annual credits statewide not to exceed $5,000,000.

• Taxpayers must apply by September 15 each year and certify they will use the credit to repay undergraduate student loans within 2 years or face recapture of the full credit amount.

• Department of Revenue must prioritize credit recipients based on debt-to-income ratios, graduation from Illinois public universities, first-time applicants, and in-state tuition eligibility.

• Unused credits may be carried forward for up to 5 subsequent taxable years; effective for taxable years beginning January 1, 2019.