IL HB4492

Amends the Illinois Income Tax Act to create a withholding tax credit for employers with 250 or fewer full-time equivalent employees who provide raises to qualified employees.

Credit applies to reporting periods beginning January 1, 2021 through December 31, 2029, with tiered percentages: 25% for compensation up to $37,400 (annualized), 20% for $37,400-$41,600, and 15% for $41,600-$52,000.

Qualified employees must have worked at least 180 consecutive days before the raise takes effect and must maintain a post-raise annual salary of at least $31,200; raises must be permanent increases in hourly pay or salary without reduced hours or benefits.

Credits cannot be claimed for more than 2 years after a raise's effective date and cannot reduce an employer's withholding tax liability below zero for any reporting period.

Employers must demonstrate increased average wages for employees earning less than $52,000 in the current reporting period compared to the same period in the prior calendar year to qualify for credits.