SB2567 Summary

• Amends the Illinois Income Tax Act to establish a withholding tax credit for employers with 50 or fewer full-time equivalent employees, effective for reporting periods beginning January 1, 2020.

• Credit amount determined by the Metropolitan and Nonmetropolitan area where the employee works, using U.S. Bureau of Labor Statistics designations as of May 2017, with varying percentages by region and year.

• For 2020, all regions receive a 25% maximum credit; starting 2021, Chicago and Cook County receive lower percentages (30-40% by 2025) while nonmetropolitan areas receive higher percentages (45-60% by 2023).

• Employees must have been employed for at least 90 consecutive days prior to the reporting period to qualify, and employers must demonstrate wage growth for employees earning under $55,000 compared to the prior year.

• Credit applies against withheld income tax payments and cannot reduce tax liability below zero; excess credits may be carried forward up to 5 years.