IL HB2388

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

Credit amount does not exceed $5,000 per taxpayer per year, with a total annual cap of $5,000,000 in credits approved by the Department of Revenue.

Qualified taxpayers must apply by September 15 of each year and certify they will use the credit for undergraduate student loan repayment within 2 years; failure to do so triggers recapture of the full credit amount.

Department of Revenue prioritizes credit distribution based on debt-to-income ratios, graduation from Illinois public universities, prior credit eligibility, and in-state tuition eligibility.

Excess credits not applied in the credit year can be carried forward and applied to tax liability for up to 5 following years; takes effect immediately upon enactment.