HB2583 Summary

• Creates a "small business asset purchase account" allowing taxpayers to deduct up to $50,000 per tax year in contributions and earned interest (for taxable years beginning January 1, 2022 or later).

• Account proceeds must be used to purchase property used primarily in Illinois for which a federal Section 179 deduction is claimed; funds used for other purposes trigger a 10% penalty.

• Adds modifications to the Illinois Income Tax Act (Section 203) requiring taxpayers to add back to income any amounts withdrawn from these accounts that are not used for qualifying Section 179 property purchases.

• Establishes a penalty under the Uniform Penalty and Interest Act (Section 3-3.5) imposing a 10% penalty on improper withdrawals used for non-qualifying purposes or property not predominantly used in Illinois.

• Effective immediately upon becoming law.