HB2889 Summary

• Reduces the Illinois income tax rate on individuals, trusts, and estates from 4.95% to 3.75% for taxable years beginning on or after January 1, 2021.

• Creates a new subsection (5.6) establishing the 3.75% rate as the permanent rate for individuals, trusts, and estates for all taxable years beginning on or after January 1, 2021.

• Implements a transition provision for taxable years beginning before January 1, 2021 and ending after December 31, 2020, applying the reduced 3.75% rate to income earned after December 31, 2020.

• Maintains existing tax provisions for corporations and other taxpayers, including surcharges on gaming and cannabis businesses and various tax credits.

• Takes effect immediately upon becoming law.