HB3476 Summary: Illinois Income Tax - Low-Taxed Investment Income Surcharge

• Imposes a surcharge on Illinois residents' "low-taxed investment income" for tax years ending on or after December 31, 2021, defined as long-term capital gains, dividends, and other income taxed at preferential federal rates under Internal Revenue Code Section 1(h).

• Surcharge amount equals the difference between the applicable federal ordinary income tax rate and the preferential capital gains rate, multiplied by the low-taxed investment income amount, then phased in over $50,000 of income.

• Exempts taxpayers based on filing status and Illinois taxable income thresholds: married joint filers ($250,000), heads of household ($200,000), and all other taxpayers including unmarried individuals and trusts ($150,000).

• Makes the bill effective immediately upon becoming law.