IL HB4965

Creates an income tax credit for businesses with an average of 100 or fewer full-time employees during the taxable year, effective for taxable years beginning on or after January 1, 2023.

Credit amount equals 50% of costs incurred by the business in offering a paid family leave program to all of its full-time employees.

Defines "full-time employee" as an individual employed for at least 35 hours each week or who meets the standard of service generally accepted by industry custom or practice as full-time employment.

Unused credits may be carried forward and applied to tax liability for up to 5 taxable years following the year in which the excess credit occurred, with earlier credits applied first.

Partners, shareholders of S corporations, and owners of pass-through entities are eligible for the credit based on their distributive share of income under federal tax code sections.