HB1578 Summary

• Extends the research and development tax credit expiration date from January 1, 2027 to January 1, 2037 for all taxpayers.

• Increases the research and development credit rate from 6.5% to 13% for qualifying quantum information science expenditures.

• Allows qualified startup taxpayers to elect to claim the research and development credit against their obligation to pay withholding taxes under Section 704A instead of against income tax liability.

• Defines "qualified startup taxpayer" as a business entity incorporated or organized no more than 5 years before the taxable year, with no prior Illinois income tax liability (excluding related members).

• Provides that 90% of excess research and development credit from quantum information science expenditures may be refunded to the taxpayer if the credit exceeds their Illinois income tax liability.