IL HB2221

Creates a 50% income tax credit for taxpayers who install an approved NFPA 13D residential fire sprinkler system in a new or existing residential dwelling in Illinois during the taxable year, with a maximum credit of $10,000 per taxpayer per year.

Requires taxpayers to provide the Department with a final invoice documenting total installation costs, including water main tap fees, combined water service fees, piping and valve modifications, and all installation and testing fees.

Allows excess credits that exceed tax liability to be carried forward and applied to tax liability in the following five taxable years, with earlier credits applied first.

Applies to taxable years ending on or after December 31, 2023, and is exempt from the Illinois Income Tax Act's automatic sunset provisions.

Takes effect immediately upon becoming law.