HB2423 Summary

• Amends the Illinois Income Tax Act to create an Illinois Innovation Credit equal to 1.3% of qualified research expenses made by a taxpayer in Illinois for tax years ending on or after December 31, 2023.

• Defines qualified research as activities promoting new computer modeling technology, 3-D modeling or imaging technology, new public infrastructure materials, or new public infrastructure design.

• Specifies qualified research expenses include wages paid to employees for qualified services, supplies used in conducting qualified research, and payments to third parties for qualified research.

• Allows taxpayers to carry forward unused credits for up to 5 taxable years, provided the credit does not reduce tax liability below zero.

• Clarifies that taxpayers are not required to have obtained a federal research and development credit to qualify for the Illinois Innovation Credit.