IL HB4406

Creates an income tax credit for foster care parents equal to foster care expenses paid or incurred, not to exceed $1,000 per taxable year, for qualifying dependent children.

Applies to taxable years beginning on or after January 1, 2024, and allows the credit to be claimed in the year the taxpayer becomes the legal guardian of the qualifying dependent child.

Requires taxpayer to be under contract with the Department of Children and Family Services and provide care for at least 6 months during the taxable year to receive the full credit; allows prorated credit for less than 6 months of care.

Permits excess credits exceeding tax liability to be carried forward and applied to tax liability for the 5 following taxable years, with earlier credits applied first.

Defines "qualifying dependent child" as an Illinois resident in the custody of the Department of Children and Family Services who is the foster child of the taxpayer claiming the credit.