IL HB4578

Creates an 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, effective for taxable years ending on or after December 31, 2023.

Credit amount equals 50% of total installation costs but not to exceed $10,000 per taxpayer per taxable year, and system must be installed by a licensed fire sprinkler contractor.

Taxpayer must provide the Department with a final invoice documenting water main tap fees, combined sprinkler and domestic water service fees, piping and valve installation or modification costs, and all other installation and testing fees.

Excess credits that exceed tax liability in any year may be carried forward and applied to tax liability in the five following taxable years, with earlier credits applied first.

Credit is exempt from the Illinois Income Tax Act's automatic sunset provisions.