SB2047 Summary

• Amends the Illinois Income Tax Act to modify tax credit provisions for partnerships and Subchapter S corporations, effective for taxable years ending on or after December 31, 2023.

• Creates Section 251 establishing that tax credits pass through to partners and S corporation shareholders according to their distributive share of income under Internal Revenue Code sections 702, 704, and Subchapter S provisions, or by written agreement executed before the return due date.

• Modifies multiple tax credit sections (214, 216, 218, 222, 224, 228, 229, 231, 237) to apply the new Section 251 pass-through rules for taxable years ending on or after December 31, 2023, while maintaining prior law for earlier tax years.

• Maintains existing tax rates and credits for individuals and corporations under Section 201, including surcharges on gaming and medical cannabis business sales from 2019-2027.

• Preserves the pass-through entity tax election provisions under Section 201(p) allowing partnerships and S corporations to pay tax at entity level and provide credits to partners and shareholders for taxable years 2021-2025.