IL HB4294

Increases the percentage of state income tax revenue transferred from the General Revenue Fund to the Local Government Distributive Fund through a phased schedule beginning July 1, 2026

Sets transfer rates for individual/trust/estate income tax and pass-through entity tax at 8.5% (FY2027), 9% (FY2028), 9.5% (FY2029), and 10% (FY2030 and thereafter), up from the current 6.47%

Sets transfer rates for corporate income tax at 9.355% (FY2027), 9.57% (FY2028), 9.785% (FY2029), and 10% (FY2030 and thereafter), up from the current 6.85%

Restores the Local Government Distributive Fund allocation to the 10% level that existed prior to state income tax rate increases implemented in 2011 and 2017

Takes effect immediately upon becoming law