If you are an Illinois small business that has created new positions within your organization, you may qualify for a tax credit!
Under the Illinois Small Business Job Creation Tax Credit program, your business may qualify for a tax credit of $2,500 for each NEW job they created between July 1st, 2012 until June 30th of 2016.
Here are the frequently asked questions about this tax credit program:
What businesses are eligible for this tax credit?
- There are two categories of businesses eligible to receive this credit:
- The business must be located within the State of Illinois and must be engaged in interstate or intrastate commerce.
- Is a business with 50 or fewer full-time employees on July 1, 2012. The determination of whether an employer has 50 or fewer employees on July 1, 2012, includes all employees in every location, which includes both in Illinois and out of state employment totals.
- Any-sized business that hires a 2010 “Put Illinois to Work Program” worker-trainee.
- An eligible business must maintain a consistent/positive headcount in order to receive the tax credits. If a business has 30 full-time employees, they create 5 new positions that they register for tax credit consideration, however, during that year they decided to eliminate 7 unrelated positions; then they would not be eligible to receive any tax credits.
- New businesses hiring their first Illinois employee(s) may qualify for the credit.
How much is the tax credit worth?
- For small businesses under 50 full-time employees: The credit is for $2,500 per job (that can be carried forward) and it must be applied against their Illinois withholding tax. The employer is entitled to one credit ($2,500) if the position is filled for one year.
- For any-sized businesses hiring “Put Illinois to Work” worker-trainees: Employers in this category are entitled to one-half of the credit ($1,250) allowable if that employee is employed for at least 6 months after the date of hire. The employer is entitled to the other half of the credit ($1,250) if that employee is employed for at least 12 months after the date of hire.
- A credit can be taken against a company’s withholding tax liability.
- The program is capped at $50 million worth of credits issued. (First-Come-First-Serve)
What are the guidelines for the new position to be eligible for the credit?
- The position must have been created between July 1, 2012 and June 30, 2016.
- The position must pay no less that $10.00 per hour or the equivalent salary for a new employee for a minimum of $18,200 annualized.
- For small businesses: Eligibility for the credit does not require that a particular individual employee be retained for one year, only that a new, full time Illinois job be created and sustained for one year.
Is there a cut-off date for businesses to register their company and their newly created job(s) in this program?
- Yes, businesses must register their company information and their newly created job(s) no later than June 30, 2016.
- Interested businesses can become registered for the program by visiting, https://jobstaxcredit.illinois.gov
Are any small businesses exempted?
- No.
Is the tax credit limited to a particular industry? Does it exclude retail or restaurants?
- No, as long as the position created is full-time and the position pays no less that $10.00 per hour or the equivalent salary for a new employee for a minimum of $18,200 annualized.
Are there any salary requirements?
- The position must pay no less that $10.00 per hour or the equivalent salary for a new employee for a minimum of $18,200 annualized.
Find out more about this tax credit program and register your business by visiting https://jobstaxcredit.illinois.gov or by contacting one of MidwestHR Business Development team members at (630) 836-3000.