On August 2, 2019, Illinois Governor J.B. Pritzker signed income tax legislation extending the life of the Illinois tax credit for research and development through December 31, 2026. This incentive will continue to provide a 6.5% credit benefit related to qualifying expenditures conducted within Illinois. Qualifying expenditures include those expenditures meeting the definition provided in Section 41 of the Internal Revenue Code and conducted in the state of Illinois. Calculation of the credit requires determining the excess of qualifying expenditures for the taxable year over the qualifying expenditures for the prior three taxable years. This tax credit is not refundable against corporate income taxes.
The recently signed legislation also created a new Illinois apprenticeship tax credit. The new apprenticeship tax credit will cover up to $3,500 of qualified education expenses incurred by employers on behalf of a qualifying apprentice. An additional $1,500 credit may be awarded if the company’s principal place of business is in an underserved area or the qualifying apprentice resides in an underserved area. The apprenticeship tax credit will sunset on December 31, 2024. Each year, the credit is limited to a first-come, first-served basis until the aggregate annual limit of $5 million is certified by the state.
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