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Illinois bill passed to grant job creation tax credit to small businesses

November 10, 2010
Legislation before Illinois Gov. Pat Quinn would implement the governor’s proposed job creation tax credit for small businesses with a catch: businesses would not see the impact of the credit until Fiscal Year 2012 and only after certain conditions are met.  

In his proposed budget for FY 2011, Quinn announced his intent to provide a $2,500 tax credit for each new hire at a business that employs not more than 50 full-time employees. Both the governor and the legislative sponsors say the credit will generate an additional 20,000 jobs, but that figure is based on a credit cap of $50 million.

But an amendment to Senate Bill 1578 requires these small businesses to employ all new hires for 12 months before claiming the credit, meaning the legislation would have no fiscal impact in FY 2011; the state would not be obligated to begin awarding eligible businesses the credit until FY 2012.

The legislation also requires employers seeking the tax credit to apply to the Department of Commerce and Economic Opportunity for pre-certification at the time of the initial hire.  Eligible businesses are also subject to the terms and requirements of the Corporate Accountability Act, which subjects businesses to a number of reporting requirements.

The legislation passed both legislative chambers March 25, meaning Quinn has until about May 1 to sign or veto the measure.