INCOME TAX-EMPLOYMENT CREDIT
The bill is intended to provide significant financial relief to employers while promoting job creation within the state. The credits are especially beneficial if the employment occurs in areas that have been defined as disproportionately impacted, either based on poverty levels, unemployment rates, or federal assistance program participation. By providing these credits, the state aims to encourage businesses to retain or increase their workforce, potentially aiding in the broader economic recovery following the disruptions caused by the pandemic.
SB0164 is a legislative proposal amending the Illinois Income Tax Act to establish an income tax credit for employers who hire 'qualified employees.' This bill is designed to incentivize the hiring of individuals who have been disproportionately affected by the COVID-19 pandemic. It is especially targeted at supporting employers with 500 or fewer employees, offering them a credit against their state tax liabilities for each qualified employee hired. The terms 'qualified employee' are specifically defined in the bill to include residents of Illinois who were unemployed due to COVID-19 and to exclude those who were furloughed by the employer prior to being rehired.
During discussions about SB0164, some concerns arose regarding the allocation and limits on the total amount of available credits. The bill caps the total credits issued at $100 million, which may raise questions about the long-term sustainability and adequacy of the program. Additionally, while proponents advocate for the benefits of incentivizing employment in economically distressed areas, opponents might argue that such fiscal measures could lead to inequities among different business sectors or geographic areas not covered by the credit provisions. As the bill moves through the legislative process, these points of debate will likely continue to be scrutinized.