As an incentive for Illinois small businesses and not-for-profits to expand and grow and to help combat high unemployment rates in Illinois, the state passed the Illinois Small Business Job Creation Tax Credit program. The job tax credit program, which started on July 1, 2012, was an extension of a pilot program that expired on June 30, 2011.
Under the Illinois Small Business Job Creation Tax Credit program, Illinois small businesses and not-for-profits that create new, full-time jobs may qualify for a $2, 500 job tax credit for each position created. In order to qualify, both your organization and the newly created position must meet certain criteria.
Business Requirements for Eligibility
- Organizations with 50 or fewer full-time employees as of July 1, 2012 are eligible for the job tax credit. This headcount includes employees at all of the organization’s locations, including any out-of-state employees. Also, subsidiaries are considered part of the parent company and their employees are included in the headcount.
- Any size organization that hires a “Put Illinois to Work Program” worker-trainee is eligible.
- New businesses hiring their first employees, not-for profit companies, and Professional Employer Organizations may also qualify for the job tax credit.
- Both the organization and the new position must be located in Illinois.
- The organization must have a net increase in the number of full-time employees required, meaning the headcount cannot decrease. For example, if the newly created position is still retained after 12 months, but other full-time positions have been eliminated, the organization will not qualify for the job tax credit.
Job Requirements for Eligibility
- The position must be newly created between July 1, 2012 and June 30, 2016.
- The job must pay at least $10 per hour or the equivalent salary of at least $18,200.
- The position must be sustained for a 12-month period, but it does not have to be held by the same person for all 12 months.
- The tax credit can be claimed for an hourly employee working a minimum of 35 hours per week or a full-time salaried employee. Independent contractors and anyone with a direct or indirect ownership interest in the company are not eligible for the job tax credit.
- Wages must be subject to Illinois withholding tax.
- The position cannot be filled with an employee who was previously employed by the organization 6 months prior to July 1, 2012.
Organizations can qualify for a $2,500 job tax credit for each newly created and retained position. The Illinois Small Business Job Creation Tax Credit program is capped at $50 million worth of credits issued. New positions must be registered and will be processed on a first-come, first-serve basis. Organizations may apply for the job tax credit as soon as the new, full-time employee begins work. Supporting data must be provided approximately one year after filing the new position to be issued a tax credit certificate. The job tax credit will be claimed against payroll tax withholdings to offset the amount the organization is required to pay in with regular payroll tax payments.
Evolve Financial Services can help your small business navigate through the requirements of the Illinois Small Business Job Creation Tax Credit program. Evolve offers a free assessment to determine if your organization qualifies for the job tax credits. If we find that your small business or not-for-profit organization qualifies for job tax credits, Evolve will assist you in registering all of the qualifying positions for a 10 percent processing fee for each credit for which your organization qualifies. We will assist you in registering all qualifying positions and ensuring that you receive the proper documentation to receive the tax credit. If you have questions about the Illinois Small Business Job Creation Tax Credit program, call Evolve Financial Services at 847-749-1851 or email us at firstname.lastname@example.org.