Can the Illinois Small Business Job Creation Tax Credit Help Your Business?

The Illinois Small Business Job Creation Tax Credit provides incentive for small business owners to get a leg up towards growing their business. If your Illinois business meets the eligibility requirements, you would be well served to apply for this credit.

The Basics

This tax credit is a collaboration between the Illinois Department of Commerce & Economic Opportunity (DECO) and the Illinois Department of Revenue, that provides incentive for small businesses who make withholding payments to the Illinois Department of Revenue to grow.

Primarily, small business with 50 or fewer employees, that create one or more new full-time positions by June 30, 2016, are eligible for a tax credit of $2,500 per new job.

Other circumstances can also receive a credit through this program. Any business that hires “Put Illinois To Work” can receive half of the credit ($1,250) if that employee is kept on for a minimum of six months from the date of hire. The other half of the credit (the remaining ($1,250) is obtainable if the employee is kept on for at least 12 months from the date of hire.

The Details

Small businesses — the aforementioned 50 people or less employed — do not have to keep an employee employed for a full year, as long as the new position is kept active for at least one year.

New hires are eligible for this credit if they receive a minimum of $10.00 per hour, or the equivalent overall salary. Annually, $18,200 is the minimum aggregate pay.

Independent contractors do not provide eligibility for this credit. Businesses will establish the new position in-house and sustain it for at least a year.

Eligibility or priority receipt of the credit is not determined by the payment level of the new positions created. As long as the positions are new, they are eligible for this credit.

If your business is a Non-Profit, the same guidelines still apply.

Lastly, the position cannot be by an employee with a vested interest in the company, amounting to more than 5% of profits.

Ongoing Tracking

To remain eligible for this credit, companies must register with JobsTaxCredit.illinois.gov, and provide information as requested on the ongoing position.

Supplying tax documents, proof of payment, and other documents on request is the continued responsibility of the business owner.

Where to Start

Small businesses will have to gather data to prove eligibility, providing proof of ongoing payments to employees. The program intends to assist the 95% of business in Illinois that fall in the fewer than 50 employees, small business category, while simultaneously encouraging job growth, so ongoing tracking is a necessity.

Klein Hall CPAs, a Naperville and Aurora accounting firm, is capable of consulting with your Illinois business to determine eligibility and gather the information you will need to provide to the DECO. This is a first-come, first-served program that a CPA can help you apply for quickly, and ensure that the correct documents post on an ongoing basis to your company’s Jobs Tax Credit profile.

It is important for small business owners to use every money-saving tool available to them. For further details on receiving this tax credit, contact us for a consultation.