Bill > HB1602

This bill amends the Illinois Income Tax Act by permanently establishing the research and development (R&D) tax credit. Specifically, the bill removes language that previously limited the R&D credit to ending prior to January 1, 2032, effectively making the credit a permanent feature of the state's tax code. The credit allows taxpayers to claim 6.5% of qualifying expenditures for increasing research activities within the state, with the ability to carry forward unused credits for up to 5 years. The credit applies to expenses that would be allowable under the federal research activities credit outlined in Section 41 of the Internal Revenue Code and is calculated by comparing a taxpayer's current year research expenditures to their average expenditures from the previous three years. For partners and shareholders of S corporations, the credit can be allocated based on their share of income, with special provisions for how the credit is applied and transferred starting in tax years ending on or after December 31, 2023.

Budget and Finance

https://www.ilga.gov/legislation/BillStatus.asp?DocNum=1602&GAID=18&DocTypeID=HB&SessionID=114&GA=104