Bill > SB3619

This bill amends the Illinois Income Tax Act to create a new tax credit for qualified employers who contribute to a health reimbursement arrangement (HRA) for their employees, starting with taxable years beginning on or after January 1, 2027. An HRA is a type of employer-funded health benefit plan that reimburses employees for qualified medical expenses, as described in Section 9831(d) of the Internal Revenue Code. To qualify for the credit, the employer must be a corporation, limited liability company, partnership, or similar entity with fewer than 50 employees that has adopted an HRA instead of a traditional employer-provided health insurance plan, and must maintain at least the same level of benefits as the previous year or contribute the same amount per employee as they did for health insurance in the prior year. The credit is $400 per covered employee in the first taxable year the credit is claimed and $200 per covered employee in the second taxable year. This credit cannot reduce the employer's tax liability to less than zero, and any excess credit can be carried forward for up to five years to offset future tax liabilities, with older credits being applied first. The bill takes effect immediately upon becoming law.