![]() ![]() The CARES Act repealed the federal tax law provision that limited net operating losses to 80% of taxable income and added another provision allowing a 5-year carryback of losses incurred after Decemand before January 1, 2021. These new credits will not be implemented while the state is working to overcome its current fiscal challenges. Companies would be eligible for up to $20 million in credits across these four programs. The state business incentives in PA 101-9 allow companies that already receive tax credits for relocating or expanding in Illinois through the State's Enterprise Zone, River's Edge Redevelopment Zone, Economic Development for a Growing Economy (EDGE), or High Impact Business tax credit programs, to qualify for even more credits based on wages paid to workers for construction associated with that relocation or expansion. I am confident in our ability to grow our economy and put our state on firmer fiscal footing." As we recover from the pandemic, we must focus on job creation and balancing our state budget. ![]() Right now, we cannot afford to expand tax breaks to businesses that already receive tax breaks. "Unfortunately, COVID also hit our state budget, requiring tough choices about what we can and cannot afford. ![]() "My administration recognizes the many challenges facing businesses during this unique time, which is why we are going above and beyond the federal support program by providing hundreds of millions of dollars in support to our small businesses, our best job creators who have been impacted severely by COVID-19," said Governor JB Pritzker. Without decoupling, these federal tax changes could reduce Illinois income tax revenue by more than $500 million. The amendments substantially changed federal tax treatment of net operating losses and excess business losses, automatically causing the same change in Illinois tax treatment. The proposed decoupling would keep the Illinois income tax framework the same as it was before Congress amended the federal income tax law in March 2020 as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act. The new, expanded credits are estimated to cost the state an additional $20 million annually. The expanded state tax credits were authorized in 2019 as part of a series of tax changes contained in PA 101-9 and were scheduled to take effect January 1, 2021. CHICAGO - Due to the budget crisis caused by the ongoing COVID-19 pandemic, Governor JB Pritzker is freezing the implementation of a new set of state business tax credits and calling for a decoupling of Illinois tax law from recently enacted federal business tax changes that would cost Illinois in excess of $500 million. ![]()
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