99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
HB5536

 

Introduced , by Rep. John D. Cavaletto

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/224 new

    Amends the Illinois Income Tax Act. Provides that each employer that enters into a profit-sharing agreement with its employees is entitled to a credit in an amount equal to 25% of the distributions made to the employee during the taxable year under the terms of the agreement. Provides that the credit may be carried forward. Provides that the credit is exempt from the Act's automatic sunset provision.


LRB099 18631 HLH 43013 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB5536LRB099 18631 HLH 43013 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Income Tax Act is amended by adding
5Section 224 as follows:
 
6    (35 ILCS 5/224 new)
7    Sec. 224. Profit-sharing program.
8    (a) For taxable years beginning on or after January 1,
92016, each employer that enters into a profit-sharing agreement
10with its employees is entitled to a credit against the tax
11imposed by subsections (a) and (b) of Section 201 in an amount
12equal to 25% of the distributions made to the employee during
13the taxable year under the terms of the agreement. The
14agreement must be in writing, must be certified by the
15Department no later than December 31 of the taxable year, and
16must provide for an employee share of no less than 15% of the
17gross profits.
18    (b) For partners, shareholders of Subchapter S
19corporations, and owners of limited liability companies, if the
20liability company is treated as a partnership for purposes of
21federal and State income taxation, there is allowed a credit
22under this Section to be determined in accordance with the
23determination of income and distributive share of income under

 

 

HB5536- 2 -LRB099 18631 HLH 43013 b

1Sections 702 and 704 and Subchapter S of the Internal Revenue
2Code.
3    (c) The tax credit may not reduce the taxpayer's liability
4to less than zero. If the amount of the tax credit exceeds the
5tax liability for the year, the excess may be carried forward
6and applied to the tax liability of the 5 taxable years
7following the excess credit year. The credit must be applied to
8the earliest year for which there is a tax liability. If there
9are credits from more than one tax year that are available to
10offset a liability, then the earlier credit must be applied
11first.
12    (d) This Section is exempt from the provisions of Section
13250.