(35 ILCS 5/238)
(a) For tax years beginning on or after January 1, 2025, a taxpayer who has entered into an agreement under the Manufacturing Illinois Chips for Real Opportunity (MICRO) Act is entitled to a credit against the taxes imposed under subsections (a) and (b) of Section 201 of this Act in an amount to be determined in the agreement. The taxpayer may elect to claim the credit, on or after January 1, 2026, against its obligation to pay over withholding under Section 704A of this Act as provided in this Section. If the taxpayer is a partnership or Subchapter S corporation, the credit shall be allowed to the partners or shareholders in accordance with the determination of income and distributive share of income under Sections 702 and 704 and subchapter S of the Internal Revenue Code. The Department, in cooperation with the Department of Commerce and Economic Opportunity, shall adopt rules to enforce and administer the provisions of this Section. This Section is exempt from the provisions of Section 250 of this Act.
(b) The credit is subject to the conditions set forth in the agreement and the following limitations:
(1) The tax credit may be in the form of either or
both the MICRO Illinois Credit or the MICRO Construction Jobs Credit and shall not exceed the percentage of incremental income tax and percentage of training costs permitted in that Act and in the agreement with respect to the project.
(2) The amount of the credit allowed during a tax
year plus the sum of all amounts allowed in prior tax years shall not exceed the maximum amount of credit established in the agreement.
(3) The amount of the credit shall be determined on
an annual basis. Except as applied in a carryover year pursuant to paragraph (4), the credit may not be applied against any State income tax liability in more than 15 taxable years.
(4) The credit may not exceed the amount of taxes
imposed pursuant to subsections (a) and (b) of Section 201 of this Act. Any credit that is unused in the year the credit is computed may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit year. The credit shall be applied to the earliest year for which there is a tax liability. If there are credits from more than one tax year that are available to offset a liability, the earlier credit shall be applied first.
(5) No credit shall be allowed with respect to any
agreement for any taxable year ending after the noncompliance date. Upon receiving notification by the Department of Commerce and Economic Opportunity of the noncompliance of a taxpayer with an agreement, the Department shall notify the taxpayer that no credit is allowed with respect to that agreement for any taxable year ending after the noncompliance date, as stated in such notification. If any credit has been allowed with respect to an agreement for a taxable year ending after the noncompliance date for that agreement, any refund paid to the taxpayer for that taxable year shall, to the extent of that credit allowed, be an erroneous refund within the meaning of Section 912 of this Act.
If, during any taxable year, a taxpayer ceases
operations at a project location that is the subject of that agreement with the intent to terminate operations in the State, the tax imposed under subsections (a) and (b) of Section 201 of this Act for such taxable year shall be increased by the amount of any credit allowed under the agreement for that Project location prior to the date the taxpayer ceases operations.
(6) Instead of claiming the credit against the taxes
imposed under subsections (a) and (b) of Section 201 of this Act, with respect to the portion of a MICRO Illinois Credit that is calculated based on the Incremental Income Tax attributable to new employees and retained employees, the taxpayer may elect, in accordance with the Manufacturing Illinois Chips for Real Opportunity (MICRO) Act, to claim the credit, on or after January 1, 2026, against its obligation to pay over withholding under Section 704A of the Illinois Income Tax Act. Any credit for which a taxpayer makes such an election shall not be claimed against the taxes imposed under subsections (a) and (b) of Section 201 of this Act.
(Source: P.A. 102-700, eff. 4-19-22.)