Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart V - EMPLOYER'S RETURN AND PAYMENT OF TAX WITHHELD › Section 100.7380 - Economic Development for a Growing Economy (EDGE) and Small Business Job Creation Credit (IITA Section 704A(g) and (h))

Current through Register Vol. 48, No. 28, July 12, 2024
a) EDGE Credit. An eligible taxpayer who
				makes an election under this subsection (a) shall be allowed a credit against
				payments required under IITA Section 704A equal to the
credits not
				previously claimed and allowed to be carried forward under IITA Section 211(4)
				as provided in Section 5-15(f) of the Economic Development for a Growing
				Economy Tax Credit Act
(EDGETCA)
.
(IITA Section
				704A(g)) A taxpayer may make an election under this subsection (a) for taxable
				years ending on and after December 31, 2009. Only an eligible taxpayer, as
				defined in subsection (a)(2), may make the election.
1) Effect of Election. When an election under
				this subsection (a) is made, the amount of the credit awarded to the taxpayer
				under EDGETCA Section 5-15 for the taxable year of the election shall be
				allowed as a credit against payments due under IITA Section 704A for the first
				quarterly reporting period beginning after the end of the quarterly reporting
				period
in which the credit is awarded
. (See EDGETCA Section
				5-15(f)(2).) No credit awarded in a taxable year for which the election is made
				shall be allowed under IITA Section 211.
EXAMPLE: Taxpayer is an eligible taxpayer and makes the
				  election under this subsection (a)(1) for its taxable year ending June 30,
				  2023. For its taxable year ending June 30, 2023, Taxpayer is awarded a credit
				  under IITA Section 211 of $10,000. In addition, Taxpayer has credit carryovers
				  under Section 211(4) of $5000 from 2021, and $7000 from 2022. Under Section
				  704A(g) and this subsection (a)(1), Taxpayer is allowed a credit of $10,000
				  against withholding payments due under IITA 704A(c) in its first quarterly
				  reporting period that begins after the end of the quarterly reporting period in
				  which the credit certificate is awarded to the Taxpayer. Taxpayer may not claim
				  a credit against the tax imposed under IITA Section 201(a) and (b) for its
				  taxable year ending June 30, 2023, for the $10,000 credit awarded in that
				  taxable year, but may claim a credit for the amounts carried forward from 2021
				  and 2022.
2) Eligible
				Taxpayer Defined. The term "eligible taxpayer" means, with respect to the
				taxable year for which the election under this subsection (a) is otherwise
				available:
A) A taxpayer who is primarily
				engaged (more than 50%) in one of the following business activities:
water purification and treatment, motor vehicle metal stamping,
				automobile manufacturing, automobile and light duty motor vehicle
				manufacturing, motor vehicle manufacturing, light truck and utility vehicle
				manufacturing, heavy duty truck manufacturing, motor vehicle body
				manufacturing, cable television infrastructure design or manufacturing, or
				wireless telecommunication or computing terminal device design or manufacturing
				for use on public networks
(EDGETCA Section 5-15(f)(1)) and the
				taxpayer meets one of the following requirements:
i)
the taxpayer has an Illinois net
				loss or net loss deduction under IITA Section 207 for the taxable year,
				employed no less than 1,000 full-time employees (as defined in
				35 ILCS
				10/5-5) in Illinois on each day of the taxable year,
				has an "Agreement" (as defined in
				35 ILCS
				10/5-5) in effect as of December 14, 2009, and is in
				compliance with all provisions of that Agreement
(see EDGETCA Section
				5-15(f)(1)(A));
ii)
the
				taxpayer has an Illinois net loss or net loss deduction under IITA Section 207
				for the taxable year, employed no less than 1,000 full time employees (as
				defined in 35 ILCS 10/5-5) in Illinois on
				each day of the taxable year, applied for the "Agreement" (as defined in
				35 ILCS
				10/5-5) resulting in the credit with respect to which
				the election is made within 365 days after December 14, 2009
(EDGETCA
				Section 5-15(f)(1)(B));
iii)
the taxpayer had an Illinois net operating loss carryforward under IITA
				Section 207 in a taxable year ending during calendar year 2008, has applied for
				an "Agreement" (as defined in
				35 ILCS
				10/5-5) by November 1, 2010 (150 days after the June
				4, 2010 effective date of Public Act 96-905), creates at least 400 new jobs in
				Illinois, retains at least 2,000 jobs in Illinois that would have been at risk
				of relocation out of Illinois over a 10-year period, and makes a capital
				investment of at least $75,000,000
(EDGETCA Section
				5-15(f)(1)(C));
iv)
the
				taxpayer has an Illinois net operating loss carryforward under IITA Section 207
				in a taxable year ending during calendar year 2009, has applied for an
				"Agreement" (as defined in
				35 ILCS
				10/5-5) by August 1, 2011 (150 days after the March 4,
				2011 effective date of Public Act 96-1534), creates at least 150 new jobs,
				retains at least 1,000 jobs in Illinois that would have been at risk of
				relocation out of Illinois over a 10-year period, and makes a capital
				investment of at least $57,000,000
(EDGETCA Section 5-15(f)(1)(D));
				or
v)
the taxpayer employed
				at least 2,500 full-time employees in the State during the year in which the
				credit is awarded, commits to make at least $500,000,000 in combined capital
				improvements and project costs under the Agreement, applies for an Agreement
				between January 1, 2011 and June 30, 2011, executes an "Agreement" (as defined
				in 35 ILCS
				10/5-5) for the credit during calendar year 2011, and
				was incorporated no more than 5 years before the filing of an application for
				the Agreement.
(EDGETCA Section 5-15(f)(1)(E)); or
B)
A taxpayer whose "Agreement" (as
				defined in 35 ILCS 10/5-5) was executed
				between January 1, 2011 and June 30, 2011 and who is primarily engaged in the
				manufacture of inner tubes or tires, or both, from natural and synthetic
				rubber, employs a minimum of 2,400 full-time employees in Illinois at the time
				of application, creates at least 350 full-time jobs and retains at least 250
				full-time jobs in Illinois that would have been at risk of being created or
				retained outside of Illinois, and makes a capital investment of at least
				$200,000,000 at the project location
(EDGETCA Section
				5-15(f)(1.5)); or
C)
A taxpayer whose "Agreement" (as
				defined in 35 ILCS 10/5-5) was executed by
				May 14, 2012 (150 days after the December 16, 2011 effective date of Public Act
				97-636), and who is primarily engaged in the operation of a discount department
				store, maintains its corporate headquarters in Illinois, employs a minimum of
				4,250 full-time employees at its corporate headquarters in Illinois at the time
				of application, retains at least 4,250 full-time jobs in Illinois that would
				have been at risk of being relocated outside of Illinois, had a minimum of
				$40,000,000,000 in total revenue in 2010, and makes a capital investment of at
				least $300,000,000 at the project location
(EDGETCA Section
				5-15(f)(1.6)); or
D)
A taxpayer whose "Agreement" (as
				defined in 35 ILCS 10/5-5) was executed or
				applied for on or after July 1, 2011 and on or before March 31, 2012, and who
				is primarily engaged in the manufacture of original and aftermarket filtration
				parts and products for automobiles, motor vehicles, light duty motor vehicles,
				light trucks and utility vehicles, and heavy duty trucks, employs a minimum of
				1,000 full-time employees in Illinois at the time of application, creates at
				least 250 full-time jobs in Illinois, relocates its corporate headquarters to
				Illinois from another state, and makes a capital investment of at least
				$4,000,000 at the project location
(EDGETCA Section
				5-15(f)(1.7)); or
E)
A startup taxpayer whose
				"Agreement" (as defined in
				35 ILCS
				10/5-5) was executed on or after
April 19,
				2022
(the effective date of Public Act 102-0700). Any election under
				this
subsection
shall be effective unless and until such
				startup taxpayer has any Illinois income tax liability. Any election under
				this
subsection
shall automatically terminate when the startup
				taxpayer has any Illinois income tax liability at the end of any taxable year
				during the term of the Agreement. Thereafter, the startup taxpayer may receive
				an
income tax
credit
under IITA Section 211 (see
				Section 100.2198),
taking into
				account any benefits previously enjoyed or received by way of the election
				under this
subsection
, so long as the startup taxpayer remains
				in compliance with the terms and conditions of the Agreement
(EDGETCA
				Section 5-15(f)(1.8)). "Startup taxpayer"shall
				have the same meaning as defined in the EDGETCA.
EXAMPLE: Taxpayer is an eligible startup taxpayer and makes
				  the election under subsection (a)(1) for its taxable year ending December 31,
				  2024. The startup taxpayer was allowed a credit against withholding payments
				  due for each quarter in 2024. At the end of 2024, the startup taxpayer
				  determined it will have an Illinois income tax liability for that taxable year.
				  The election will automatically terminate on December 31, 2024 - the end of the
				  startup taxpayer's taxable year. No credits against withholding payments due
				  under IITA 704A(c) will be permitted for this startup taxpayer beginning with
				  the first withholding quarter of 2025. The startup taxpayer may be eligible to
				  claim an income tax credit under IITA Section 211 for its taxable year ending
				  December 31, 2025, for any credits awarded in 2025.
3) Manner of Making Election.
The
				election shall be made in the form and manner required by the Department and,
				once made, shall be irrevocable
(EDGETCA Section 5-15(f)(3)). The
				election shall be made by claiming the credit on the withholding return due
				under IITA Section 704A for the first quarterly reporting period of the
				calendar year beginning after the end of the quarterly reporting period
in which the credit is
awarded (EDGETCA Section 5-15(f)(2)).
				The election applies to the entire credit awarded for the taxable year under
				IITA Section 211.
4) Partnerships
				and S Corporations. A partnership or Subchapter S corporation may be an
				eligible taxpayer and make an election under this subsection (a). When a
				partnership or S corporation makes an election under this subsection (a), no
				credit shall pass through to the partners or shareholders for the taxable year
				under IITA Section 211.
5)
The credit or credits may not reduce the taxpayer's obligation for any
				payment due under IITA Section 704A to less than zero. If the amount of the
				credit or credits exceeds the total payments due under Section 704A with
				respect to amounts withheld during the calendar year, the excess may be carried
				forward and applied against the taxpayer's liability under Section 704A in the
				5 succeeding calendar years, as allowed to be carried forward under IITA
				Section 211(4),
or until it has been fully utilized, whichever occurs
				first
. The credit or credits shall be applied to the earliest year for
				which there is a tax liability. If there are credits from more than one taxable
				year that are available to offset a liability, the earlier credit shall be
				applied first.
(IITA Section 704A(g))
EXAMPLE: Taxpayer is an eligible taxpayer and makes an
				  election under this subsection (a) for its taxable year ending June 30, 2023.
				  For its taxable year ending June 30, 2023, Taxpayer is awarded a credit
				  certificate under IITA Section 211 of $10,000 during its withholding quarterly
				  reporting period ending June 30, 2023. Under Section 704A(g) and this
				  subsection (a)(5), Taxpayer is allowed a credit of $10,000 against withholding
				  payments due under IITA 704A(c) in its quarterly reporting period ending
				  September 30, 2023. Taxpayer withheld tax during its withholding quarter ending
				  September 30, 2023 of $4,000. Under Section 704(A)(g) and this subsection
				  (a)(5), Taxpayer's credit may not exceed $4,000. Taxpayer is allowed to carry
				  forward the $6,000 excess credit to the 5 succeeding calendar years.
6) No credit shall be allowed
				under IITA Section 704A(g) and this subsection with respect to any amount that
				would be disallowed as a credit under IITA Section 211(5) due to a
				Noncompliance Date. (See Section
				100.2198(d).)
7)
No credit awarded under
				the
EDGETCA
for agreements entered into on or after January 1,
				2015
, except for credits awarded pursuant to Agreements entered into
				by a startup taxpayer on or after April 19, 2022, under EDGETCA Section
				5-15(f)(1.8),
may be credited against payments due under this
				Section.
(IITA Section 704A(g))