Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart B - CREDITS › Section 100.2150 - Training Expense Credit (IITA 201(j))

Current through Register Vol. 48, No. 28, July 12, 2024
a) Beginning with tax years ending on or
				after December 31, 1986 and prior to December 31, 2003, a taxpayer shall be
				allowed a credit against the tax imposed by IITA Sections 201(a) and (b) for
				all amounts paid or accrued, on behalf of all persons employed by the taxpayer
				in Illinois, or Illinois residents employed outside of Illinois by a taxpayer,
				for educational or vocational training in semi-technical or technical fields or
				semi-skilled or skilled fields, which were deducted from gross income in the
				computation of taxable income (IITA Section 201(j)).
b) The credit against the tax imposed by IITA
				Sections 201(a) and (b) shall be 1.6 % of eligible training expenses (IITA
				Section 201(j)).
c) All amounts
				paid for educational or vocational training in semi-technical or technical
				fields or semi-skilled or skilled fields are eligible for the credit. No
				particular fields of employment are presumptively eligible or ineligible for
				the credit.
1) The Training Expense Credit
				was originally enacted into law as a training expense deduction by P.A. 83-650,
				the Prairie State 2000 Authority Act, and was later converted into the current
				Training Expense Credit by P.A. 84-1405. The Illinois General Assembly found
				that there existed a large surplus of workers throughout the State who are
				ready, willing and able to work but who lack the appropriate skills to perform
				the specialized tasks for modern business and industry....The General Assembly
				found that a substantial impediment to attracting new businesses and
				encouraging the modernization of existing businesses has been the shortage of
				workers who can perform the specialized tasks required by the new technologies
				of modern business. [20 ILCS 4020/2
				]
2) The credit is for the amounts
				paid or accrued for educational or vocational training in semi-technical or
				technical or semi-skilled or skilled fields.
A) The terms "semi-technical or technical
				fields or semi-skilled or skilled fields" do not refer to any particular
				occupation. This statutory language authorizes the credit for the costs of
				training of an employee to improve that employee's job skills within the scope
				of his or her employment.
B) The
				credit will be authorized for the costs of job-linked training that offers
				special skills for career advancement or that is preparatory for, and leads to,
				a job with definite career potential.
C) The credit will be authorized for amounts
				expended for training necessary to implement Total Quality Management or
				improvement systems within the workplace.
D) The credit will be authorized for training
				related to machinery or equipment.
E) The credit will be authorized for
				job-linked basic skills, which may include English as a second language and
				remedial training, necessary for employees to function effectively and safely
				in the workplace, or as a prerequisite for other training.
EXAMPLES: Training of a machine operator in skills necessary
				  to operate a computer-assisted manufacturing machine would qualify for the
				  credit. Training of the employees of a retailer in the operation of a cash
				  register system that is designed to aid the retailer by resulting in faster
				  sales and greater inventory control because of centralized linkage of the
				  system to the retailer's headquarters would, assuming all other requirements
				  are met, qualify for the credit. A course in how to supervise employees
				  required of supervisors because of the installation of a computer system at the
				  business with terminals in the homes of that supervisor's subordinates that
				  allows those subordinates to work from their homes would qualify for the
				  credit.
F) Training does
				not have to occur in a classroom. Training may be given by an employer to his
				or her employees, an employer may contract with a third party to provide the
				training, or an employer may reimburse an employee for the costs of training
				purchased by an employee. Eligible training may include self-study courses.
				Self-study courses will qualify if the employer demonstrates that the
				self-study coursework is training in semi-technical or technical or
				semi-skilled or skilled fields. Self-study training must be contrasted with the
				type "down time" reading which, as stated in subsection (d)(2)(B), below, does
				not qualify for the credit.
G)
				Training does not have to occur on the premises of the employer. Training does
				not have to occur in the State of Illinois. However, in order to claim costs of
				employee travel and lodging, an employer must document that the costs of travel
				were related to the training and were deducted in determining the employer's
				federal taxable income.
H) A
				training expense that would otherwise not qualify for the credit will not be
				deemed to qualify for the credit because of a designation of an employee as a
				probationary employee, a trainee, or a similar designation of that
				nature.