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).)
