86 Ill. Adm. Code 100.2199 — Illinois Earned Income Tax Credit (IITA Section 212)

# Illinois Earned Income Tax Credit (IITA Section 212)

TITLE 86: REVENUE CHAPTER I: DEPARTMENT OF REVENUE PART 100 INCOME TAX SECTION 100.2199 ILLINOIS EARNED INCOME TAX CREDIT (IITA SECTION 212)

Section 100.2199 Illinois Earned Income Tax Credit (IITA Section 212)

a) With respect to the federal earned income tax credit allowed for the taxable year under Section 32 of the federal Internal Revenue Code, each individual taxpayer shall be allowed a credit against the tax imposed by IITA Section 201(a) and (b). (IITA Section 212(a)) The amount of the credit allowed shall be equal to:

1) 5% of the federal tax credit for each taxable year beginning on or after January 1, 2000 and ending prior to December 31, 2012;

2) 7.5% of the federal tax credit for each taxable year beginning on or after January 1, 2012 and ending prior to December 31, 2013;

3) 10% of the federal tax credit for each taxable year beginning on or after January 1, 2013 and beginning prior to January 1, 2017;

4) 14% of the federal tax credit for each taxable year beginning on or after January 1, 2017 and beginning prior to January 1, 2018;

5) 18% of the federal tax credit for each taxable year beginning on or after January 1, 2018 and beginning prior to January 1, 2023; and 6) 20% of the federal tax credit for each taxable year beginning on or after January 1, 2023. (IITA Section 212(a))

b) Credit in Excess of Liability 1) For tax years beginning before January 1, 2003, the credit allowed for the taxable year may not reduce the taxpayer's liability under the IITA to less than zero. Therefore, no part of the credit is refundable in the event the tax liability of the taxpayer is reduced to zero. (IITA Section 212(b))

2) For tax years beginning on or after January 1, 2003 and ending prior to August 21, 2007 (the effective date of PA 95-333), if the amount of the credit exceeds the income tax liability for the applicable tax year, then the excess credit shall be refunded to the taxpayer. (IITA Section 212(b))

3) For tax years ending on or after August 21, 2007, if the amount of the credit exceeds the income tax liability for the applicable tax year, then the excess credit shall be refunded to the taxpayer. (IITA Section 212(b))

4) Excess credit may not be carried over to other tax years.

c) In the case of a nonresident or part-year resident, the Illinois earned income tax credit shall be equal to the applicable fraction under subsection (a) of that portion of the federal earned income tax credit allowed pursuant to Section 32 of the federal Internal Revenue Code that bears the same ratio as the taxpayer's base income allocable to Illinois bears to the taxpayer's base income everywhere. (See IITA Section 212(a))

d) For taxable years beginning on or after January 1, 2023, each individual taxpayer who has attained the age of 18 during the taxable year but has not yet attained the age of 25 is entitled to the credit under subsection (a) based on the federal tax credit for which the taxpayer would have been eligible without regard to any age requirements that would otherwise apply to individuals without a qualifying child in Section 32(c)(1)(A)(ii) of the federal Internal Revenue Code. (IITA Section 212(b-5)) Taxpayers will need to complete a pro forma U.S. Form 1040, Line 27 as if they had a qualifying child in order to compute the allowable amount of federal tax credit.

e) For taxable years beginning on or after January 1, 2023, each individual taxpayer who has attained the age of 65 during the taxable year is entitled to the credit under subsection (a) based on the federal tax credit for which the taxpayer would have been eligible without regard to any age requirements that would otherwise apply to individuals without a qualifying child in Section 32(c)(1)(A)(ii) of the federal Internal Revenue Code. (IITA Section 212(b-10)) Taxpayers will need to complete a pro forma U.S. Form 1040, Line 27 as if they had a qualifying child in order to compute the allowable amount of federal tax credit.

f) For taxable years beginning on or after January 1, 2023, each individual taxpayer filing a return using an individual taxpayer identification number (ITIN) as prescribed under Section 6109 of the Internal Revenue Code, other than a Social Security number issued pursuant to Section 205(c)(2)(A) of the Social Security Act, is entitled to the credit under subsection (a) based on the federal tax credit for which the taxpayer would have been eligible without applying the restrictions regarding Social Security numbers in Section 32(m) of the federal Internal Revenue Code. (IITA Section 212(b-15)) Taxpayers will need to complete a pro forma U.S. Form 1040, Line 27 as if they had a Social Security number in order to compute the allowable amount of federal tax credit. (Source: Amended at 48 Ill. Reg. 1677, effective January 10, 2024)

Section 100.2199 Illinois Earned Income Tax Credit (IITA Section 212)

a) With respect to the federal earned income tax credit allowed for the taxable year under Section 32 of the federal Internal Revenue Code, each individual taxpayer shall be allowed a credit against the tax imposed by IITA Section 201(a) and (b). (IITA Section 212(a)) The amount of the credit allowed shall be equal to:

1) 5% of the federal tax credit for each taxable year beginning on or after January 1, 2000 and ending prior to December 31, 2012;

2) 7.5% of the federal tax credit for each taxable year beginning on or after January 1, 2012 and ending prior to December 31, 2013;

3) 10% of the federal tax credit for each taxable year beginning on or after January 1, 2013 and beginning prior to January 1, 2017;

4) 14% of the federal tax credit for each taxable year beginning on or after January 1, 2017 and beginning prior to January 1, 2018;

5) 18% of the federal tax credit for each taxable year beginning on or after January 1, 2018 and beginning prior to January 1, 2023; and

6) 20% of the federal tax credit for each taxable year beginning on or after January 1, 2023. (IITA Section 212(a))

b) Credit in Excess of Liability

1) For tax years beginning before January 1, 2003, the credit allowed for the taxable year may not reduce the taxpayer's liability under the IITA to less than zero. Therefore, no part of the credit is refundable in the event the tax liability of the taxpayer is reduced to zero. (IITA Section 212(b))

2) For tax years beginning on or after January 1, 2003 and ending prior to August 21, 2007 (the effective date of PA 95-333), if the amount of the credit exceeds the income tax liability for the applicable tax year, then the excess credit shall be refunded to the taxpayer. (IITA Section 212(b))

3) For tax years ending on or after August 21, 2007, if the amount of the credit exceeds the income tax liability for the applicable tax year, then the excess credit shall be refunded to the taxpayer. (IITA Section 212(b))

4) Excess credit may not be carried over to other tax years.

c) In the case of a nonresident or part-year resident, the Illinois earned income tax credit shall be equal to the applicable fraction under subsection (a) of that portion of the federal earned income tax credit allowed pursuant to Section 32 of the federal Internal Revenue Code that bears the same ratio as the taxpayer's base income allocable to Illinois bears to the taxpayer's base income everywhere. (See IITA Section 212(a))

d) For taxable years beginning on or after January 1, 2023, each individual taxpayer who has attained the age of 18 during the taxable year but has not yet attained the age of 25 is entitled to the credit under subsection (a) based on the federal tax credit for which the taxpayer would have been eligible without regard to any age requirements that would otherwise apply to individuals without a qualifying child in Section 32(c)(1)(A)(ii) of the federal Internal Revenue Code. (IITA Section 212(b-5)) Taxpayers will need to complete a pro forma U.S. Form 1040, Line 27 as if they had a qualifying child in order to compute the allowable amount of federal tax credit.

e) For taxable years beginning on or after January 1, 2023, each individual taxpayer who has attained the age of 65 during the taxable year is entitled to the credit under subsection (a) based on the federal tax credit for which the taxpayer would have been eligible without regard to any age requirements that would otherwise apply to individuals without a qualifying child in Section 32(c)(1)(A)(ii) of the federal Internal Revenue Code. (IITA Section 212(b-10)) Taxpayers will need to complete a pro forma U.S. Form 1040, Line 27 as if they had a qualifying child in order to compute the allowable amount of federal tax credit.

f) For taxable years beginning on or after January 1, 2023, each individual taxpayer filing a return using an individual taxpayer identification number (ITIN) as prescribed under Section 6109 of the Internal Revenue Code, other than a Social Security number issued pursuant to Section 205(c)(2)(A) of the Social Security Act, is entitled to the credit under subsection (a) based on the federal tax credit for which the taxpayer would have been eligible without applying the restrictions regarding Social Security numbers in Section 32(m) of the federal Internal Revenue Code. (IITA Section 212(b-15)) Taxpayers will need to complete a pro forma U.S. Form 1040, Line 27 as if they had a Social Security number in order to compute the allowable amount of federal tax credit.

# Source

(Source: Amended at 48 Ill. Reg. 1677, effective January 10, 2024)