By Payroll and Entitlements Editorial Staff
For corporate and personal income tax purposes, Illinois Department of Revenue reminds businesses about Minimum Wage Credit that is designed to help small businesses offset the state's minimum wage rate, which gradually increases to $15 an hour over the next six years. Starting January 1, 2020, businesses may claim the credit on their quarterly Illinois withholding income tax returns. Businesses and nonprofits with 50 full-time equivalent employees or less are eligible to offset a portion of the minimum wage increase cost from their withholding income taxes. The maximum credit amount allowed is 25 percent of the difference between the new minimum wage and what each employee was paid previously.
The percentage allowed each proceeding year will decrease before sunsetting in 2026 for most small businesses. Eligible businesses may claim this credit by filing Form IL-941, Illinois Withholding Income Tax Return, and a new schedule. (Press Release, Illinois Department of Revenue, January 3, 2020.)
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