Small Business Job Creation Tax Credit

The Small Business Job Creation Tax Credit Act will support small businesses and local communities. This legislation will make a $2,500 tax credit available to small businesses that hire a net new employee.

To qualify for this tax credit, a small business must:

• Have 50 or fewer full-time employees.
• Hire a net employee and maintain that higher rate of employment over a 12-month period.
• Hire an employee that works at least 35 hours per week.

The Small Business Job Creation Tax Credit Act, at $2,500 per net new, full-time employee, would prove more beneficial for Illinois taxpayers than many existing tax credits. For example, a small business that pays a new employee $40,000 generates more than $1,800 in income taxes in the first year alone. The median employee tenure across all U.S. private-sector businesses is 3.5 years.* This means that for a $40,000 employee, the state stands to collect nearly $8,000 in income tax over the typical tenure of a new hire. Even for a $30,000 employee, the state would recover its initial investment within two years. This projection excludes potential increases in other taxes resulting from changes in disposable income.