HB2732 amends the Illinois Income Tax Act to increase the maximum instructional materials and supplies tax credit for eligible educators. Under current law, the credit is capped at $500 per taxable year for qualifying teachers, instructors, counselors, principals, and aides who work at least 900 hours in a school year at an Illinois public or non-public school. The bill would change that cap to $500 for each semester in the taxable year, beginning with taxable years on or after January 1, 2026.
The bill keeps the underlying structure of the credit intact: taxpayers may claim the lesser of their actual out-of-pocket spending on classroom materials or the maximum credit amount, and unused credit may still be carried forward for up to five years. It also leaves in place the existing definitions of instructional materials, supplies, and qualified school, and the credit remains exempt from Section 250 of the Income Tax Act. The bill is effective immediately, though the new semester-based cap would apply only to future taxable years starting in 2026.
Impact
HB2732 would amend Section 225 of the Illinois Income Tax Act by increasing the potential value of the educator instructional materials and supplies credit for future tax years. Instead of a single annual maximum of $500, eligible taxpayers could claim up to $500 per semester, which could increase the annual credit available to teachers and other qualifying school staff who incur classroom supply expenses. The change would affect both public and non-public school educators in Illinois and could reduce state income tax revenue to the extent that more credit is claimed.
Sentiment
The bill appears to be positively oriented toward educators, with the caption and substance suggesting support for helping teachers offset classroom supply costs. No committee transcript or vote record was provided, so there is no documented debate or recorded opposition in the materials available. Based on the bill text alone, the measure reads as a targeted tax benefit for school personnel rather than a controversial policy change.
Contention
The main policy issue is fiscal: increasing the credit from an annual cap to a per-semester cap would expand the tax benefit and potentially lower state revenue. Any concern would likely come from lawmakers focused on budget impact or from those questioning whether the higher cap is necessary given the existing $500 annual credit. On the other hand, supporters would likely emphasize out-of-pocket costs borne by educators and the desire to better reimburse classroom spending. No specific objections or amendments are reflected in the provided record.