SB1993 would amend the Illinois Income Tax Act to create a new income tax credit for employers that make matching contributions to an employee’s ABLE account. The credit would equal 25% of the employer’s matching contribution, capped at $500 per contributing employee per taxable year, and would apply to taxable years ending on or after December 31, 2025 and before January 1, 2031. The bill also allows pass-through owners, including partners and S corporation shareholders, to claim the credit through existing apportionment rules.
The credit could not be carried back and could not reduce a taxpayer’s liability below zero, but unused amounts could be carried forward for up to five taxable years. Taxpayers claiming the credit would need to keep records required by the State Treasurer or Department of Revenue. The bill takes effect immediately upon enactment.
Impact
The bill would add a new Section 246 to the Illinois Income Tax Act, creating a targeted corporate and individual income tax incentive tied to employer support for ABLE accounts under the State Treasurer Act. It would reduce state income tax revenue to the extent taxpayers claim the credit, while encouraging private matching contributions to savings accounts for individuals with disabilities. The measure affects employers making these contributions, as well as partners and S corporation shareholders who pass the credit through under existing tax rules.
Sentiment
The available record shows no committee transcript, vote history, or recorded opposition, so there is no documented debate to gauge broad sentiment. Based on the bill text and caption, the measure appears to be a supportive, incentive-based proposal aimed at encouraging ABLE account contributions, with an emphasis on disability-related savings and tax relief for participating employers.
Contention
No specific points of contention are documented in the provided materials. Potential areas of policy debate, based on the bill’s structure, could include the revenue cost of the credit, whether the $500-per-employee cap is sufficient to influence employer behavior, and whether the tax incentive is the best mechanism for promoting ABLE account participation. However, no named stakeholders or objections appear in the record provided.