In this article, we explain the current and expected changes to Illinois Tax Law for 2020. Our Illinois tax lawyers will address:
Illinois enacted its 2019 budget bills on June 5, 2019, resulting in multiple changes to current tax laws in Illinois. Covering all the changes in one article would be overwhelming so we’ve focused on the most important tax changes for Illinois residents and businesses below.
As of January 1, 2021, the corporate income tax will increase from 7% to 7.99%. This will replace the current flat-rate individual income tax with a graduated tax plan. This change is still tentative and will be placed for approval on the November 2020 ballot. Should it pass, non-joint filers and joint filers will pay 4.9% if their non-joint or joint income is between $10,001 and $100,000, compared to the current flat rate of 4.95%.
Senate Bill 1515 will change how income is taxed for Illinois employees. Nonresidents will be taxed on their earnings and wages once they work more than 30 days in Illinois. Illinois residents will be able to exclude other state taxes from their wages, even if their base of operations is in Illinois.
A new statewide parking tax is set to go into effect. This tax will be added in addition to existing local parking taxes. For hourly, daily, or weekly parking, the state tax rate will be 6%. For monthly parking, it will be 9%. But due to several conflicting provisions, it will likely be modified before its effective date of January 1, 2020.
Currently, sales tax applies only to the difference between a trade-in value of a car and its purchase price. New Illinois tax will limit the trade-in sales credit to $10,000, which could end up costing those trading in their vehicles for a newer model.
Over the next five years, the Illinois Franchise Tax will be phased out. Corporations should review the terms closely as there is plenty of fine print to be aware of.
A new income tax credit and sales tax exemption is available to those who invest in Illinois data centers.
Some tax changes in Illinois have already gone into effect while others will be phased in over the next several years. Here are a few other changes to Illinois tax laws to be aware of.
O'Flaherty Law is happy to meet with you by phone or at our office locations in: