Illinois Budget Bill Increases Income Tax Rates
The highlights of the budget bill are as follows:
- Effective July 1, 2017, the individual, trust and estate tax rate is increased from 3.75 percent to 4.95 percent.
- Effective July 1, 2017, the corporate income tax rate is increased from 5.25 percent to 7 percent.
- For tax years that end on or after July 1, 2017, two tax rates apply. The amount earned prior to July 1, 2017, is taxed at 3.75 percent (individuals, trusts and estates) or 5.25 percent (corporations). The amount earned on or after July 1, 2017, is taxed at 4.95 percent (individuals, trusts and estates) or 7 percent (corporations). The two tax amounts must be added together to figure the total tax liability.
- For taxable years ending on or after December 31, 2017, corporate and individual taxpayers must add back an amount equal to the federal deduction taken under IRC §199 - the Qualified Domestic Production Deduction.