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SB 3788

INC TX-CHILD CARE

104th Regular Session Introduced by Darby Hills and 3 co-sponsors

Illinois would create a refundable personal income tax credit equal to 25% of the federal Child Tax Credit for each qualifying child, starting in 2026.

Added as Co-Sponsor Sen. Dave Syverson
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Bill Summary · SB 3788

Summary of SB 3788 (104th General Assembly, Illinois)

Title

INC TX-CHILD CARE

Purpose and intent

SB 3788 proposes to create a new Illinois tax credit to help offset child care costs. The credit is designed to provide Illinois resident taxpayers with a direct reduction in their state income tax, by mirroring a portion of the federal Child Tax Credit for each qualifying child. The intention is to support families with children under the federal definition of a qualifying child.

Key provisions and changes

  • New tax credit: Adds a new Section 246 to the Illinois Income Tax Act creating the “Child care credit.”
  • Credit amount: The credit equals 25% of the federal tax credit allowed for each qualifying child for the tax year.
    • The credit is available for taxable years beginning on or after January 1, 2026.
  • Eligibility and calculation:
    • A qualified individual taxpayer is a taxpayer who can claim one or more qualifying children as dependents and whose federal adjusted gross income (AGI) does not exceed the threshold amount defined in Section 24 of the Internal Revenue Code (i.e., similar to federal eligibility rules).
    • A qualifying child is a child who is 13 years old or younger and can be claimed as a dependent on the federal return.
    • For nonresidents or part-year residents, the Illinois credit amount is proportional to the portion of income attributable to Illinois.
  • Refundability:
    • If the credit exceeds the taxpayer’s Illinois income tax liability for the year, the excess credit is refundable (i.e., can be paid to the taxpayer).
    • The refunded credit is not counted as income or resources for determining eligibility or benefit levels in means-tested programs administered by a governmental entity, unless required by federal law.
  • Interaction with other rules:
    • The new credit is exempt from the provisions of Section 14250 (a procedural note about the act’s interaction with other tax provisions).
  • Effective date: The act takes effect immediately upon becoming law.

Who would be affected

  • Eligible Illinois resident taxpayers who have qualifying children (as defined by federal rules) and meet the applicable income threshold would receive the state credit.
  • Nonresidents/part-year residents would receive a prorated credit based on the portion of income earned in Illinois.
  • Households with qualifying children 13 years or younger could claim the credit equal to 25% of their federal qualifying child credit.

Procedural and timeline aspects

  • Introduced: February 5, 2026
  • Assigned to committees: Revenue (February 24, 2026)
  • Committee deadlines: Rule 2-10 deadline set for April 24, 2026; third reading deadline established for May 15, 2026
  • Next steps: As a introduced bill, it would require passage by both chambers of the Illinois General Assembly and the governor’s signature to become law.

Summary statement

SB 3788 would create a new Illinois personal income tax credit (Child care credit) equal to 25% of the federal Child Tax Credit for each qualifying child, for tax years beginning after December 31, 2025. The credit is refundable and targeted to taxpayers with qualifying children within federal income limits. Nonresident and part-year resident taxpayers would receive a prorated credit. The measure aims to provide financial relief to Illinois families with children by aligning a portion of the state tax benefit with the federal framework.

Compiled from official sources — confirm details with the bill’s official record.

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