WeVote
Log In

Bill

Bill

HB 5747

INC TX-CHILD WAIVER

104th Regular Session Introduced by Marty McLaughlin

HB5747 would waive Illinois state income tax for eligible new parents for the birth/adoption year plus the next two years (three-year window).

Referred to Rules Committee
0
WeVote Research Nonpartisan
Bill Summary · HB 5747

Summary of HB5747 (104th Illinois General Assembly)

Overview

  • Bill: HB5747
  • Session: 104th (Illinois)
  • Introduced: April 21, 2026
  • Sponsor: Representative Martin (Marty) McLaughlin
  • Jurisdiction: Illinois
  • Topic: Income tax; creation of a “parent income tax waiver” program

Purpose and Intent

HB5747 establishes a waiver program under the Illinois Income Tax Act that allows qualifying Illinois residents who become parents (by birth or adoption) to have their state income tax liability waived for the year the child is born or the adoption is finalized, plus the two subsequent tax years (three-year total). The waiver is available for both spouses filing jointly and may be renewed across up to three taxable years, provided eligibility conditions are met.

Key Provisions and Changes

Section 202 – Net Income Definition (as amended)

  • If a taxpayer has a waiver granted under Section 253, the taxpayer’s net income for the applicable tax year(s) shall be zero for each taxable year the waiver is in effect.

New Section 253 – Parent Income Tax Waiver

  • Eligibility:
    • The taxpayer must be an Illinois resident.
    • The taxpayer must be legally domiciled in the United States.
    • On or after July 1, 2027, the taxpayer must become a parent (birth or adoption of a child).
  • Waiver Scope:
    • Available for the taxable year in which the child is born or the adoption is finalized, and for the next two taxable years (three-year window in total).
    • If filing jointly, the waiver is granted to both spouses.
  • Continuation of Eligibility:
    • The waiver can be claimed for up to three taxable years, subject to:
    • Continued Illinois residency for the entire year(s) in which the waiver is claimed.
    • Continued US domicile for the entire year(s) in which the waiver is claimed.
    • The child must be a qualifying child of the taxpayer as defined by Section 152 of the Internal Revenue Code for the year(s) the waiver is claimed.
  • Penalties and Revocation:
    • If the Department determines the waiver was improperly granted, penalties may be assessed, and the waiver can be revoked per Department rules.
  • Monitoring and Reporting:
    • The Department, in cooperation with the Commission on Government Forecasting and Accountability, must annually review the program’s impact (family retention, birth/adoption trends, and fiscal effects).
    • Required reporting to the Governor and General Assembly by December 31, 2027, and annually thereafter.
  • Rulemaking:
    • The Department must adopt implementing rules for the program.
  • Tax Exemption Status:
    • This section is exempt from the provisions of Section 250 (likely pertaining to certain procedural constraints or protections).

Who Is Affected

Primary Beneficiaries

  • Illinois residents who become parents (birth or adoption) on or after July 1, 2027.
  • Taxpayers who plan to file (or already file) as residents and meet domicile and qualifying child criteria.
  • Spouses filing jointly will both receive the waiver if eligible.

Indirect Effects

  • State tax liability for eligible families could be reduced to zero for the three-year window.
  • Potential effects on Illinois tax revenues and budget planning, to be analyzed in annual program reviews.

Procedural and Timeline Aspects

  • Effective date for eligibility: On or after July 1, 2027.
  • Duration of waiver: For the birth/adoption year and the following two tax years (three-year period).
  • Annual review: Requires reporting by December 31, 2027, and annually thereafter.
  • Rules: Department of Revenue to adopt implementing rules.
  • Penalties: Possible penalties and revocation for improper granting of waivers.

Notes

  • The bill is introduced and pending assignment to committees; it reflects a targeted tax relief mechanism tied to family growth.
  • The program would be exempt from certain standard statutory provisions (Section 250), indicating special treatment within the act.

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

Sign in to ask a question.