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SB 3784

INC TX-DONATIONS OF PROPERTY

104th Regular Session Introduced by Darby Hills and 1 co-sponsor

Illinois offers a 100% credit of the donated property's fair market value against income tax for donations to employers using onsite employee child care, starting 2027.

Added as Co-Sponsor Sen. Sally J. Turner
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WeVote Research Nonpartisan
Bill Summary · SB 3784

Summary of SB 3784 (Illinois, 104th General Assembly)

Purpose and intent

  • Establishes an Illinois income tax credit for taxpayers who donate real property (land or buildings) to an employer that will use the property to provide onsite child care for the employer’s employees.
  • The credit equals the fair market value of the donated property, as determined by rules to be issued by the Illinois Department of Revenue.

Key provisions and changes

  • Tax credit mechanics:
    • Taxpayers can claim a credit against their Illinois income tax for the taxable year in which the donation occurs.
    • The credit amount is 100% of the fair market value of the donated real property.
    • The credit applies to the tax imposed under Section 201 (individual and corporate income taxes) but cannot reduce the liability below zero.
    • If the credit exceeds the taxpayer’s liability for the year, the excess can be carried forward to subsequent tax years, applied to the earliest available liability, for up to the following two taxable years (subject to the earliest-year-first rule).
    • For pass-through entities (partners and shareholders of S corporations), the credit treatment aligns with Section 251 (pass-through treatment).
  • Related member restriction:
    • A donation to a “related member” of the taxpayer does not qualify for the credit. A related member is defined with multiple criteria mirroring ownership and control relationships, including:
    • 50% or more ownership by family or related parties of the stockholder.
    • Certain ownership thresholds through partnerships, estates, trusts, or corporations and their related parties.
    • Stock attribution rules under Internal Revenue Code Section 318 (with an adjusted 20% vs 5% threshold in some contexts).
  • Definition of eligible donation:
    • The donor must donate real property that the recipient employer will use to provide onsite child care for the employer’s employees.
    • The donation must occur in taxable years beginning on or after January 1, 2027.
  • Administration and rules:
    • The Department of Revenue will determine fair market value of the donated property and adopt the necessary rules to implement the credit.

Who/what would be affected

  • Eligible: Illinois taxpayers who own real property and donate it to an employer that will use it for onsite employee child care.
  • Non-eligible: Donations to related members (as defined by the bill) do not qualify for the credit.
  • Employers that receive donated property could benefit by reducing their operating costs related to employee child care, potentially expanding or improving onsite child care services.

Procedural and timeline aspects

  • Effective date: Taxable years starting on or after January 1, 2027.
  • Interaction with existing credits: The new credit is claimed against the individual or corporate income tax under the Illinois Income Tax Act; it operates with standard carryforward provisions and earliest-year-first application if multiple credits exist.
  • Administration: Valuation rules for fair market value and other implementation details will be established by the Illinois Department of Revenue.

Additional notes

  • The bill includes sponsor information: Sen. Darby A. Hills (primary) with co-sponsors Sen. Sally J. Turner and Sen. Darby A. Hills listed more than once as sponsor, reflecting engagement in sponsorship.
  • The text specifies the credit’s relationship to partner and S-corporation tax treatment, ensuring consistency with existing Illinois tax structure for pass-through entities.

This summary covers the bill’s core mechanism, eligibility, and key limitations to aid understanding of its potential impact on taxpayers and employer-provided onsite child care initiatives.

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

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