Bill
SB 1834
Establishes a Job Creation Zone Pilot in IL near the IN border, offering withholding tax credits to employers for hiring at least 5 new full-time workers in targeted industries.
Status & timeline
- Introduced by Sen. Chapin Rose (bill text notes introduction 2/5/2025; received/filed in early March 2025).
- Referred to multiple committees (Assignments; Agriculture; Appropriations; Health & Human Services).
- The bill would allow credit awards for withholding reporting periods beginning on or after January 1, 2026.
- Legislative history shows the measure was later indefinitely postponed/withdrawn and listed as “died in Agriculture” (mid‑2025). Companion bill: HB 141.
Purpose
- Establish a pilot job-creation program to incentivize employers to add full‑time jobs in targeted industries located inside a specially defined “job creation zone” along Illinois’ eastern border with Indiana. Incentives take the form of credits against employer withholding obligations under the Illinois Income Tax Act.
Job creation zone boundaries
- Begins at the intersection of US‑51 and State Route 9, east to the Indiana state line, south along the Illinois–Indiana border, west along I‑64 to US‑51, and north on US‑51 back to the start.
- Also includes all territory within 15 miles of the north, south, and west borders described above.
Key provisions
- Creates the Job Creation Zone Pilot Program administered by the Department of Commerce and Economic Opportunity (DCEO). DCEO has rulemaking and enforcement authority under the Act.
- Eligible applicants must pledge to hire at least 5 “new employees” at a designated location within the zone. Applications may be by formal letter or application to DCEO. DCEO may deny awards for projects that simply replace the same number (or fewer) of employees at a location that was used by a different employer the prior year.
- “New employee” (as defined) must be a full‑time hire who (a) is first employed by the taxpayer in the project after the taxpayer enters an agreement, (b) receives compensation at least 125% of the State minimum wage (the bill text indicates a 125% wage threshold), and (c) is eligible for employer‑sponsored health insurance and retirement benefits. The definition excludes certain reassignments, transfers from related members, and specified family members with ownership interests. (Note: portions of the bill text are fragmented; the summary captures the bill’s explicit thresholds and eligibility criteria as presented.)
Covered project fields
- Manufacturing, technology, engineering, research, science, energy, mathematics, bioprocessing, and agriculture.
Tax credit mechanics
- Qualified taxpayers issued a certificate by DCEO may claim credits against their withholding obligations (Section 704A of the Illinois Income Tax Act).
- Credit caps per new employee: up to 50% of the incremental income tax withheld attributable to each new employee in the calendar year of hire and the first two calendar years after hire; and up to 25% of that incremental withholding in the third and fourth calendar years after hire. “Incremental income tax” is defined as the additional withholding from compensation of the new employees arising from the project.
Potential impacts
- Intended to stimulate job growth and private investment in the defined zone by lowering employers’ net withholding costs for newly created qualifying jobs.
- Reduced state withholding receipts for participating employers during the credit periods; fiscal impact depends on participation rates and number of qualifying hires.
- Safeguards in the bill aim to reduce simple job-shifting (e.g., disallowing credits where an employer reuses a location and employs the same or fewer workers than a prior employer).
Implementation notes
- DCEO to implement and enforce the program and issue certificates. The bill also makes conforming amendments to the Illinois Income Tax Act and was written to be effective immediately if enacted.
Compiled from official sources — confirm details with the bill’s official record.
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