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Incentives and Tax Credits

Illinois Expands Business Incentives in 2023

In early 2023, the State of Illinois greatly expanded business incentives in order to attract and retain job creators looking to locate or expand their business in Illinois. New changes include:

  • $400 Million Closing Fund: Discretionary cash assistance available for major job creators with significant investments through the Invest in Illinois Fund.
  • Expanding and improving Illinois’ premier incentive programs, including:
    • Reimagining Energy and Vehicles (REV Illinois)
    • Economic Development for a Growing Economy (EDGE)
    • Manufacturing Illinois Chips for Real Opportunity (MICRO)
    • High Impact Businesses (HIB)
    • Enterprise Zone Expansion

 

Description 2023 Improvements
Invest in Illinois Fund
New competitive and flexible closing fund   Established the Invest in Illinois Fund to offer closing funds to high priority projects. 
Reimagining Energy and Vehicles (REV Illinois)
Smaller companies now eligible  Expanded REV eligibility to smaller, critical businesses in the EV supply chain space (minimum $2.5M capital investment). 
More clean energy sectors eligible  Manufacturers of solar, renewables, and energy storage components are now eligible for REV.
Increased tax benefits for retained employees Increased the value of the tax credits for retained jobs:
  • Underserved Areas: Increased from 50% to 100%
  • Other Areas: Increased from 25% to 75% 
More years of REV benefits  Companies can now apply to renew their REV agreement for one additional term, doubling the number of years they can receive benefits.
  • REV Tier 1 benefits for a total of 20 years
  • REV Tier 2 benefits for a total of 30 years 
Manufacturing Illinois Chips for Real Opportunity (MICRO)
Increased tax benefits for retained employees Increased the value of the tax credits for retained jobs:
  • Underserved Areas:  Increased from 50% to 100%
  • Other Areas: Increased from 25% to 75%
EDGE
Removed administrative burden requiring companies to provide an “out of state” option

Prior Policy: Companies were required to complete an in-depth analysis demonstrating they had a competing “out of state” option and that they would not locate or expand in Illinois if it weren’t for the EDGE credit (called “but for”).

2023 Improvement: Companies may attest to their need for EDGE incentives without submitting a burdensome comparative analysis.
Increased tax benefits for retained employees Increased credits for retained employees from 25% to 50% for companies located in underserved areas.
High Impact Businesses (HIB)
Removed administrative burden requiring companies to provide an “out of state” option

Prior Policy: Companies were required to complete an onerous process to demonstrate they would not locate or expand in Illinois if it weren’t for the HIB credit (called “but for”).

2023 Improvement: Companies will now submit an attestation. 
More years of HIB benefits Enacted a renewal clause to allow HIB designees to extend their agreement for one additional term.
Enterprise Zone (EZ) Expansion
Expanding Enterprise Zones Increased the maximum size of existing Enterprise Zones to make communities more competitive for new businesses.

Illinois offers tax-based incentives to help your business create jobs and invest in Illinois. For an overview of our programs and to discuss your options, contact us at https://dceo.illinois.gov/dceo-program-inquiry.html.

Information on Incentives and Programs

Manufacturing Illinois Chips for Real Opportunity Act (MICRO)

The Manufacturing Illinois Chips for Real Opportunity Act (MICRO) provides incentives for manufacturers of microchips and semiconductors as well as component parts manufacturers in this high-tech sector.
Reimagining Energy and Vehicles Program

The REV Program provides manufacturers of electric vehicles (EV), EV component parts, and EV power supply equipment manufacturers with incentives for qualifying Illinois manufacturers
Illinois Angel Investment Credit Program

The Illinois Angel Investment Tax Credit Program encourages investment in innovative, early-stage companies to help companies obtain working capital needed to grow in Illinois
Economic Development for a Growing Economy Tax Credit Program (EDGE)

The EDGE Program provides annual corporate tax credits to qualifying businesses to help create jobs, investment and training programs in Illinois
EDGE for Startups

The EDGE for Startups Program provides annual withholding tax credit to newly formed businesses to help create jobs, investment and training programs in Illinois
Data Centers Investment Program

The Data Centers Investment Program provides owners and operators with exemptions from a variety of state and local taxes for qualifying Illinois data centers
Film Production Tax Credit

The Illinois Film Office, located in the Illinois Department of Commerce & Economic Opportunity, offers a 30% tax credit to film in Illinois
High Impact Business Program

Projects that invest $12 million and create 500 full-time jobs or invest $30 million and retain 1,500 full-time jobs may be eligible for tax credits to help expedite their growth
Illinois Opportunity Zones

Illinois Opportunity Zones provide an incentive for investors to invest in areas that need investment to help create jobs and investment
River Edge Redevelopment Zone Program

The River Edge Redevelopment Zone Program helps revive and redevelop environmentally challenged properties adjacent to rivers in Illinois
Blue Collar Jobs Act Tax Credit Program

The Blue Collar Jobs Act (BJCA) program supports large-scale economic development activities by providing corporate income tax credits to companies that make substantial capital investments in Illinois.
Illinois Apprenticeship Education Expense Tax Credit Program

Effective January 1, 2020, employers are allowed a tax credit for qualified educational expenses associated with qualifying apprentices
Illinois Historic Preservation Tax Credit Program

River Edge Historic Tax Credit Program provides state income-tax credit equal to 25% of a project’s qualified expenditures to owners of certified historic structures
Prime Sites Capital Grant Program

Assists companies with large-scale capital investment projects that commit to significant job creation for Illinois residents
Illinois New Markets Development Program
Illinois Enterprise Zones Program

The Illinois Enterprise Zone Program stimulates economic growth and neighborhood revitalization in economically depressed areas of Illinois through state and local tax incentives, regulatory relief and improved governmental services