SPRINGFIELD, Ill. — With minimum wage set to increase to $15 per hour by 2025, small businesses are able to take advantage of a tax credit to help offset increased costs to the business community.
State Senator Chuck Weaver (R-Peoria) said the tax credit is available to businesses and nonprofits with 50 full-time equivalent employees or fewer.
The Minimum Wage Credit will allow small businesses a maximum credit of 25 percent of the difference between the new minimum wage and what each employee was paid previously. The percentage allowed each proceeding year will decrease before it sunsets in 2026.
Effective Jan. 1, Illinois’ minimum wage increased from $8.25 per hour to $9.25 per hour, which potentially put burdens on small-business owners.
Businesses can begin to claim the credit on their quarterly Illinois Withholding Income Tax Returns. While this is not a long-term solution for small businesses, it will provide a measure of relief to employers as they face the hardships imposed by the minimum wage increase, Weaver said.
For more information on the Minimum Wage Credit and how to calculate this credit, visit tax.illinois.gov.