IL Governor signs measure allowing businesses tax credit for apprenticeship training

CHICAGO – Building on bipartisan efforts to support business growth in Illinois, Governor JB Pritzker signed legislation today to create a new apprenticeship tax credit and extend the research and development tax credit into 2026.

The program allows businesses $3500 in state tax credit for qualified education expenses for apprentices.

“An important part of my job is to transform our state into one of the most forward-thinking, economically prosperous, and innovative in the nation,” said Governor JB Pritzker. “We have the most talented and dedicated workforce in the nation – but we need to produce tens of thousands of new skilled workers each year for the next ten years to replace the highly skilled manufacturing workforce that’s retiring – and to meet the growing demand for quality, talented employees.”

Beginning January 1, 2020 and sunsetting on December 31, 2024, the new apprenticeship tax credit will cover up to $3,500 of qualified education expenses incurred by employers on behalf of a qualifying apprentice. To increase equity, an additional $1,500 credit may be awarded if the company’s principal place of business is in an underserved area or the qualifying apprentice resides in an underserved area. The program is capped at $5 million per year and is a DCEO-administered certificate-based program.

The new law also extends the research and development tax credit from a sunset of December 31, 2021 to December 31, 2026. The R&D credit is equal to 6.5% of qualifying expenditures for increasing research activities in Illinois and is nonrefundable against corporate income taxes.

Senate Bill 1591 is effective immediately.

“Offering this tax credit will not only incentivize employers to invest in their labor force but will provide alternatives for young people looking to further their education,” said Sen. Ann Gillespie (D-Arlington Heights). “Apprenticeships leave their participants with little to no debt and give them marketable job skills in their industry.”

“The whole perspective and attitude about governing is changing with our new administration. We work together. We are building the economic future of Illinois upon our many strengths, rather than just standing still focused on weaknesses,” said Rep. Mark Walker (D-Arlington Heights).

“One of our strengths is research and development by our leading companies. Another is our history of successful apprenticeship programs. We are investing and greatly expanding these areas of proven success, to create opportunities and jobs.”