What is the withholding tax credit? | News

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Small businesses struggling to keep up with Illinois’ rising minimum wage would get tax relief under new legislation being discussed at the Statehouse.

State Rep. Maurice West, D-Rockford, introduced a bill called the Income Tax Withholding Credit which is designed to provide incentives to employers with fewer than 250 employees who wish to provide raises to other employees.

House Bill 186 creates a payroll deduction credit for employers equal to a percentage of compensation paid to qualified employees who have received a raise from the employer.

“It’s designed to help low-income and middle-class people by incentivizing small businesses to raise wages above the established minimum wage,” West said.

Illinois’ minimum wage increased to $12 an hour on January 1 and will continue to increase each year until it reaches $15 an hour in 2025.

During a House Revenue and Finance Committee hearing on the matter on Thursday, West’s chief of staff, Jeremy Ennis, said it was not an ideal situation when management was earning the same amount of money. money than the people she leads.

“For small businesses, it allows them to take some of the burden of raising salaries from supervisors and senior employees, pushing them above a minimum wage if they were previously below it,” he said. said Ennis.

Ennis said smaller businesses have been hit by the so-called “big quit” as workers quit for more money and some move on to bigger companies.

“It gives a small business a chance to compete and potentially attract employees who might otherwise go to a larger company,” Ennis said.


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