Senator Jil Tracy is reminding small businesses to check out a tax credit that will help them offset increased costs from a series of scheduled minimum-wage increases through 2025.
“The New Year brought with it the first of several minimum wages hikes. On Jan. 1, Illinois’ minimum wage increased from $8.25 per hour to $9.25 per hour, putting even more financial pressure on small-business owners across the state. Wages will continue to increase incrementally to $15 per hour by 2025,” Senator Tracy said.
The 47th District Senator said small businesses are being encouraged to take advantage of a tax credit available to businesses and nonprofits with 50 or fewer full-time equivalent employees.
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. Businesses can begin to claim the credit on their quarterly Illinois Withholding Income Tax Returns.
“While the Minimum Wage Credit is not a long-term solution for small businesses, it will provide a measure of relief to employers as they deal with the higher costs resulting from the minimum wage increases,” Senator Tracy said.
Small-business owners can find more information on the Minimum Wage Credit, and how to calculate this credit, at tax.illinois.gov.