How to Apply for the Illinois EDGE Tax Credit
By: Blanca Campos, Vice President, Small Business Advocacy Council
The Economic Development for a Growing Economy (EDGE) Tax Credit program is a targeted tax incentive program that provides tax credits for businesses that create new full-time jobs, retain existing full-time jobs and make capital investments in Illinois. The program is designed to help areas of Illinois that are in direct competition with other states for jobs and development.
The EDGE program is administered by the Illinois Department of Commerce and Economic Opportunity (DCEO). The program can provide tax credits to qualifying companies, equal to the amount of state income taxes withheld from the salaries of employees in the newly created jobs. As a tax credit, the EDGE program allows a firm to reduce the costs of doing business in Illinois when compared with similar costs in other states where it could have located its operation. The credits would be available to a company for up to a total of 10 years for each project. While each annual tax credit amount cannot be larger than the company’s state income tax liability (the income tax credits would not be refundable), the credit can be carried forward for up to five years.
Who is Eligible
The development project must add to the export potential of Illinois; for example, manufacturing or services exported out of state would be acceptable, but not retail trade and personal services. To qualify a company must provide documentation that attests to the fact of competition among a competing state, and agree to make an investment of at least $5 million in capital improvements and create a minimum of 25 new full time jobs in Illinois. For a company with 100 or fewer employees, the company must agree to make a capital investment of $1million and create at least 5 new full time jobs in Illinois.
How to Apply
A company that proposes a project to meet these criteria must file an application for the credit, which is subject to DCEO approval. The Applicant must demonstrate that if not for the Credit, the Project would not occur in Illinois by providing documentation evidencing that:
1) the Applicant has multi-state location options and could reasonably and efficiently locate outside of the state; or
2) at least one other state is being considered for the project; or
3) receipt of the Credit is a major factor in the Applicant’s decision and that, without the Credit, the Applicant likely would not create and/or retain jobs in Illinois; or
4) the Credit is essential to the Applicant’s decision to create and/or retain jobs in the state.
The cost differential should be identified, using the best available data, in the projected costs for the applicantâ€™s project compared to the projected costs in the competing state, including the impact of the competing stateâ€™s incentive programs.
For further information about the EDGE Tax Credit, contact:
Illinois Department of Commerce & Economic Opportunity
Bureau of Business Development
500 East Monroe,
Springfield, Illinois 62701
Blanca Campos received her B.S. in Political Science from Rockford College and her M.P.A. with a concentration in Public Management from the School of Public Service at DePaul University. Prior to working for the Small Business Advocacy Council, she worked as a Community Outreach Liaison for Elliot Richardsonâ€™s Congressional Campaign and as a Litigation Paralegal for Botto Gilbert Schottland & Andrle, PC. In her role at the Council she supports and advocates for small business owners throughout all levels of government. Contact Blanca at: Blanca@sbacil.org