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Monday, April 22, 2024

Call for expanding the minimum wage tax credit


The Naperville Area Chamber of Commerce (NACC) has joined many chambers around the state for the “Chambers All-In” initiative to advocate for key bills that will best support our business community moving toward economic recovery.* One major bill in play in which we are actively encouraging is HB5320 Minimum Wage Credit **  which would expand the minimum wage tax to off-set the increase of minimum wage. 

The Illinois General Assembly passed PA 101-0001 in 2019 which set incremental increases to the minimum wage (see increments and dates in chart below). This same piece of legislation provided for a minimum wage tax credit to support businesses and not-for-profits with 50 or less full-time equivalent employees. This credit equates to the percentage of the difference between the minimum wage in 2019 ($8.25) and the incremental increases. In the original PA 101-0001 legislation, the tax credit percentage decreased each year with the credit set at 5% percent by 2025. The chart below demonstrates the timetable for the incremental minimum wage increase, the percent difference of the tax credit in the original legislation, and what percentage rates are proposed in the HB5320 Minimum Wage Credit bill.

Increments of Minimum Wage Increase

(from $8.25 in 2019)

2019 Legislation Creating Tax Credit* Proposed Legislation
$9.25  (1/1/20)

$10  (7/1/20)

25% in 2020 25% in 2020
$11  (1/1/21) 21% in 2021 25% in 2021
$12  (1/1/22) 17% in 2022 25% in 2022
$13  (1/1/23) 13% in 2023 25% in 2023
$14  (1/1/24)  9%  in 2024 25% in 2024
$15  (1/1/25)  5% in 2025   5% in 2025
Ends on 12/31/26 for employers with >5 employees.

Ends on 12/31/27 for employers with <5 employees.

* Tax credit reflects the difference between the new minimum wage at each increment and what each employee was paid previously.

We are proud that HB5320 Minimum Wage Credit bill has bipartisan support. A special thank you to our area legislators who have co-sponsored this bill.

Having to shoulder the additional costs of the minimum wage increases to the existing financial challenges brought on by COVID-19 has wielded a significant financial blow to our small businesses. Increasing the percentage of the minimum wage tax credit will provide much needed financial relief to our small businesses over the next few years while our economy recovers from the devastation of a global pandemic. This additional money back in the pocket of small businesses will allow them to reinvest in expansion and job growth. The NACC will continue to advocate for this bill. If your business or not-for-profit agency can speak to the value of this minimum wage tax credit to your organization, please reach out, so that we can relay this information to our elected officials that need to hear from you.

As always, please contact me if you have questions or want to discuss policy issues impacting your business or industry.


*  See the Chambers ‘All-In’ details on the Minimum Wage Tax Credit at:


**  HB5320 Minimum Wage Credit bill full description with updates on bill co-sponsors, actions, etc. on the Illinois General Assembly website:


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Reba Morgan Osborne
Reba Morgan Osbornehttp://naperville.net
Reba Morgan Osborne is the Director of Government Affairs for the Naperville Area Chamber of Commerce. Contact Reba at (630) 544-3387 or rosborne@naperville.net.


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