(The Center Square) – Small businesses having a tough time keeping up with Illinois’ escalating minimum wage could get a tax break under new legislation being discussed at the statehouse.
State Rep. Maurice West, D-Rockford, has filed a bill called the Income Tax Withholding Credit, which is designed to provide incentives for employers with fewer than 250 employees who want to give raises to other employees.
House Bill 186 creates a credit against withholding tax payments for employers in an amount equal to a percentage of the compensation paid to qualified employees who received a raise from the employer.
“It is designed to help low income and middle class earners by providing incentives to small businesses to raise wages more than the established minimum wage,” West said.
Illinois’ minimum wage increased to $12 per hour on Jan. 1, and will continue to increase each year until it hits $15 per hour in 2025.
During a House Revenue and Finance Committee subject matter hearing Thursday, West’s chief of staff Jeremy Ennis said it is not an ideal situation when management is making the same amount of money as the people they manage.
“For small businesses, it allows them to alleviate some of the burden of raising wages for supervisors and senior employees, pushing them above a minimum wage number if they were previously below that,” Ennis said.
Ennis said small businesses have been hurt by the so-called “Great Resignation” as workers have quit for more money and some have moved on to larger companies.
“This gives a small business a chance to compete and potentially attract employees that otherwise might go to a larger company,” Ennis said.
