Often, major legislation discussed in Springfield makes media headlines and creates social media buzz. However, often legislation can serve our business community in a significant way yet go virtually unnoticed. One such piece of legislation is the minimum wage tax credit offered to businesses and not-for-profits with 50 or less full-time equivalent employees.
This tax credit was initially established to off-set the incremental increases in the minimum wage which was passed in 2019. In the original bill, a tax credit was set at 25% in 2020, decreased to 21% in 2021 then incrementally tapering to 5 % by 2025. This credit would end entirely in 2026 for employers with greater than five employees and in 2027 for employers with less than five employees.
This Naperville Area Chamber of Commerce (NACC) supported a bill this past legislative session which would return the tax credit to 25% for the next four years. These legislative changes would support small businesses struggling with the increased employee costs due to the sharp increases in the minimum wage while navigating the financial uncertainly brought on by the pandemic.
In speaking with a Chamber Member recently, I learned that this 25% tax credit served as a financial lifeline to keep their area restaurant open during this challenging period. A key take-a-way from our Chamber member’s story is that legislation can have a major impact on our business community regardless of the attention it receives from the community as a whole or through media outlets. There is wisdom in the adage, “the devil is in the details.” Small details in legislation matter.
The bill extending the minimum wage tax credit did not pass this session. However, the NACC will continue to actively work to ensure our elected officials know the value that these tax credits provide to our local business community. We would like to hear from other businesses who can speak to the value of these or other tax credits on your business’ bottom line. Please reach out.