On June 16, 2025, Illinois Governor JB Pritzker signed the 2026 budget bill, HB2755, which includes several new and updated credits available for businesses. Ryan experts can help determine if you qualify for these credits and ensure you are taking full advantage of the state’s tax-saving programs. If you have questions about other parts of the Illinois 2026 budget bill, please see our previous article.
New Advancing Innovative Manufacturing for Illinois Tax Credit Act
The Advancing Innovative Manufacturing (AIM) tax credit is designed to make Illinois a leader in domestic and international manufacturing for demanded goods. Targeted industries include, but are not limited to, automotive, aerospace, food, energy, life sciences, fabricated metals, chemicals, advanced materials, robotics, and machine manufacturing.
The Department of Commerce and Economic Opportunity (DCEO) will oversee the program and award income tax credits for taxable years beginning after January 1, 2026, to eligible manufacturers for projects with a minimum capital investment of $10,000,000.
- For investments of at least $10,000,000 but less than $50,000,000, the maximum credit is 3% of the capital improvement amount.
- Investments between $50,000,000 and $100,000,000 may receive a maximum credit of 5%.
- Investments of $100,000,000 or more may receive the maximum credit of 7%.
The tax credit award may reflect investments made within a maximum five-year period. Unused credits may be carried forward for a maximum of 10 years for use in future taxable years. Credits will be issued after the project is placed in service.
Applications for this credit must be detailed and cover a broad list of eligibility criteria. Kyle Olmschenk, Direct of Credits and Incentives at Ryan, believes that “the AIM program is a lucrative new tool that should generate a decent amount of traction for Illinois manufacturers and allow Illinois to remain competitive for securing new investment in the state.” Ryan experts, such as Kyle, can help you navigate the process to ensure you receive the maximum allowable credit for your project.
Changes to Enterprise Zone Act
The Enterprise Zone Act provides a number of benefits to high-impact businesses in Illinois. These benefits include investment tax credits, potential construction jobs credits, and state sales tax exemptions. Eligible businesses must meet minimum investment and job creation or retention requirements within specified enterprise zones.
These benefits were previously expanded to include qualified new electric-generating facilities, wind energy facilities, and solar facilities. The 2026 budget bill expands these benefits to include new high-voltage direct current converter stations, as defined in Section 1-10 of the Illinois Power Act. Ryan’s experts can help you determine eligibility and available benefits under the Enterprise Zone Act, including this most recent amendment.
Changes to Economic Development for a Growing Economy Tax Credit
The Economic Development for a Growing Economy (EDGE) Tax Credit Act was also amended in the budget bill, allowing certain taxpayers the option to claim the credit against their obligation to pay overwithholding taxes. Any elections under the modified procedure are made by entering into an agreement with DCEO and remain effective for the duration of the agreement.
The election may also now be made by a taxpayer that
(i) is primarily engaged in the recycling and melting of steel products and in the manufacturing of new steel wire and rod products;
(ii) retains at least 700 full-time jobs at risk of termination or relocation outside Illinois;
(iii) relocates its corporate headquarters to Illinois from another state;
(iv) makes a capital investment of at least $40,000,000 within four years after the effective date of an agreement under the Act; and
(v) makes an application for an agreement within 90 days after June 16, 2025. The duration of the credit under this new paragraph may not exceed 15 taxable years.
If you have questions about your eligibility for the expanded EDGE credit or any of the other credits and programs in the new budget bill, reach out today to one of the Ryan experts listed below.
TECHNICAL INFORMATION CONTACTS:
Melissa Munoz
Principal
Ryan
505.312.4665
melissa.munoz@ryan.com
Kyle Olmschenk
Director
Ryan
414.369.6645
kyle.olmschenk@ryan.com
The material presented in this communication is intended to provide general information only and should solely be seen as broad guidance and not directed to the particular facts or circumstances of any individual who may read this publication. No liability is accepted for acts or omissions taken in reliance upon the content of this piece. Before taking (or not taking) any action, readers should seek professional advice specific to their situation from Ryan, LLC or other tax professionals. For additional information about this topic, please contact us at info@ryan.com.
- Sujet
- Melissa Munoz