Frequently Asked Questions

Can individuals apply for a tax credit on their own taxes? Or is this a corporate tax benefit that organizations apply for?
This is a tax credit for businesses that pay corporate taxes. It doesn't apply to an individual's personal tax return or for businesses that don't pay corporate taxes.
When do employees need to be hired, and how many hours do they need to work for their employer to be eligible for the tax credit?
An eligible employee must be hired by a qualified employer in the current tax year or the year immediately prior to that, if the hours are aggregated over two years. During the qualification period, the employee must work between 500 - 2,000 hours. Only employees hired after January 1, 2023, may be considered eligible for the employer tax credit.
If my employee has a relapse, will I lose the tax credit?
No, a lapse or relapse, which is a brief or prolonged return to active substance use or a reoccurrence of mental illness symptoms, has no effect on the tax credit. Employers must work with employees with a substance use disorder or mental illness, as they would with any other employee with a chronic illness or disability. However, employees would still need to meet the minimum hours of employment to be eligible.
Do employees need to sign off when receiving the training requirements listed in the application?
Employers should keep records of when the training was provided and to whom. A sign-in sheet for these sessions that includes the date and printed names of employees would be enough. You do not need to submit this document with the application but must be able to present it in case of an IDHS audit.
What if the tax credit exceeds my total tax liability for the taxable year?
The tax credit must be claimed in the taxable year when the tax credit is issued. The credit cannot reduce your tax liability to less than zero. If the amount of the credit exceeds your tax liability for the year, you cannot carry the tax credit forward to future years.
What does it mean in the application when it says, "Assist individuals in recovery with the hiring process?"

This could include helping a new employee who has never completed a W-4 or I-9 to fill out the forms. Further examples can be found in this Substance Abuse and Mental Health Service Administration issue brief.
If a qualified employer claims 500 hours in one tax year for an employee, can they claim the additional 1,500 hours in the next tax year for the same employee?
No, the tax credit can only be claimed once per employee. If the qualified employer expects the employee to reach a total of 2,000 hours within the following year, they can wait to claim the tax credit in that year, counting the total hours across both taxable years.