Recovery and Mental Health Tax Credit

Overview
The Illinois Department of Human Services (IDHS) is helping to reduce stigma surrounding mental illnesses and substance use disorders in the workplace and to increase employment opportunities for Illinoisans in recovery.

All eligible employers can apply to receive up to $2,000 of tax credit per eligible employee hired in a current tax year, or the year immediately prior to that, if the hours are aggregated over two years. Applications must be filed by March 1 of the year immediately following the tax year the credit is being claimed for.

The Recovery and Mental Health Tax Credit is calculated at the rate of $1.00 per hour with a maximum amount of $2,000 per eligible individual. The program in its entirety is limited to a maximum of $2 million per year. If more than $2 million in tax credits are claimed, IDHS will reduce the amount of a tax credit certificate on a prorated basis corresponding to each employer's share of the total claimed amount.

If the amount of the credit issued under this program exceeds the taxpayer's tax owed for the taxable year, no refund will be issued. The credit cannot reduce a taxpayer's liability to less than zero. If the amount of the credit exceeds the tax liability for the year, the credit may not be carried forward.

Qualified Employers
Qualified employers are employers operating within the State of Illinois and have:

  • A documented working relationship to provide treatment or support to employees in recovery in partnership with a local mental health and/or substance use disorder treatment organization certified or licensed by the State of Illinois; and
  • Documented policies or programs to provide reasonable accommodations to employees to address their substance use disorder and/or mental illness, at no cost to the employee.

An applicant may also provide additional evidence of their recovery-supportive workplace environment, including one or more of the following:

  • Certification as a recovery-supportive workplace by a non-profit, third-party recovery organization;
  • A documented training program for management and human resources personnel on supporting employees in recovery; and/or
  • Engagement in community-based prevention or recovery-focused activities at least once per year.

Additional resources are listed on our Recovery-Supportive Workplace Resources page.
IDHS will be happy to explain eligibility requirements to interested employers if you contact us at DHS.DMHRecoveryTaxCredit@illinois.gov.

Eligible Employees
Eligible employees are individuals who:

  • Have been hired in the current tax year or the year immediately prior to that, if hours are aggregated over two years.
  • Was newly hired by the qualified employer on or after January 1, 2023.
  • Are diagnosed with a substance use disorder and/or a mental illness.
  • Are in a state of wellness and recovery, where there is an abatement of signs and symptoms that characterize active substance use disorder or mental illness, demonstrated to the qualified employer's satisfaction.
  • Have completed a course of treatment or are currently receiving treatment for their substance use disorder or mental illness.

A relapse in an individual's state of wellness and recovery does not make that individual ineligible, so long as the individual shows a continued commitment to recovery that aligns with their relapse prevention plan, discharge plan, and/or recovery plan.

Apply Now
To apply, please download the application below. Complete and sign the employer portion and have each eligible employee complete and sign a copy of the Employee Attestation. You will also need to attach any supporting documentation as outlined in the application and submit the entire packet via email to DHS.DMHRecoveryTaxCredit@illinois.gov. The deadline for submission is March 1 of the year immediately following the year for which the tax credit is being claimed.

IL462-0303 Recovery and Mental Health Tax Credit Application
IL462-0303 Aplicacion Para El Credito Fiscal De Recuperacion Y Salud Mental

Resources
Frequently Asked Questions

Recovery-Friendly Workplace Resources

Contact Us
Please reach out with any additional questions about this tax credit program.
Email: DHS.DMHRecoveryTaxCredit@illinois.gov