SALT Tax Benefits, Chicago Budget, Assistance for Low Income Families

State Law Change Offers Potential Solution to SALT Limitation for Pass-Through Entity Owners

Governor Pritzker recently signed SB 2531 into law, which enacts a pass-through entity tax election for partnerships and S corporations that could allow individuals to increase their federal deduction for state taxes and bypass the $10,000 Tax Cuts and Jobs and Acts of 2017 (TCJA) state and local tax (SALT) limitation. The election, commonly referred to as the pass-through entity election (PTE), is effective for tax years ending on or after Dec. 31, 2021, and prior to Jan. 1, 2026.

Based on Internal Revenue Service Notice 2020-75 issued in November 2020, owners of an entity with a PTE should be allowed a deduction for Illinois income tax, which may exceed the $10,000 SALT limitation enacted by the Tax Cuts and Jobs and Acts of 2017 (TCJA). Accordingly, an individual partner or shareholder could achieve a benefit of 37% of their share of Illinois income tax.

Click here to read a full overview from Plante Moran.

Click here to read more from Crain's Chicago Business.

Mayor Lightfoot Releases 2022 Budget Proposal

Yesterday, Mayor Lightfoot presented to the City Council the 2022 Budget Recommendations.

The $16.7 billion Recovery Budget closes the projected $733 million gap and an additional $56.3 million in new Corporate Fund investments with $298.2 million in savings and efficiencies, and $491.1 million in new or increased revenues – including leveraging American Rescue Plan (ARP) Local Fiscal Recovery Fund (LFRF) resources for essential City services. These gap closing measures result in a 2022 Budget with no new tax or significant fee increases for residents.  

Along with the 2022 budget, the City is also introducing the Chicago Recovery Plan, which outlines the strategy for how the City will employ resources to respond to the negative impacts of COVID-19 and drive economic recovery. Key investments in the Chicago Recovery Plan include:

• $635 million to maintain and expand affordable housing 

• $26 million in arts & culture investments to expand place-based arts and events opportunities 

• $86 million for mental health to increase access to mental health services 

• $135 million for direct violence prevention initiatives to increase community safety 

• $188 million in environmental justice and climate investments  

• $150 million for youth services and jobs to expand opportunity for youth to access employment and out-of-school programming 

• $166 million in community development initiatives to drive equitable growth and job creation. 

• $87 million in workforce and small business support to expand economic opportunity  

• $144 million in assistance to families to connect families with critical resources to improve health outcomes and increase opportunity  

• $202 million for homelessness initiatives to expand services and housing opportunities for those experiencing homelessness. 

• $144 million in other key initiatives including parks and infrastructure, food equity, and tourism and industry support 

As budget season continues, the IRA will stay in communication with the Mayor and City Council to ensure there are no tax and fee increases on the restaurant and hospitality community.

Click here to read the full announcement.

Gov. Pritzker Announces $327 Million in Household Assistance Available for Low-Income Families in Illinois

Yesterday, Governor Pritzker joined the Illinois Department of Commerce and Economic Opportunity (DCEO) and community partners to announce $327 million in Help Illinois Families assistance now available through the Low-Income Household Energy Assistance Program (LIHEAP) and the Community Services Block Grant Program (CSBG). The program offers expanded services to support Illinois' most vulnerable residents with rent, utilities, food and other household expenses regardless of immigration status.

With support from the American Rescue Plan Act and increased eligibility provisions by the State of Illinois, residents will have access to more utility assistance than ever before, as well as increased availability of funds per household. The State is leveraging $209 million from the American Rescue Plan Act (ARPA) to expand relief for Illinois families struggling to pay their bills as a result of the COVID-19 crisis. LIHEAP funds are available from now through May 31, 2022. To apply, please go to DCEO's website or visit helpillinoisfamilies.com.

Click here to read the full announcement.

National Restaurant Association Opposes Congressional Efforts to Increase Corporate, Individual Taxes

Congressional tax writers are considering a number of tax increases in the $3.5 trillion budget reconciliation bill that is anticipated to make its way to the House Budget Committee in the coming weeks. The National Restaurant Association has been working with moderate members of Congress who will play a critical role in passing the bill, to educate them on the detrimental impact tax increases would have on the restaurant industry still struggling to recover from the pandemic. In a letter to House Ways and Means Committee leaders, the Association opposed:

• Elimination of the small business tax deduction for qualified business income (QBI) after $500,000.

• Increasing the top marginal individual income tax rate to 39.6%.

• Increasing the corporate tax rate from 21% to 26.5%.

• Including a new application of Net Investment Income Tax to trade or business income of certain individuals and small businesses.

• Increasing the capital gains tax rate to 25% for certain high-income individuals and small businesses.

If passed, most of the proposed changes will take effect in January 2022. “Raising taxes during a pandemic creates unintended consequences for a restaurant’s prospects for survival, the growth of our workforce, and the recovery of the communities we serve,” said Dan Roehl, Association vice president of Federal Government Affairs. “It would be tragic if Congress provided a lifeboat for restaurants and other small businesses via the Paycheck Protection Program, Employee Retention Tax Credit, and the Restaurant Revitalization Fund, only to sink these same businesses with a major tax hike while a full recovery remains out of sight.”

Last Minute Tickets for Hamburger Hop and Grand Cru Still Available

Don't miss out on the final events of Chicago Gourmet 2021. There are still tickets available for the Hamburger Hop presented by DoorDash, Buckhead Meat and Blue Moon Brewing Co. on Friday, September 24 and the Grand Cru presented by UnitedHealthcare on Saturday, September 25.

Click here to grab your tickets.

Guinness' Second U.S. Brewery Coming to Chicago

Today, Guinness announced that Chicago's West Loop will be the home of its second U.S. brewery. Guinness Chicago Taproom is expected to open in Fulton Market in 2023, with renovations expected to start this fall.

“For years we’ve seen Guinness as an integral part of so many bar and restaurant experiences, around the world and especially right here in Chicago,” said Sam Toia, IRA President & CEO. “We are thrilled there will now be a place Chicagoans can come to enjoy the full Guinness experience, while also continuing to strengthen the rich fabric of Chicago’s thriving hospitality community.”

Click here to read more from Chicago Sun-Times.