New Year, New Springfield?

With the General Election behind us, will changes come to the state capitol?

{Visit Capitol Dispatch for the latest legislative news}

The New Year marks the coming of a new General Assembly. In the second week of January, newly elected and reelected representatives and senators will be sworn into office, and the 100th General Assembly will be assembled and organized to perform their legislative duties.

Time will only tell if last November’s election results become a catalyst to change the climate of gridlock in the State House that Illinois has suffered under for so long. As it stands, Illinois still needs an operating budget, and mounting financial crises continue to grow.  

It’s expected that the outgoing 99th General Assembly will make some difficult decisions ahead of its legal adjournment before the second Wednesday in January, sine die. Members of the 99th General Assembly will have only a short period to make appropriations for the remaining six months of the FY2017 State Operating Budget, not provided for in the Emergency Stop Gap Budget Agreement. They’ll also need to pass a state pension reform measure, which was a condition for the bipartisan passage of Chicago pension parity legislation (Senate Bill 2822). Legislation that passed both Chambers, but hasn’t been officially presented to the Governor, would provide Chicago Public Schools with a $205M pension system infusion, which is in line with state contributions to downstate and suburban teachers’ pension funds.

State House veterans, however, are anticipating a Lame Duck Session prior to the 99th General Assembly’s sine die adjournment, where discussions will focus on an income tax rate increase for individuals and corporations to provide state government with needed revenues. There was momentum behind such a move when the Emergency Stop Gap Budget Agreement was reached in June, but it will be interesting to see if the post-election banter and election results disrupt or push forward a resolution.  

CPAs and tax practitioners should expect to see several changes on state tax returns for the rapidly approaching 2016 filing season, thanks to action under the State House Dome.

Paid tax preparers, for instance, will be required to include their Internal Revenue Service Preparer Tax Identification Number (PTIN) on Illinois state tax returns. This new requirement is the result of the Tax Preparer Oversight Act, effective January 1, 2017. The Act establishes Illinois Department of Revenue (IDOR) oversight of paid tax preparers, but recognizes the training and licensure of CPAs, attorneys and Enrolled Agents to avoid imposing additional regulatory burdens and costs or create a separate tax preparer credential that would add to marketplace confusion.

IDOR also will issue regulatory guidance on 2016 state tax return due dates for S Corporations, C Corporations and Partnerships to reflect changes at the federal level. The State Chamber of Commerce and the Illinois CPA Society (ICPAS) has been in discussions with IDOR, and it is anticipated that the regulatory guidance will reflect April 15 due dates.

The ICPAS Government Relations Office will continue to keep you informed of important legislative issues impacting the CPA profession, including in our Capitol Dispatch e-news digest and via legislative updates. We’ve added new legislative resources to the Government Relations section of the ICPAS website that includes our “Morning Report” briefing when the General Assembly is in session, real-time legislative tracking reports, and more.

As always, keep the lines of communication open, and let us know if you hear of a legislative or regulatory issue impacting your profession.