Illinois Economic Development for a Growing Economy Tax Credit Program (EDGE)

What is the Illinois EDGE Program? 

The Illinois Department of Commerce and Economic Opportunity (DCEO) introduced the Illinois Economic Development for a Growing Economy (EDGE) program in 1999. It is a tax incentive program designed to encourage businesses to invest, create, and retain jobs in Illinois through a non-refundable tax credit. The credit is equal to 50% of the withholdings for the newly created jobs or 75% for jobs created in underserved areas. In addition, there is a 10% credit for eligible training costs related to newly hired employees. 

Illinois EDGE is a “discretionary incentive." Unlike statutory tax credits or incentives, which taxpayers claim “as a right” or are automatically granted based on specific criteria, discretionary programs allow government agencies to decide who receives the benefits and under what conditions. As a result, DCEO provides awards on a case-by-case basis. This flexibility can be beneficial in targeting specific industries, regions, or projects deemed to be priorities for economic development or other public policy goals. 

Although the program was scheduled to sunset June 30, 2022, it was extended and is now scheduled to sunset June 30, 2027, so businesses should take advantage of the incentive opportunities now. 

Who Qualifies for EDGE? 

To qualify for the EDGE program, businesses must meet specific job creation and capital investment criteria. Companies with 100 or fewer employees must create new full-time jobs equal to 5% of their worldwide employment or at least 50 jobs, whichever is less. There is no minimum capital investment required. Larger companies must make capital investments of at least $2.5 million and create new jobs equal to 10% of their worldwide employment or at least 50 jobs, whichever is less. 

EDGE for Startups

For startups looking to expand their operations and tap into tax savings, the Illinois EDGE tax credit program offers a compelling opportunity. To qualify, a business must: 

• Have been incorporated within the last ten years 

• Have never had an Illinois income tax liability 

• Be ready to hire full-time W2 employees 

If approved, tax credits are awarded as follows: 

• Tax credit for new hires: 50% 

• Tax credit for retained jobs: 25% 

• Jobs in underserved areas: +25% 

Additional credits are also available as reimbursement for qualifying training costs. Ten percent of eligible training costs of newly hired full-time employees at the project may also be included in the annual credits. 

Underserved Areas 

Expansion projects occurring in a designated “underserved area” receive additional benefits. After July 1, 2022, the definition of ‘underserved area’ has been amended to mean one or more of the following: 

• The area has a poverty rate of at least 20%, according to the latest American Community Survey (ACS) 

• 35% or more of the families with children in the area are living below 130% of the poverty line, according to the ACS 

• 20% or more of the households in the area receive help under the Supplemental Nutrition Assistance Program (SNAP) 

• The average unemployment rate in the area is more than 120% of the national unemployment average 

Qualifying Industries 

Industries eligible for the EDGE program include: 

• Manufacturing 

• Processing 

• Assembling 

• Warehousing 

• Distribution 

• Agriculture 

• Office industries & other services 

• • Research & Development (R&D) 

• • Tourism services 

• • Interstate commerce related 

Excluded Industries 

• Retail (including food) 

• Health 

• Professional services 

These excluded industries may apply for the credit if they have a particular operation, such as a distribution center, which may be making qualified investments and creating net new jobs. 

How Does the EDGE Program Help My Business? 

The Illinois EDGE program provides benefits that help companies invest in their businesses, ensuring growth and stability for their operations.

If your organization meets the above criteria and wants to invest in its growth, EisnerAmper’s credits and incentives team can help. Contact us today to find out how we can assist.