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By: Rebecca K. Wohltman

Beginning January 1, 2023, Illinois employers may be eligible for a new tax credit – the Organ Donation Credit (35 ILCS 5/704A(j)).

If a private Illinois employer gives all of its employees the option to take a paid leave of absence of at least 30 days so the employee can be an organ donor or a bone marrow donor, the employer may be eligible for up to $1,000 in tax credits against its Illinois withholding obligations.

The credit is up to $1,000 of amounts withheld from the employee for Illinois income tax withholdings while the employee is on leave and is available for each qualified leave. In other words, if an employee takes a qualifying paid leave of absence to donate bone marrow, then takes another paid leave of absence to donate a kidney, the employer could receive up to $2,000 in tax credits.

The key is the employer must offer, and the employee must take, a paid leave of absence. If the employee’s leave is not paid, there are no withholdings for which to receive the credit. In order to be a qualified organ donation leave program, the employer cannot require the employee to use vacation time, compensatory time, personal days, or sick time for at least the first 30 days of the absence.

The credit is calculated on a dollar-to-dollar basis up to $1,000. If the employer withheld $1,500 from the employee’s wages while the employee was on leave, the employer is only eligible for $1,000 in credits. If the employer withheld $500 from the employee’s wages while the employee was on leave, the employer is only eligible for $500 in credits.

The employee is required to provide documentation of the bone marrow or organ donation procedure to the employer, and the employer is required to keep those records. If the employee does not give the employer consent to share the documentation of the procedure with IDOR (in order to establish the employer’s right to the credit), the employer will not be eligible for the credit.

Employers are not required to claim the credit in the quarter of the employee’s leave. However, the credits must be claimed within 1 year of when the employee’s organ donation leave begins.

While this credit will not offset all of an employer’s costs to pay the employee during the employee’s leave, organ and bone marrow donations save lives. Facilitating these donations is a worthy goal.

If you have questions about what you must include in your plan in order to qualify for the Organ Donation Credit, please contact Rebecca K. Wohltman.

Professional Services Disclaimer: Please note that the information presented here is as an educational service, and while it contains information about legal issues, it is not legal advice. No warranty is made regarding the applicability of the information presented to a particular client situation, and the information set forth is not a substitute for original legal research, analysis and drafting for a particular client situation.