What proof does an Illinois employer need to keep to show that a hired veteran was 'unemployed' for purposes of the Credit for Hiring Qualified Unemployed Veterans?

Plain-English summary

An Illinois employer wrote to the Department of Revenue asking what documentation it needed to keep on file to support a claim for the Credit for Hiring Qualified Unemployed Veterans. Specifically, the employer wanted to know whether an employee's own self-attestation that they had met the "unemployed" requirement would be enough, or whether the employer needed to obtain verification directly from the state unemployment agency.

The Department explained that under Section 217.1(a) of the Illinois Income Tax Act (35 ILCS 5/217.1(a)), the credit applies to veterans who were "unemployed for an aggregate period for 4 weeks or more during the 6-week period ending on the Saturday immediately preceding the date he or she was hired." Section 217.1(b) (35 ILCS 5/217.1(b)) further defines a veteran as "unemployed" for a week if the veteran either (i) received unemployment benefits (as defined in Section 202 of the Unemployment Insurance Act, including federally funded unemployment benefits) for that week, or (ii) had not been employed since being honorably discharged.

In response to the documentation question, the Department stated that the Illinois Income Tax Act does not require any specific documentation or other form of proof that a veteran was "unemployed" under this definition. It noted, as one example, that a veteran can obtain a history of unemployment benefit payments received from the Illinois Department of Employment Security through that agency's online portal. Because this was issued as a General Information Letter rather than a binding Private Letter Ruling, it does not constitute a statement of Department policy interpreting or prescribing the tax laws, and it is not binding on the Department.

What this means for you

If you are claiming the veterans job credit

The letter confirms there is no statutory checklist of required paperwork to prove a hired veteran was "unemployed" under 35 ILCS 5/217.1(b). One way to document eligibility is to have the veteran obtain a payment history from the Illinois Department of Employment Security showing receipt of unemployment benefits for the relevant weeks. The letter does not, however, directly answer whether a simple self-attestation from the employee is sufficient on its own — that question was asked but not squarely resolved in the response.

If you want a binding answer

Because this is a General Information Letter, it is not binding on the Department. The letter itself states that a taxpayer who is not under audit and wants a binding answer on their specific facts may request a Private Letter Ruling by submitting the information described in items 1 through 8 of Section 1200.110(b).

Common questions

Does Illinois law require specific paperwork to prove a veteran was "unemployed" for this credit?
No. The Department stated that no specific documentation or other form of proof is required by the Illinois Income Tax Act to establish that a veteran was "unemployed" under 35 ILCS 5/217.1(b).

What evidence did the Department mention as an example?
The Department noted that a veteran can obtain a history of unemployment benefit payments received from the Illinois Department of Employment Security through its online system.

Is this letter binding on the Department?
No. It is a General Information Letter issued under 86 Ill. Adm. Code 1200.120(b) and (c), which does not constitute a statement of Department policy and is not binding. A taxpayer seeking a binding answer may request a Private Letter Ruling under Section 1200.110(b).

Citations and references

• 35 ILCS 5/217.1(a) — Credit for Hiring Qualified Unemployed Veterans; "unemployed" period requirement
• 35 ILCS 5/217.1(b) — definition of "unemployed" veteran for purposes of the credit
• Section 202 of the Unemployment Insurance Act — definition of unemployment benefits referenced in 35 ILCS 5/217.1(b)
• 86 Ill. Adm. Code 1200.120(b) and (c) — General Information Letters are not binding Department policy statements
• 86 Ill. Adm. Code 1200.110(b) — items required to request a binding Private Letter Ruling

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/income-tax/2015.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/income-tax/2015/it-15-0017-gil.pdf

Original ruling text

IT 15-0017-GIL 12/14/2015 CREDITS
Credits – Other Rulings – General Information. Documentation required to support a claim for the credit
for hiring unemployed veterans.

December 14, 2015

Re:

Credit for Hiring Qualified Unemployed Veterans

Dear Xxxxx:
This is in response to your letter dated November 18, 2015, in which you request a letter ruling. The
nature of your request and the information you have provided require that we respond with a General
Information Letter, which is designed to provide general information, is not a statement of Department
policy and is not binding on the Department. See 86 Ill. Adm. Code 1200.120(b) and (c), which may
be found on the Department's web site at www. tax.illinois.gov.
In your letter you have stated the following:
I am writing to request a General Information Letter for the Veterans Job Credit for
"qualified unemployed veterans". We are seeking guidance on what documentation
requirements the Department would consider sufficient for determining whether an
employee is "unemployed" for purposes of this credit.
The Veterans Job Credit for "qualified unemployed veterans" requires that the veteran be
"unemployed for an aggregate period for 4 weeks or more during the 6-week period
ending on the Saturday immediately preceding the date he or she was hired by the
taxpayer." 35 ILCS 5/217.1(a). Additionally, "a veteran is 'unemployed' for a week if he
or she (i) has received unemployment benefits (as defined in Section 202 of the
Unemployment Insurance Act, including but not limited to federally funded unemployment
benefits) for the week, or (ii) has not been employed since being honorably discharged."
35 ILCS 5/217.1(b).
Can you provide any guidance regarding what information must be collected and retained
by the taxpayer in order to support claiming this tax incentive? May taxpayer rely on a
self-attestation provided by the employee that he or she has met the unemployment
requirement for this tax credit? If verification by the state unemployment agency is
required, can you please provide guidance on the process for requesting and receiving
this information?
Response
Section 217.1(b) of the Illinois Income Tax Act (35 ILCS 5/217.1) provides, in part:
A veteran is "unemployed" for a week if he or she (i) has received unemployment benefits
(as defined in Section 202 of the Unemployment Insurance Act, including but not limited
to federally funded unemployment benefits) for the week, or (ii) has not been employed
since being honorably discharged.

No specific documentation or other form of proof that a veteran was "unemployed" under this definition
is required by the Illinois Income Tax Act. As evidence that the veteran was receiving unemployment
benefits, the veteran can obtain a history of payments received from the Illinois Department of
Employment Security on:
https://benefits.ides.illinois.gov/File4UI/Benefits/profile/responseHandlerAction.do?TAM_OP=login&U
SERNAME=unauthenticated&ERROR_CODE=0x00000000&URL=%2FFile4UI%2FBenefits%2Fpay
ments%2FdirectDeposit.do
As stated above, this is a general information letter which does not constitute a statement of policy that
applies, interprets or prescribes the tax laws, and it is not binding on the Department. If you are not
under audit and you wish to obtain a binding Private Letter Ruling regarding your factual situation,
please submit all of the information set out in items 1 through 8 of Section 1200.110(b). If you have
any further questions, you may contact me at (217) 782-2844.
Sincerely,

Paul S. Caselton
Deputy General Counsel – Income Tax