Illinois has established a significant new economic development act through the Advancing Innovative Manufacturing (AIM) for Illinois Tax Credit program, outlined in House Bill 2755, which became Public Act 104-0006 when signed into law by Illinois Governor JB Pritzker on June 16, 2025.1 This legislation represents Illinois' initiative to lead the nation in domestically and internationally demanded goods. AIM intends to strengthen the state's manufacturing sector, kick-starting growth in fast-growing sectors.
The program is a part of Illinois's broader economic development strategy to create good-paying, high-skill jobs, generate long-term economic investment within the Illinois economy, and make vital, modern products. The program is also designed to attract substantial capital investments while supporting both existing manufacturers and companies considering relocation to the state. By offering meaningful tax incentives tied to capital investment thresholds, Illinois aims to stimulate innovation and growth within its manufacturing landscape that will allow it to compete with domestic and foreign competitors.
Program Benefits
AIM provides direct tax relief based on qualifying capital improvement investments in new or existing manufacturing facilities. Qualifying improvements include the purchase, renovation, rehabilitation, or construction of permanent tangible land, buildings, structures, equipment, and furnishings at an approved project site in Illinois. They also include expenditures for goods or services that are normally capitalized, including organizational costs and research and development costs incurred in Illinois. Credits are non-refundable and are only issued after the project is fully placed in service. Under specific circumstances, certain taxpayers may apply these credits against their employer's payroll withholding obligations rather than solely against their income tax liability.
The program offers three different credit tiers:
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AIM Program Tiers |
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| $10-50 Million Investment | Projects with capital investments between $10 million and $50 million are eligible for a maximum credit of 3% of the capital improvement amount. |
| $50-100 Million Investment | Projects with capital investments between $50 million and $100 million are eligible for tax credits of up to 5% of the investment amount. |
| $100+ Million Investment | Projects with capital investments of $100 million or more qualify for tax credits of up to 7% of the investment amount. |
Credits are available for investments made within a maximum five-year period, with specific placed-in-service dates detailed in individual agreements between the state and qualifying companies.
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Program Timeline and Key Dates |
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| Milestone | Date/Period | Description |
| Credit Effective Date | Jan. 1, 2026 | The credit is effective for taxable years beginning on or after Jan. 1, 2026. |
| DCEO Award Period | Jan. 1, 2027 | The Illinois Department of Commerce and Economic Opportunity (DCEO) is authorized to begin awarding credits on Jan. 1, 2027. |
| Application Deadline | Dec. 31, 2030 | The DCEO cannot enter into new agreements after Dec. 31, 2030, establishing a clear sunset date for the program. |
| Investment Period | Maximum five years | Credits are available for investments made within a maximum five-year period. |
| Credit Carry-Forward | Up to 10 years | Unused credits may be carried forward for up to 10 years for use in future taxable years. |
Eligible Industries and Projects
Eligible applicants include taxpayers who either: (1) operate a manufacturing business in Illinois for critical goods, (2) operate a business primarily engaged in research and development that will lead to manufacturing critical goods, or (3) fall into one of the above categories and plan to relocate their business to Illinois. A business qualifies as primarily engaged in research and development if at least 50% of its business activities involve research and development in the manufacturing of critical goods. The program specifically targets high-growth and critical manufacturing sectors that align with Illinois's economic development priorities:
- Automotive manufacturing
- Aerospace manufacturing
- Energy and life sciences
- Life science businesses
- Machine manufacturing
- Fabricated metal manufacturing
- Chemical manufacturing and processing
- Robotics and automation systems
- Advanced materials production
Application Requirements
Eligible applicants must demonstrate substantial commitment to Illinois through a formal written letter of request to the department including comprehensive project documentation, including detailed project scope, capital investment amounts, and job creation metrics. The application process demands nuanced and extensive project descriptions, which will be incorporated into a robust project agreement between the DCEO and the taxpayer. Additionally, applicants may not participate in any other major Illinois credit programs for the same project site and period.
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AIM Compliance Requirements |
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| Requirement | Description |
| Formal Application | Applicants must submit a formal written letter of request to the DCEO. |
| Project Documentation | Detailed project descriptions with company name, project location, projected investment amount, and employment impact. |
| Minimum Investment | Minimum capital investment of $10 million to qualify for the program. |
| Project Completion | Projects must be fully placed in service before credits are issued. |
| Capital Improvements Documentation | Comprehensive documentation of all qualifying capital improvements, including acquisition, renovation, rehabilitation, or construction of permanent tangible assets. |
| Employment Impact Metrics | Employment impact metrics demonstrating job creation and retention commitments. |
| Project Agreement | The detailed project descriptions will be incorporated into a robust project agreement between the DCEO and the taxpayer. The terms of this agreement will become public information. |
| Credit Program Exclusivity | Taxpayers receiving the AIM credit may become ineligible for other major Illinois credit programs, such as the Economic Development for a Growing Economy (EDGE) Tax Credit, for the same project site and period. |
Footnote
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
