Last year, Illinois started giving local news outlets tax credits to support journalism jobs. A new report looks at how it’s going.

During a devastating week of news about news, you could easily have missed a new policy paper from the nonprofit Rebuild Local News.

The report, released last Thursday, is a substantive, measured look at early stats and lessons learned from the first year of Illinois’ Local Journalism Sustainability Tax Incentive Program, which created the country’s first refundable tax credits for local news. Rebuild Local News, which “supported and helped design the original legislation,” finds concrete areas for improvement and offers suggestions. But the topline numbers from its analysis demonstrate early success that strikes me as genuinely exciting. In 2025, the program “awarded more than $4 million in tax credits to support more than 260 local journalist jobs at 55 news entities operating more than 120 local outlets across the state: newspapers, digital news sites, broadcasters, commercial and nonprofit newsrooms alike.”

In practice, the refundable tax credits provide direct cash infusions to participating newsrooms, especially “many small and non-profit outlets with limited tax liabilities but significant payroll costs.” One recipient told RLN the credits “will be our second largest revenue stream for the year… about 15% more. So that’s a sizable impact on our ability to cover the community.”

Local news organizations across the U.S. are in dire need of this kind of structural support to supplement the ad-hoc fumes of one-off grants. And these hard numbers from Illinois are a stark contrast to other state-level journalism policy efforts that have (so far) completely failed to get dollars into the hands of local newsrooms, or sausage-making that has excluded large swathes of the local news business from eligibility.

The early success in Illinois indicates this policy structure has real potential to meaningfully support local newsrooms of different shapes and sizes without compromising their independence. “The program’s formula design and implementation raised no known allegations of government officials picking winners and losers or making content-based distinctions between news outlets,” Rebuild Local News notes, and beneficiaries did not include obvious “pink slime” outlets. Those factors “suggest a high-integrity and First Amendment-friendly subsidy design that can be scaled up as funding allows” — and one that has promise for the many states that have introduced or are considering similar programs.

The big picture

• In total, 73 news organizations applied for the tax credit, according to data the Illinois Department of Commerce and Economic Opportunity (DCEO) shared in response to an open-records request from Northwestern University. That data, released on December 9, showed that 55 news outlets have been approved to receive credits, 11 were denied, and six requests are pending.
• More organizations used the “existing journalist” tax credit than the “new journalist” tax credit. The program created two different tax credits: An “existing jobs” credit worth $15,000 for each qualified journalist employed during the past 12 months, and a “new jobs” credit worth $10,000 for each new journalism position “created in the year prior to the application period.” The program authorizes up to $25 million in funding over five years ($5 million per year). That was split into $4 million for the “qualified journalists” credits, and $1 million for the new hire credits, all distributed on a first-come, first-served basis. Per the DCEO, “the full $4 million for retaining existing journalists has been allocated for 2025, while only $260,000 of the $1 million available for hiring new journalists was claimed, leaving about three quarters of the hiring funds unused.”
• Rebuild Local News found that the one-time hiring tax credit might not be a strong enough financial incentive to offset the long-term costs of adding new positions in newsrooms barely hanging on. One recipient said “the funds would push a decision over the edge on a new hire ‘in normal times,’ but they still face headwinds in a precarious industry and economic landscape.” A limited hiring window and lack of awareness about the program in its first year were also barriers to participation. As the program becomes more widely known, RLN suggested that the tax credit could function as a “complementary layer alongside philanthropy” for supporting new hires.
• The program helped a lot of small newsrooms, all around the state. “A majority of funds were awarded to news organizations outside of the Chicago metro area, and more than one-third went to non-profit news organizations. Larger news organizations did not monopolize program awards: Two-thirds of the recipients were small news outlets of six or fewer journalists.”

• Most funds went to local newspapers (which still account for most local news outlets). Local newspapers received close to two-thirds of the awarded funds. The rest were split between broadcast and digital outlets. Commercial TV news stations, and the chains Gannett and Alden, weren’t represented among recipients; because the identity of declined applicants wasn’t released, it’s unclear whether they were rejected or just didn’t apply. Ethnic and non-English media were also underrepresented, potentially due to communication and capacity barriers.

Room for improvement

• Tweak the new journalist tax credit. To increase utilization of the new hire tax credit, RLN suggests increasing its value to at least $15,000 and considering converting it into a “two-year tapered subsidy…a new hire credit could continue in a smaller $10,000 credit in the second year, easing the organization’s transition to bearing the full payroll liability.” RLN also suggests adjusting or removing the organizational funding cap for the new hire credit.
• Tweak eligibility to include university-based public media stations and sole proprietors. University-based public media stations weren’t eligible because of a requirement that an organization mention news as its stated mission. (These stations “are organized within a larger entity that does not reference news in its mission.”) They could be included by amending the fine print of the statute to include State Governmental Education Agencies that own public broadcasting licenses. Sole proprietors with pass-through/non-wage income were ineligible because they don’t issue W-2 forms. RLN suggests language changes to make this “vital and growing segment of the news ecosystem” eligible for much-needed support.
• Loosen the publication frequency requirement for digital organizations. To be eligible for the tax credits, digital orgs had to have published at least weekly over 12 months, which excluded some investigative heavyweights that publish less frequently. RLN suggests shifting to a monthly publication frequency requirement.
• Improve communication and reduce administrative barriers. Materials like sample applications could be helpful to first-time applicants, as could better advance communication and a clearer timeline — some newsrooms were surprised it took an entire year to receive funding. Publishers that used third-party payroll processors ran into issues with the program’s specific filing requirements; in the future, RLN suggests this common setup requires more up-front guidance, or “strengthening the statute to require participation by payroll providers.”

This report didn’t closely examine the actual impact of the allocated dollars on participating newsrooms, because the research was mostly conducted before funds hit bank accounts. But there are anecdotal indicators of the program’s real potential for impact:

“Payroll is our biggest expense as a small newspaper,” said a suburban non-profit publisher. “The credit is a lot of money to us. It will help pay our freelancers. We have a lot of requests for coverage that we are not able to respond to, but if we can expand our freelance team and get them out to more events, that will help our community.” A small digital publisher in the Chicago area said, “We applied because any support that helps us retain journalists is meaningful. Even relatively modest amounts can make the difference between keeping someone on staff or not.”

Much more, including additional program improvement ideas and a list of credit recipients, in the full report here.