Illinois Democrats provide family tax relief

Springfield, IL – Illinois’ Family Relief Plan is backed by state Rep. Jay Hoffman and several other Labor-friendly representatives, hoping to bring relief – and tax rebate checks – to working families struggling under current economic conditions.

The Family Relief Plan has suspended the state’s one-percent sales tax on groceries for one year and delayed the implementation of the state’s automatic motor fuel tax. Together those measures should save consumers $470 million.

In addition, all residents who made less than $200,000 in 2021 – $400,000 for couples – will receive income tax rebate checks, beginning in September. A single adult gets $50; couples filing jointly will receive $100; as well as $100 per dependent, up to three dependents.

Also for lower-income residents, the plan permanently expands the earned income credit from 18 to 20 percent of the federal credit and expands the number of households permitted to take the credit.

SALES TAX HOLIDAY
The plan also creates a partial “sales tax holiday,” reducing sales taxes from 6.25 percent to 1.25 percent Aug. 5-14 for qualified school-related and clothing items – a back-to-school bonus for parents who will save approximately $50 million.

“On the tails of the pandemic, families are facing increased financial pressure brought on by inflation,” Hoffman said. “When putting together this year’s budget, we knew we had to put working families first and do what we could to help residents address higher costs.”

The plan also provides property tax rebates up to $300, in an amount equal to the tax credit for which they qualified on their 2021 state tax return.

Hoffman said offering $1.8 billion in relief to state residents is only possible due to responsible stewardship of state finances, and most Democratic state legislators agreed.

“Because of consistent responsible budgeting by Democrats, we’re able to cut taxes on everyday necessities like groceries and freeze taxes on gas, while also providing much-needed property tax rebates,” House Speaker Emanuel “Chris” Welch said. “We know people are struggling, and I’m grateful we’re able to put money back into the pockets of hardworking Illinoisans.”

PENSIONS, SCHOOLS GAIN AS WELL
In addition to a balanced budget, the FY23 plan funds pensions at $500 million above the requirements and puts $1 billion into an emergency “Budget Stabilization Fund.” MAP grants are increasing from $6,438 to $8,508 for low-income college students. Funding has increased to $9.7 billion for K-12 schools, with a 10 percent increase in early childhood funding as well, according to the governor’s office.

“This will have a positive impact on those who need help the most, and it underscores the need to continue to take strong action with our finances so that we may continue to address challenges as they rise,” Hoffman said.

The Family Relief Plan was part of the FY23 budget signed in April, but it takes effect with the beginning of the new fiscal year this month. It passed out of the state House 72-42 and out of the Senate 34-19, with most opposition coming from Republicans.

The rebates will begin rolling out in September, automatically issued via the Illinois Department of Revenue. If direct deposit was used for a state tax refund last year, the rebate will also be issued by direct deposit. Taxpayers who did not receive a refund will get a paper check mailed to the address on file.

Taxpayers who did not file state income tax in 2021 who want to claim the rebate can do so at tax.illinois.gov. Checks should roll out beginning Sept. 12 and will take approximately eight weeks to distribute.