Good news on the Earned Income Tax Credit (EITC) for Illinois—the EITC will be doubled! The Earned Income Tax Credit is a valuable credit for low income families. Through our partnership with the Center for Economic Progress, we help low income families file their taxes for free and claim this valuable credit. If you would like to volunteer to help people file their taxes, all training is provided in early January. Sign up to volunteer as a tax preparer on our website.
Here is information about the EITC increase, passed by Illinois legislature on December 13. The information is from Tax Credits for Working Families:
This week the Illinois legislature passed a bill to increase its Earned Income Tax Credit, doubling the size of the credit to 10 percent of the federal EITC, phased in over three years. The bill cleared its final legislative hurdle Tuesday when the Senate passed it in a special session, after the House passed the bill on Monday. Governor Pat Quinn is expected to sign the bill, which is paired with a bill to cut taxes for corporations and smaller businesses.
The expanded credit will help 935,000 working families keep a bit more of their paychecks, providing them with an additional $90 million in 2014, when the improvement is fully implemented. Low- and middle-income working families will also receive an additional boost from a $50 increase in the personal exemption, which is now indexed to inflation. Gov. Quinn championed the EITC increase, insisting that relief for families be included in any plan that cuts taxes for businesses. While earlier versions of the tax cut package put forth a larger increase that would have tripled the size of the EITC, the expanded credit still represents a significant portion of the $330 million overall package.
The Illinois Make Work Pay Coalition, staffed by Voices for Illinois Children, has advocated for an increase in the state EITC since 2003. The improvement to the Illinois EITC demonstrates that states can enact or expand tax credits for working families as part of a larger plan for jobs and economic growth even during difficult economic times.
