As inflation rages, nearly $2 billion in relief planned for residents through tax cuts and direct payments
Information provided by the Governors Office
CHICAGO, Ill. (June 30, 2022) – Beginning July 1, the Illinois Family Relief Plan will go into effect, providing relief on the grocery tax, gas tax, and property taxes. The plan totals an estimated $1.83 billion in relief, including income and property tax rebates and a temporary cut in several sales taxes.
What’s all part of the plan?
The Family Relief Plan includes several tax holidays, meaning a temporary cut in taxes, including:
- Groceries: The state’s 1% sales tax on groceries will be suspended July 1 through June 30, 2023, saving consumers $400 million.
- Gas: The state’s normally scheduled increase in the motor fuel tax will be delayed from July 1 to January 2023, saving consumers $70 million.
- School supplies: Sales taxes for qualified clothing and school-related items will be reduced from 6.25% to 1.25% for a 10-day window from August 5 to 14, saving consumers $50 million.
- Items include qualifying clothing and footwear with a retail selling price of less than $125 per item. Eligible school supplies are not subject to the $125 threshold.
In addition, the plan permanently expands the state’s earned income credit from 18% to 20% of the federal credit, while expanding the number of households covered, putting an additional $100 million per year back into the pockets of working families.
Property tax and income tax rebates
The State of Illinois is also providing property tax rebates for eligible homeowners in an amount equal to the property tax credit they qualified for on their 2021 Illinois tax returns, up to a maximum of $300. The rebate is not allowed if a taxpayer’s adjusted gross income for the taxable year exceeds $500,000 for returns with a federal filing status of married filing jointly, or $250,000 for all other returns.
Additionally, individuals who made less than $200,000 in 2021 will receive $50 income tax rebates. Couples filing jointly with incomes under $400,000 will receive $100. Tax filers will also receive $100 per dependent they claimed on their 2021 taxes, up to three dependents.
Income and property tax rebates will be automatically issued to all of the estimated 6.2 million taxpayers who qualify under the Family Relief Plan based on information included in their submitted 2021 tax returns. Comptroller Susanna Mendoza will issue the rebates and expects to begin to cut checks the week of September 12. Distribution will take roughly eight weeks after the rollout begins.
Rebates will be sent automatically using the same method original refunds were transmitted if they were sent directly to the taxpayer by the State of Illinois. If direct deposit was used, the individual rebate will be deposited directly into a taxpayer’s account. If there was no refund or a paper refund was issued, the rebate will be mailed to the address on file. Taxpayers who did not receive a refund directly from the State of Illinois, such as those who received an advance of their refund from their tax preparer, will receive a paper rebate check mailed to the address on file.
“Starting tomorrow, every Illinoisan will get tax relief on essentials: groceries, gas, your home, and back-to-school supplies, with even more tax relief going into effect next year,” said Governor JB Pritzker on Thursday. “We are sending $1.8 billion in tax relief to Illinois families — and we are doing that because Democrats balanced the budget, eliminated the bill backlog, and state government is now running a surplus.”
“We prioritized families struggling to make ends meet, the single mom worrying about how she’ll afford school supplies and child care, and the family who feels they can’t catch a break – and we put together a fiscally responsible, compassionate plan to signal to each of those families that their needs are what we are fighting for. Illinois is paying its bills and we are fighting to help struggling families pay theirs as well,” said State Senator Elgie R. Sims, Jr. (D-Chicago).
For additional information, taxpayers may visit IDOR’s website at tax.illinois.gov. Taxpayer representatives can also provide assistance at 1- 800-732-8866 or 217-782-3336.