Legislators, Advocates, Urge Gov. Pritzker to Include Earned Income Credit Expansion in FY22 Budget (Springfield, IL) – Legislators, advocates and community members urged Gov. Pritzker to offer a tax cut for low-income Illinoisans in the State’s FY2022 budget, ahead of his Feb. 2 budget address. Advocates urged the inclusion of a bill (SB3774 Aquino/ HB4920 Ammons) that would expand Earned Income Credit (EIC) eligibility, include a new state Child Tax Credit, and increase the amount of credit available to each low-income filer.
“I am proud to be the chief sponsor of HB4290, a bill that would expand the Earned Income Credit and lift millions of Illinoisans out of poverty by providing low-income people with much-needed tax relief. Illinois’ current tax system is one of the most regressive in the country, blocking over a million of our neighbors from their basic needs in favor of the wealthy few,” said Representative Carol Ammons (D-Urbana). “As Gov. Pritzker prepares the annual budget address, I urge him to put Illinois on the path toward a more equitable tax system by expanding the Earned Income Credit.”
The bill to expand Illinois’ Earned Income Credit (EIC) would offer 4.5 million low-income Illinoisans a tax break. The bill uses the popular and effective tax credit as a vehicle to get more dollars directly into households around the state. For most families, it would mean, on average, $600 in a refund at tax time. The bill proposes expanding eligibility to nearly one million low-income residents who are currently barred from the credit, and then increasing the available credit amount for all recipients.
Similar to the federal EITC, the current state EIC offers income tax relief to most workers earning less than $56,000 per year and would total up to $1,200 in a tax return. The newly filed state bill would expand Illinois’ Earned Income Credit to include groups currently ineligible for the refund—namely, childless workers aged 18-24 and over 65 and immigrants who file taxes with an Individual Taxpayer Identification Number (ITIN). It would also create a statewide Child Tax Credit of at least $600 for parents or legal guardians of children under 17. Finally, over three years, it would increase the credit amount from the current 18% match of the federal EITC to 25%, offering hundreds of dollars more each year to families who need it.
Gov. Pritzker released a statement on Friday praising current state and federal Earned Income Tax Credits and calling on taxpayers to take advantage of existing programs. The Pritzker administration has also spent recent years promoting a joint outreach initiative with the Ilinois Department of Revenue to increase taxpayer participation in the state credit. In 2021, 74,800 Illinoisans claimed a federal EITC credit but did not claim the state EIC, leaving $29.8 million on the table.
“The Earned Income Tax Credit is a huge benefit and puts thousands of dollars in the pockets of low to moderate income families each year,” Gov. JB Pritzker said in the statement Friday. “Even if an individual does not owe any taxes, they may still be eligible for the credit and receive critical funding that can be used for bills and necessities.”
Advocates for SB3774/HB4920 are hopeful that Pritzker signaling support of the existing EITC will translate to him including support for the tax credit’s expansion in next week’s budget address.
“An expanded Earned Income Credit would provide a lot of help for my family, especially as the pandemic has surged again. At this moment, we really don’t have economic security. Food, rent, and utility costs have gone way up this year, and it’s harder to support our children,” said Susana Salgado, a Chicago parent of three and a community leader with Community Organizing and Family Issues’ POWER-PAC. “The governor should make our tax system more fair, particularly for undocumented and mixed status families who are excluded from many government programs. An extra few hundred dollars at tax time would help us to get out of a hole of debt and alleviate our stress.”
The Coalition to Make EIC Work, a project of the Illinois Cost-Of-Living Refund Coalition, is leading the advocacy effort. The coalition includes more than 30 nonprofit, labor, consumer advocate, immigrant rights, and grassroots, community-based organizations across the state.
This bill comes at a time when the state is seeking ways to support communities most impacted by COVID-19. An expansion of the EIC to immigrant families, seniors, and childless young workers would help to strengthen the safety net for the groups left out of federal coronavirus relief programs.
To learn more about the bill, visit the fact sheet at bit.ly/expandEIC22.
Legislators, Advocates, Urge Gov. Pritzker to Include Earned Income Credit Expansion in FY22 Budget