Illinois Residents to Receive Larger State Tax Credit Next Year
New Budget Allocates $172 Million for Increased Standard Exemption
According to Chicago Sun Times Illinois residents can look forward to a larger state tax credit next year under a new budget awaiting Governor J.B. Pritzker’s signature. The standard exemption a tax credit used by millions in the state will see an increase tied once again to inflation. For the 2024 tax year, the exemption will grow from $2,425 to $2,775 translating to an additional $69 in tax savings for a family of four. This change comes after lawmakers had quietly detached the exemption from inflation last year despite a significant jump in the consumer price index due to COVID-19 pandemic-related supply chain issues.
The new budget which the Illinois House gave final approval to last week, includes $172 million to support the increase in the standard exemption. This is almost double the cost of a more modest increase proposed by Governor Pritzker in February. Initially, the governor suggested raising the exemption to $2,550 costing $93 million but lawmakers opted for a more substantial boost. A spokesperson for Governor Pritzker stated that the budget is balanced and the General Assembly included other revenue proposals and a revenue revision upward, allowing for the larger exemption.
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$275 Tax Break: Illinois Residents to Get Boost in State Tax Credit, Increasing Savings by $69 for a Family of Four-Watch out! (PHOTO: WBEZ Chicago)
Former Governor and Community Leaders Praise Reinstated Inflation-Tied Tax Exemption
Former Governor Pat Quinn, who originally championed the inflation-tied standard exemption in 2011 expressed relief and approval of the change. Quinn highlighted that the standard exemption had been frozen last year effectively taking money out of the pockets of everyday people during a time of high inflation. He praised the move to re-index the exemption to inflation as a necessary measure for fairness and tax relief for Illinois families. Quinn emphasized that this adjustment is crucial for a fair tax system that supports everyday families raising children.
Furthermore, community leaders and financial experts are optimistic that the reinstated inflation-tied standard exemption will provide much-needed economic relief to Illinois families especially those struggling with the rising cost of living. They believe this move will help mitigate the financial strain caused by recent economic challenges, including the pandemic and subsequent inflation spikes. By aligning the tax credit with inflation, the state ensures that residents’ tax burdens do not disproportionately increase due to economic fluctuations. This adjustment is seen as a step toward a more equitable tax system that better supports the financial well-being of all Illinois residents encouraging sustainable economic growth and stability.
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