Earned Income Tax Credit (EITC)

Rate (Fully-Refundable): 14% of the federal credit, will increase to 18% in January 20181

Eligibility Requirements: All Illinois taxpayers who qualify for the federal credit are automatically eligible.

Latest Legislative Action: In July 2017, the Illinois legislature passed a state budget that included expanding the state’s EITC to 14% of the federal credit, retroactive to January 1, 2017, and then to 18% of the federal credit in January 2018.

Notes:

  • In trying to resolve the state’s budget stalemate, legislators introduced 12 tax bills that would work together to both reduce spending while not disproportionately harming low-income workers and families. The bills, which lawmakers have dubbed “The Grand Bargain,” include one that would increase the state’s Earned Income Tax Credit (EITC) from 10 to 20 percent of the federal credit. It remains unclear whether the package will pass the House and Senate.
  • Illinois’s state EITC began at 5% of the federal credit when it was introduced in 2011 and was increased to 10% in 2013.2
  • In 2014, the Center for Economic Progress, Office of Chicago Mayor Rahm Emanuel, Chicago Housing Authority and the University of Illinois at Urbana-Champaign launched the Periodic Earned Income Tax Credit Payment Pilot Project, a year-long pilot program to provide quarterly advance EITC payments to a cohort of 343 households.3 Participants in the program reported feeling increasingly financially stable and were able to reduce their number of payday loans roughly by half. Read the full results of the project here.

Child Tax Credit (CTC)

Illinois does not currently offer a state-level CTC.

Child and Dependent Care Tax Credit (CDCTC)

Illinois does not currently offer a state-level CDCTC.

Illinois Tax Credits In The News

10

Jul 17

News Round-up: July 10, 2017

Later today, Hawaii Governor David Ige (D) is expected to sign into law a bill that establishes a nonrefundable state-level Earned Income Tax Credit (EITC) worth 20 percent of the federal credit.
Read More

3

Jul 17

News Round-up: July 3, 2017

Senator Marco Rubio (R-Fla.) and other lawmakers met with Ivanka Trump to discuss expanding the Child Tax Credit (CTC) as part of upcoming tax reform. An administration official has since indicated that the credit will be part of a proposal that the White House's National Economic Council puts forward.
Read More
1 2 3 4
For More State Information:

Kelley Talbot, Assistant Policy Director
Voices for Illinois Children
www.voices4kids.org
312-516-5572
ktalbot@voices4kids.org

Sources:
  1. 2015 Schedule ICR, Illinois Department of Revenue
  2. SB 0400, 97th Illinois General Assembly
  3. Periodic Earned Income Tax Credit (EITC) Payment Pilot Project, Center for Economic Progress