Illinois taxpayers can expect to see more money in their pockets following a boon from the lawmakers in Springfield. According to a recent report by The Chicago Sun-Times, the new state budget, which is awaiting Gov. J.B. Pritzker's signature, includes an expanded standard tax exemption. This adjustment will increase the exemption from $2,425 to $2,775 for 2024, aligning it once again with inflation rates.
The move is set to benefit millions and comes after last year's decision to detach the credit from the inflation rate, leading to a debated freeze in the amount. With the consumer price index showing one of its steepest increases in decades, this policy shift means more substantial tax savings for families. For example, a family of four could save over $69 more than last year. But the generosity comes at a significant cost to the state, with the new exemption price tag at an estimated $172 million—almost twice the $93 million cost for the modest increase that Pritzker initially proposed.
Alongside the tax exemption change, lawmakers also finalized a $53.1 billion budget that earmarks $50 million for a new state-level child tax credit, as reported by WTTW News. This significant fiscal push factors in support for low- and middle-income families contending with the rising cost of living. Parents at or below the state median income can anticipate a tax credit for children under 12 that averages between $300 and $600 per child.
With the child tax credit poised to affect upwards of 840,000 households, advocates argue this is a substantial step toward alleviating childhood poverty and, by extension, improving the state's economic vitality. Ameya Pawar, a senior advisor at Economic Security Project and former Chicago alderperson, told WTTW News that providing these funds means parents won't have to "choose between buying diapers, or putting food on the table, or buying books." Pawar further emphasized the cyclical benefits of reducing childhood poverty, which can ultimately foster more significant economic development and job creation.
As the budget process rounds its final corner, Illinois seems geared to make financial strides for its families. Former Gov. Pat Quinn, who championed the indexing of tax laws to inflation, was quoted by The Chicago Sun-Times commending the return to a system that properly accounts for inflation, hence putting money back into the pockets of "everyday people." Juliet de Jesus Alejandre, Executive Director of Palenque LSNA, likewise highlights the importance of the move, telling WTTW News, "This is a move towards stability that people need." As Illinois navigates the terrain of economic recovery and growth, these tax adjustments could serve as a foundational stone for families braving the uncertain currents of a post-pandemic economy.
