Less than a week away from the April 17 tax filing deadline, Gov. Pat Quinn urged working families to learn about tax relief available to them in Illinois and get the assistance they need to file their taxes.
Less than a week away from the April 17 tax filing deadline, Gov. Pat Quinn urged working families to learn about tax relief available to them in Illinois and get the assistance they need to file their taxes. The governor continued his drive to get the word out about Illinois’ EITC at Harold Washington College, which serves as a tax assistance center organized by the Center for Economic Progress (CEP). CEP President and CEO David Marzahl joined the governor and representatives from Walmart, who also announced a major donation to CEP to provide free financial services to working families.
“Too many families do not receive the tax relief they deserve simply because they don’t have the information and means to access it,” Gov. Quinn said. “We want our working families to know about the Center for Economic Progress and Illinois’ Earned Income Tax Credit, which will support economic growth and help them keep more of what they earn.”
Earlier this year, Gov. Quinn signed a tax relief law to help working families across the state and grow the Illinois economy. The Illinois Earned Income Tax Credit law doubles the state’s Earned Income Tax Credit (EITC) over two years, saving low-income workers an extra $105 million per year and helping almost a million families who filed it. The new law also benefits all Illinois taxpayers by raising the value of the personal exemption and indexing it to inflation.
To benefit from Illinois’ EITC, also known as the Earned Income Credit (EIC), taxpayers must include it on their tax returns. While more than 2.5 million state residents benefited from the Illinois EITC in 2010, many people who are eligible for the state’s EITC don't file for it. The not-for-profit CEP estimates that between 10 and 20 percent of eligible taxpayers did not file for EITC last year. At the event, representatives from Walmart announced a $50,000 donation to CEP to provide more free tax preparation and other financial services to low-income working families.
“At the Center for Economic Progress, it’s our mission to continue providing important tax and financial services to hard-working, low-income families in Illinois,” said Dan Nielsen, Chairman of the Board of Directors at the CEP. “That’s a mission made possible because of the investments of companies like Walmart and the ongoing support of Gov. Quinn.”
About the new Illinois EITC Law:
The new law marked the largest increase in Illinois’ EITC since its inception in 2000, by phasing in a 5 percent increase over two years. The law boosts the state’s EITC from its current level at 5 percent of federal EITC, to 7.5 percent in tax year 2012 and 10 percent of federal EITC in tax year 2013. More than 2.5 million state residents benefited from the Illinois EITC in 2010.
Under the new law, a single mother with one child, earning minimum wage ($12,800 a year), will save $154 on her taxes. A married couple with three children earning $30,000 a year will save $199 on their taxes this year.
Uniquely pro-growth and pro-family, the EITC is available only to those with earned income and provides incentive to work as well as much-needed tax relief to the lowest-income families. EITC also boosts local economies through increased consumer demand. A 2006 Brookings Institution study found that every dollar a family saves through this tax credit translates into $1.58 of activity in local economies.
The law also improves the value of the standard personal exemption for all taxpayers in Illinois and ties its continued growth to the rate of inflation. The personal exemption will increase by $50 (to $2,050) in tax year 2012, and the value of the exemption will be indexed to the cost of living adjustment each tax year thereafter. The personal exemption change benefits all taxpayers, regardless of income.