Illinois lawmakers have given the green light for a new child tax, targeting families with young children. This decision forms a part of Illinois’ wider scheme to uplift low and middle-income families and rev up the local economy. Let’s look at who can get this tax credit, its amount, and what it could potentially do for the economy.

Who Can Apply?

Families with kids less than 12 years of age can get the Illinois tax credit if they are eligible for the Earned Income Tax Credit (EITC). To be able to apply for EITC at the federal level, families must have certain income levels,

• Married couples should earn around $60,000 or less.
• Single earners should make approximately $50,000 or less based on their number of children.

The IRS website has all additional info you need including eligibility criteria so most families that fall within these income brackets will be eligible for this child tax credit.

How Much is the Credit Worth?

In Fiscal Year 2024, the Illinois child tax credit values for 2024 are,

• Roughly $300 if you file taxes with three kids or more.
• Close to $270 if you file taxes with two kids.
• Just around $170 if you file taxes with one kid.

This tax credit equals 20% of Illinois’ EITC letting state taxpayers claim one fifth of what is permitted at the federal level by EITC rules.

In Fiscal Year 2025 onwards

Starting from fiscal year 2025 the value of Illinois’s version will increase to 40% of its EITC. This means,

• Maximum credit for families with three kids will rise to slightly more than $600.
• The size of child tax credits in future years depends on how the federal EITC is adjusted for inflation.

What Does it Mean for the Economy?

In its inaugural year, $50 million will be needed to fund this program. This spending will increase almost two-fold in later years as the credit value rises.

Benefits and Economic Boost

The benefits of a child tax credit are many proponents argue it lends critical support to low-income families covering their costs like grocery bills, childcare, and car maintenance. This financial help can also boost local economic activity.

Economic Stimulus, Specialists say that every dollar used in the child tax credit triggers around $2.50 in economic activity due to local spending habits, also boosting community businesses and services.

A study by the Illinois Economic Policy Institute ascertained that such credits have a greater impact on economies compared to reducing corporate income and capital gains taxation. This fact underscores their critical role in spurring economic growth and supporting needy families.

Past Talks and What’s Ahead

Proposals from lawmakers, advocacy groups, and think tanks have surfaced over several years advocating a permanent child tax credit measure in Illinois.

Governor JB Pritzker’s Proposal Earlier this year Governor JB Pritzker suggested including a smaller version of this new measure applied only to kids under age three costing near about $12 million even earlier than his eventual approved version.

Possible Future Expansions

A wider child tax credit offer valued at approximately $300 million was put forward by State Senator Omar Aquino (D-Chicago). Even though this proposal did not get approved, Aquino stated that he will continue to study how the current credit is rolled out and probe possible extensions for future budget years. He floated the idea of automatically applying the credit for eligible taxpayers to speed up and simplify the process.

Guidance on Applying

The Illinois Department of Revenue is currently preparing guides for next year’s tax season explaining how to apply for this child tax credit details will be posted on their website.

Claiming your Credit

To get their Illinois child tax credit, qualifying families must file state level income tax returns ticking off their eligibility for federal EITC. Detailed instructions and necessary forms will be made available by the state’s Department of Revenue once tax filing season sets in.

In Summary

The new Illinois child tax credit opens up a crucial avenue to support low to mid income families. Providing up to $300 per kid in 2024 which rises to $600 by 2025 this scheme aims at easing financial strains and bolstering local economies. As legislators and advocates push for improvements there could be lasting dividends both for families and also at the communitywide level from such initiatives. For more info stay updated with announcements from both local Department of Revenue websites as well as guidelines on IRS portals related to federal EITCs.