CHICAGO — People in Illinois can expect a bit of a break when it comes to sticker shock, both in stores and at the pump. Starting July 1, the Illinois Family Relief Plan will go into effect, providing relief on the grocery tax, gas tax, and property taxes.
Gov. JB Pritzker says the $1.8 billion in relief, including income and property tax rebates and a temporary cut in several sales taxes, is possible due to Democrats balancing the budget, eliminating the bill backlog, and starting to run a surplus.
“In challenging times like these, it’s more important than ever to have a government whose first focus is on working families and those who are struggling, and leadership that provides new and creative ways to deliver relief when you need it most,” said Governor JB Pritzker.
Lt. Gov. Juliana Stratton noted she wants the people in Illinois to know they are not on their own during this period of historic inflation rates.
“This $1.8 billion in tax relief ensures that Illinoisans in every community, rural and urban, are seen and supported. When our residents are feeling the weight of buying food, gas, and making ends meet, Illinois acts to ease the burden.”
The Family Relief Plan includes several tax holidays, meaning a temporary cut in taxes, including:
- Groceries: The state’s 1% sales tax on groceries will be suspended July 1 through June 30, 2023, saving consumers $400 million.
- Gas: The state’s normally scheduled increase in the motor fuel tax will be delayed from July 1 to January 2023, saving consumers $70 million.
- School supplies: Sales taxes for qualified clothing and school-related items will be reduced from 6.25% to 1.25% for a 10-day window from August 5 to 14, saving consumers $50 million.
Items include qualifying clothing and footwear with a retail selling price of less than $125 per item. Eligible school supplies are not subject to the $125 threshold.
In addition, the plan permanently expands the state’s earned income credit from 18% to 20% of the federal credit, while expanding the number of households covered, putting an additional $100 million per year back into the pockets of working families who need it the most.
The State of Illinois is also providing property tax rebates for eligible homeowners in an amount equal to the property tax credit they qualified for on their 2021 Illinois tax returns, up to a maximum of $300. The rebate is not allowed if a taxpayer’s adjusted gross income for the taxable year exceeds $500,000 for returns with a federal filing status of married filing jointly, or $250,000 for all other returns.
Additionally, individuals who made less than $200,000 in 2021 will receive $50 income tax rebates. Couples filing jointly with incomes under $400,000 will receive $100. Tax filers will also receive $100 per dependent they claimed on their 2021 taxes, up to three dependents.
Income and property tax rebates will be automatically issued to all of the estimated 6.2 million taxpayers who qualify under the Family Relief Plan based on information included in their submitted 2021 tax returns. Comptroller Susanna Mendoza will issue the rebates and expects to begin to cut checks the week of September 12. Distribution will take roughly eight weeks after the rollout begins.
Taxpayers who did not file their 2021 IL-1040 individual income tax returns but want to claim the individual income tax rebate, both the property tax and individual income tax rebates, or solely claim the property tax rebate, can do so. The Department of Revenue will provide an online submission form via the website listed below.
Rebates will be sent automatically using the same method original refunds were transmitted if they were sent directly to the taxpayer by the State of Illinois. If direct deposit was used, the individual rebate will be deposited directly into a taxpayer’s account. If there was no refund or a paper refund was issued, the rebate will be mailed to the address on file. Taxpayers who did not receive a refund directly from the State of Illinois, such as those who received an advance of their refund from their tax preparer, will receive a paper rebate check mailed to the address on file.
For additional information, taxpayers may visit the Illinois Department of Revenue website at tax.illinois.gov. Taxpayer representatives can also provide assistance at 1-800-732-8866 or 217-782-3336.