Temporary tax savings associated with the Illinois Family Relief Plan begin July 1.
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;
- Gas: The state’s normally scheduled increase in the motor fuel tax will be delayed from July 1 to January 2023;
- 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.
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.
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.
