Illinois lawmakers call for statewide child tax credit to help thousands of families

Following federal action in enhancing the child tax credit, state lawmakers and advocates are renewing their calls to install a similar benefit for Illinois families.

State Rep. Marcus C. Evans, Jr., D-Chicago, filed the most recent proposal Wednesday. House Bill 4917 sets a lower threshold at $300 per child starting in 2025 and then have an inflation-adjusted amount in subsequent years.

Illinois would become the 14th state to pass a statewide child tax credit, which its supporters say will assist thousands of low-income families particularly those of color. The price tag, however, is estimated to run the state $300 million.

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"It's not just about the dollars, but it's in the stimulus in our local economy that is going to be the real catalyst for this," Evans said during a press conference.

Creating a statewide child tax credit has been an effort years in the making. This session, several legislative proposals have been filed in the Illinois General Assembly, one of which offers a tax credit of up to $700 per qualified dependent — another Evans-led initiative.

Erion Malasi, policy and advocacy director for Economic Security for Illinois, said the reduced amount was set after conversations with the governor's office and is confident Gov. JB Pritzker will approve the measure. Alex Gough, a spokesperson for the governor's office, said in an email that Pritzker would review the legislation if it makes it to his desk.

Households filing jointly and earning less than $75,000 per year and individuals earning less than $50,000 would be eligible for the full credit. According to a study published by the Illinois Economic Policy Institute and the Project for Middle-Class Renewal at the University of Illinois, a $300 tax credit would apply to 840,100 children in the state and decrease childhood poverty by more than 3%.

Affording the tax credits, however, will be further challenged as expenditures are expected to surpass revenues in fiscal year 2025. Per the Governor's Office of Management and Budget, the state is estimated to face a $891 million deficit.

Malasi noted the $300 million cost would be less than 1% of the total budget.

Last week, the U.S. House of Representatives passed a bipartisan tax package including an expansion of the federal child tax credit. It awaits a vote in the Senate.

The Associated Press reported passage of the bill would incrementally raise the amount of the credit available as a refund, increasing it to $1,800 for 2023 tax returns, $1,900 for the following year, and $2,000 for 2025 tax returns. The bill also adjusts the topline credit amount to temporarily grow at the rate of inflation.

Still, Rep. Mary Beth Canty, D-Arlington Heights, noted the federal credit would be less than the prior amount — $3,600 annually for children under age 6 and $3,000 for children ages 6 to 17 — set during the COVID-19 pandemic. The reduction makes a state credit all the more necessary, she said.

"By passing a state tax credit, we can make sure that no family is without the support it needs federal program or not," Canty said.

U.S. Rep. Nikki Budzinski, D-Springfield, supported the tax credit, saying it would benefit thousands of families in the Illinois 13th Congressional District.

"We need to continue addressing the child tax credit and make sure it's fully funded," she said at an unrelated event at Hazel Dell Elementary School last week. "The extension, while not as complete as we wanted, is going to help about 16 million (nationwide)."

Lawmakers are pushing for several other tax credits early in the spring session, including one for employers if they help their employers cover student loan debts.

Pritzker is putting together his State of the State and budget address, outlining his spending priorities for the upcoming fiscal year. He will address the legislature at the state Capitol on Feb. 21.

Reporter Claire Grant of The State Journal-Register contributed to this report.

Contact Patrick M. Keck: 312-549-9340, pkeck@gannett.com, twitter.com/@pkeckreporter.

This article originally appeared on State Journal-Register: Illinois lawmaker proposes a child tax credit