The Illinois Family Relief Plan, which was approved by state lawmakers in April, went into effect July 1.
The relief measure provides roughly $2 billion in gas tax, grocery tax and property tax relief for Illinois residents as inflation reaches record highs. In May, the annual inflation rate reached 8.6%, the highest level since 1981, according to the Bureau of Labor Statistics.
In a recent statement announcing the tax relief, Illinois House Speaker Emanuel “Chris” Welch (7th) said the plan “helps to ease inflationary pressures felt by families across this state at a time they need it most.”
Welch added that the state’s six credit upgrades, a reduction in backlog bills and an increased rainy day fund puts the state in a position to provide the relief.
In the statement, the Speaker’s office broke down the key benefits in the relief package.
“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.”
The relief package also “permanently expands the state’s earned income tax credit from 18% to 20% of the federal credit, while expanding the number of households covered. This puts an additional $100 million per year back into the pockets of working families who need it the most,” Welch said.
In addition to the tax relief aspects of the package, property tax rebates up to $300 will be issued for those homeowners who qualify for them and residents who made less than $200,000 in 2021 will receive $50 income tax rebates. Couples filing jointly who made less than $400,000 will receive $100.
Tax filers will also get $100 per dependent they claimed on their 2021 taxes, up to three dependents, Welch stated.
“These rebates will be automatically issued to an estimated 6.2 million taxpayers who qualify under the Family Relief Plan based on information included in their 2021 tax returns,” the Speaker explained.
“These rebates are expected to be sent beginning in mid-September. Eligible taxpayers who did not file their 2021 IL-1040 individual income tax returns but want to claim the rebates, can do so. The Department of Revenue will provide an online submission form at www.tax.illinois.gov.”