As tax season gets under way, Gov. Pat Quinn is encouraging workers across the state to apply for the increased Earned Income Tax Credit and to take advantage of free tax preparation services.
The EITC is a tax break for individuals and families with low to moderate wages, and it can be claimed at the federal and state level. Last year, Quinn signed a bill that doubles the Illinois EITC over the next two years.
“It’s been called the best way to alleviate poverty,” Quinn told the Defender. “This is tax relief to working families.”
Millions of taxpayers in Illinois qualify for the EITC, but many don’t receive it. To get the benefit, workers must file their federal and state tax returns and apply for the credit.
“Unfortunately, as many as 20 percent of the people who are eligible don’t apply and they leave money on the table,” said Quinn.
The governor addressed a full house Sunday at Apostolic Church of God in the Woodlawn community and urged people to file their tax returns and claim the EITC. Invoking the messages of Martin Luther King Jr. and the Bible’s Old Testament book of Amos, Quinn said the credit is one way to help the poor workers in the state.
“We want to alleviate poverty,” he told the congregation. “That’s a biblical injunction.”
A worker with no children who made less than $13,980 in 2012 can claim the EITC. A single parent who has at least three children and earned less than $45,060 is also eligible.
Married couples must file jointly to claim the credit. Those with no children who made less than $19,190 are eligible, and couples with three or more children are eligible if they earned less than $51,567 combined.
The two-part tax legislation last year that included the EITC increase was not without its critics. The package also gave tax breaks to Sears, the Chicago Mercantile Exchange and the Chicago Board Options Exchange after the corporations said they would leave the state.
The Make Wall Street Pay Illinois coalition was among the vocal opponents of the accompanying bill saying that it was a sign of the excessive influence companies have on the legislative process.
The group also said the EITC bill was tacked on to sweeten the corporate tax break deal.
“We are for the EITC,” said David Hatch of the coalition. “We just don’t feel like you should give the whole store away for it.”
This year, a single parent with one child who earned $12,800 will save $154 on state income taxes, according to the governor’s office. A married couple with three children who made $30,000 combined will save about $200.
Sophia Rush is an example of someone the governor says he is trying to reach. She is a 30-year-old divorced mother of four children in elementary school. She currently works as a grocery store clerk in the city’s Uptown neighborhood. She said it is tough to make ends meet and welcomes any amount of tax relief.
“I am in debt taking care of four kids, paying bills – light, gas, rent. Just regular expenses,” she said. “It’s so expensive. Ridiculously expensive.”
Still, she said she is not convinced the state increase will make that much of a difference.
Quinn says the tax relief is the largest improvement of the state EITC since it was enacted in 2000. A taxpayer who qualifies for the federal earned income credit can now claim as much as 7.5 percent of that credit on their state return. After 2013, the claim increases to 10 percent.
“A lot of folks have bills to pay. We want to make sure they get that opportunity to get the tax refund they’re entitled to by law,” he said.