Campaign to Increase Illinois’s Earned Income Tax Credit Gathers Steam

Illinois Senate President Emil Jones and Illinois House Majority Leader Barbara Flynn Currie recently introduced legislation that would increase the size of the Illinois earned income tax credit (EITC). The Illinois EITC is a refundable tax credit for low-wage workers. Families with earnings up to $37,263 qualify, but since the Illinois EITC is set at only 5 percent of the federal EITC, the maximum amount of the credit is $220. Illinois’s EITC is the lowest in the nation.

Jones’s Senate Bill 12 would increase the Illinois EITC to 7.5 percent of the federal EITC in the 2007 tax year and 10 percent in the 2008 tax year and thereafter. Currie’s House Bill 557 would increase the Illinois EITC to 10 percent of the federal EITC in the 2007 tax year, 15 percent in the 2009 tax year, and 20 percent in the 2011 tax year. Sen. Jacqueline Collins, a cosponsor of S.B. 12, also introduced S.B. 339, which is identical to Currie’s bill.

The federal and state EITCs have enjoyed wide bipartisan support over the years. EITCs accomplish many policy goals. They provide a work incentive for the lowest-paid workers, help lift working families out of poverty, and are an economic stimulus to low-income communities. They also bring equity to the tax system by reducing the disproportionate burden imposed on low-income workers through the federal payroll tax and state and local sales taxes.

More than 750,000 Illinois taxpayers benefited from the federal EITC last year. The Illinois Department of Revenue estimates that increasing the Illinois EITC from 5 percent to 10 percent of the federal EITC would cost $77 million.

Seeking expansion of the Illinois EITC—the Make Work Pay campaign—is a coalition, led by Voices for Illinois Children, of more than 25 organizations, including leading labor unions, faith-based organizations, low-wage workers’ advocates, children’s and women’s advocacy organizations, and tax and fiscal policy groups.

For more information about the Illinois EITC, contact Dan Lesser, danlesser@povertylaw.org. If your organization would like to join the Make Work Pay campaign, contact Sean Noble, Voices for Illinois Children, snoble@voices4kids.org.