New Law Raises Earned-Income Tax Credit
Byline: Associated Press
Legislation aimed at helping poor Illinois families keep more of what they earn was signed into law Tuesday, a month after Gov. Pat Quinn signed companion legislation granting tax breaks and incentives aimed at keeping two big employers in the state.
The new law, which is effective for the 2012 tax year, expands the state's earned-income tax credit. It's now 5 percent of the federal credit and will climb to 7.5 percent next year and 10 percent the year after.
State officials said it would eventually translate to an average of about $100 a year per family. Currently about 900,000 families meet income guidelines in Illinois, but some advocates estimated 1 million will qualify this year.
"We can't forget everyday people who are the heart and soul of Illinois," Quinn said at a bill signing ceremony in Chicago. He said the money would stimulate local economies and reward working families.
The new law also would increase the personal exemption by $50 to $2,050. That's the amount of money exempt from state income taxes for each person. The exemption also would increase each year by the rate of inflation.
Quinn demanded tax relief for individuals in exchange for approving the tax breaks for Sears Holdings Corp. and CME Group Inc., which operates the Chicago Mercantile Exchange. It gave him political cover for giving big employers tax breaks in a year when income taxes were raised; he signed legislation last January that raised the personal tax rate to 5 percent from 3 percent.
He approved the law granting hundreds of millions of dollars in incentives and tax breaks for Sears and CEM last month. It renewed a credit Sears has been receiving for years and guarantees the Hoffman Estates-based company a $15 million break on its taxes over the next 10 years and extends a property-tax cut. …