Retirees Not Invited to State's Tax Rebate Party Checks Based on Taxable Income Only, Officials Say
Patterson, John, Daily Herald (Arlington Heights, IL)
SPRINGFIELD - Joyce Wagstaff peeked into her mailbox to find the usual assortment of campaign literature, junk mail and bills.
One thing the 64-year-old Buffalo Grove woman didn't find was an income tax rebate check from the state. And neither will anyone else living off retirement or disability income.
"It's such a joke," said Wagstaff, who has lived in her home and paid property taxes for 42 years, but whose only income comes from Social Security. She called the rebate plan a "selfish" idea put forth by "politicians who want to look good in the eyes of some of their constituents."
Last week, the state began mailing the first batch of what will be more than 2 million rebate checks. Barring a postal meltdown, suburban homeowners should have begun receiving those checks, with the rest of the state to follow over the next few weeks. In all, $280 million is being sent back to taxpayers. The average rebate will be $125; the maximum is $300.
The rebates are part of $350 million in tax cuts approved by the legislature during the spring session. The money comes from tobacco companies. Illinois was one of 46 states that filed a class-action lawsuit against the companies in 1996 seeking to recoup money spent on health care for people with smoking-related illnesses. The companies settled out of court, and over the next 25 years Illinois is scheduled to receive $9.1 billion.
But as the rebate checks are being mailed, people in situations similar to Wagstaff's are learning they are not included. And many are not happy.
Gov. George Ryan's office has received one complaint, spokesman Nick Palazzolo said. "It came from a senior who felt he was being left out of the mix," Palazzolo said.
Nearly two dozen calls had been logged by the Illinois Department of Revenue, "nearly all from people who will not get checks," spokesman Mike Klemens said.
State Sen. Wendell Jones, a Palatine Republican, has received a combined 10 letters and phone calls, in addition to people coming to his office.
"Whenever you do a tax cut, you have to leave somebody behind," Jones said. "I apologize when they call me. A guy living in his own home, paying $3,000 to $4,000 in real estate taxes, we ought to be able to get that guy some kind of rebate."
The reason people in this situation don't receive a rebate is rather simple. They didn't pay state income taxes to begin with.
"Seniors do get the ultimate tax break in that their pension income is not taxable," said Gregg Durham, spokesman for House Republican Leader Lee Daniels of Elmhurst.
To simplify the rebate process, the rebate amount is taken straight from state income tax forms. The rebate is equal to the 5 percent credit for property taxes that homeowners can claim on their state income taxes. The state looks at that line, and writes a check for that amount up to $300.
Because most retirement and disability income is not taxed in Illinois, these people don't file income tax forms and there's no amount to rebate.
"I would hope you would not have seniors complaining about not getting a tax rebate for a tax they never paid," said state Sen. …