CHICAGO (WAND) -Low-to-moderate-income Illinois taxpayers will not have unpaid fines deducted from their state income tax refunds this year, Illinois State Comptroller Susana A. Mendoza announced Monday.
“Families on the edge are counting on their state income tax refunds to pay bills they have been putting off as COVID-19 cost them jobs or increased their medical bills,” Comptroller Mendoza said.
The goal is to provide relief to families that are struggling the most from the pandemic.
Statewide, Earned Income Tax Credit eligible taxpayers will have access to an estimated $15 million that would have been intercepted.
“I applaud Comptroller Mendoza for creating welcome financial relief for our working families in Chicago and across Illinois,” Chicago Mayor Lori Lightfoot said. “These families have carried the heaviest burden from the COVID-19 crisis with hours cut and jobs lost, and with it, the health care, transportation, and other essentials we rely on to live our daily lives. As we move to put this terrible pandemic behind us, we must do everything in our power to ensure our recovery is equitable and brings everyone into to the success we hope to all share.”
The Illinois General Assembly gave cities around the state the right to contract with the Comptroller’s office to withhold unpaid traffic and parking ticket fines, and other court judgments from state income tax returns and send those to the towns.
A year ago, Comptroller Mendoza announced the office would no longer withhold unpaid red-light camera ticket fines from taxpayers’ income-tax refunds.
For this tax year, the office will not offset tax refunds going to families or individuals who qualify for the state Earned Income Tax Credit. For the current tax year (2020), a family of four earning $56,844 a year or less or a single person earning $15,820 a year or less qualifies.
If you do not earn income and file a tax return, this policy will not affect you.
“Key to combatting structural inequity is to put more money in the pockets of lower income folks, who are disproportionately people of color. In our economy, wealth creates wealth. Protecting the tax refunds of lower wealth families gives them a chance to build a better life for themselves and their community,” said Brent Adams, senior vice president of policy and communication of Woodstock Institute.
The policy change could affect 41,000 households of the roughly 1 million across the state that qualify for the EITC.
