Lawmakers call for $300 child tax credit in Illinois

Congress may be closer to a deal on a child tax credit, but that doesn’t stop Illinois from considering its own child tax credit program. Illinois’ child tax credit, if approved, would provide $300 to working and low-income families. Researchers believe a child tax credit would significantly reduce the number of children living in poverty and help stimulate the economy.

How much money should you expect?

Lawmakers are considering a proposal in Illinois that would provide $300 to qualifying families through a child tax credit. The proposal is a scaled-down version of a bill introduced last year by Sen. Mike Simmons.

Simmons’ proposal calling for a $700 child tax credit was submitted to the Illinois Senate last year and is still under consideration. A similar bill has been filed in the state House.

“We know that the expansion of the federal child tax credit during the pandemic lifted millions of children out of poverty. And we know that if we pass a statewide child tax credit, nearly half of all Illinois children will benefit from economic relief for parents across the state. It’s time to create a child tax credit for Illinois,” Senator Simmons said last year.

Simmons’ proposal (Senate Bill 1444) calls for providing a tax credit of $700 to eligible low- and moderate-income families for each child under 17 years of age. This proposal is for single filers earning less than $50,000 and joint filers earning less than $75,000. The credit is reduced by $24 for every $1,000 you earn over the threshold.

An analysis by the Illinois Economic Policy Institute found that the child tax credit could reduce child poverty in the state by 7.6 percent. About 15.7% of children in the state live in poverty, according to the Annie E. Casey Foundation.

Why is the child tax credit being discontinued in Illinois?

The expansion of the federal child tax credit introduced during the COVID-19 pandemic has led several states to implement permanent or temporary child tax credits in recent years.

According to the U.S. Census Bureau, the expanded Child Tax Credit lifted more than 2 million children nationwide out of poverty. The extended credit expired long ago, but efforts are now underway to restore it, at least partially.

Illinois, like many other states, could establish its own child tax credit program, but many are concerned about the cost of the program. Supporters of the child tax credit argue that the program’s costs would be offset by a potential reduction in government support for low-income families.

Simmons’ proposal would cost the state $1 billion annually. In contrast, a proposal supporting a $300 child tax credit is estimated to reduce child poverty by 3.3 percent and cost $470 million.