The Earned Income Tax Credit (EITC) is one of the tax benefits available to taxpayers throughout the year to help keep their money in their own hands, and also reduce poverty levels. Along with the federal EITC, twenty five states (and the District of Columbia) offer a version of their own EITC, including Illinois.
Residents of the state of Illinois may be eligible to claim the state EITC if they qualified for the federal credit, as Illinois follows the same eligibility requirements. The state credit is assessed at a percentage of 10% of the federal credit amount, and is fully refundable. That means an Illinois taxpayer can receive a refund of the credit amount that exceeds their tax liability. A family with zero tax liability will receive the full amount of the EITC as a refund.
Refundability is an asset in ensuring that taxpayers get the biggest advantage of the EITC at tax time, and encourages families to keep working even with low wages. The credit can help cover substantial state and local taxes for lower income Illinois families, and reduce the burden of tax season.
If you are an Illinois resident, be sure to check your eligibility for the state (and federal) EITC and put more of your money in your pocket, where it's needed most.