$700 New Illinois Child Tax Credit May Soon Be A Reality

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The Illinois Senate recently approved Gov. J.B. Pritzker’s proposed 2025 Fiscal Year budget. The proposed budget, among other things, includes a new Illinois child tax credit for families with children 12 years old and younger. The budget will take effect on July 1 provided it is approved by the House, which will reconvene on Tuesday to finish their work for this session.

2025 Fiscal Year budget: what does it include?

On Sunday night, the Democrat-run Illinois Senate approved the proposed $53 billion budget with a vote of 38-21. No Republicans voted for the budget, arguing that it prioritizes noncitizens and raises spending.

Illinois expects to raise $43 billion in individual, corporate, and sales taxes, while the remaining will come from other sources, including lottery and gambling revenue. The budget will raise $870 million more in taxes from residents, the majority of which will come from sports betting in the form of an increased tax rate from 15% to 35%.

The proposal includes $182 million to cover the cost of shelter and other services for new migrant arrivals from Texas. Also, the budget sets aside $440 million for a Medicaid-style health benefit plan for noncitizens and $10 million for a new program that will pay off the outstanding medical debt of low-income residents to collection agencies.

Gov. Pritzker’s budget proposal calls for eliminating the 1% grocery tax starting Jan. 1, 2026, as well as sets aside $10 million for “food deserts in underserved communities.” Since some municipalities rely heavily on the grocery tax revenue, the proposal does give local governments until 2026 to come up with their own tax.

The budget also sets aside $23 million to reduce the deaths of Black women during pregnancy. Due to inequalities in healthcare education and accessibility, Black women are estimated to die at a rate three times more than White women because of pregnancy-related causes.

New Illinois child tax credit: how much could you get?

The proposed new Illinois child tax credit will cost the state $50 million. The program will offer $700 in tax credits to families with each child 12 and under. According to a study by the Illinois Economic Policy Institute, the new Illinois child tax credit could reduce childhood poverty by 7.6%.

Gov. Pritzker’s budget proposal also raises funding for the Smart Start Illinois initiative from $200 million to $400 million for 2025. The program includes three main initiatives, including creating 20k new preschool seats, expanding access to home visiting and early intervention services, and increasing wages for childcare workers.

To make Illinois a hub for the future of artificial intelligence development, the budget sets aside $500 million to boost quantum computing. The fund will be used to develop a quantum campus in partnership with the University of Illinois, the Chicago Quantum Exchange and the University of Chicago.

Some money will also be used for establishing a cryogenic facility for computers, as well as towards site preparation and infrastructure for the technology hub.