( MENAFN - ValueWalk) The Illinois House last week approved the $53.1 billion state budget that, among other things, makes one tax credit more generous. This bigger tax credit from Illinois, called the standard exemption, will allow families to save around $69.
The budget proposal is awaiting Gov. J.B.
Pritzker 's approval. The standard exemption has been increasing annually since 2011 to match the increase in inflation. Last year, lawmakers quietly reduced this tax credit by detaching it from inflation, following a significant jump in the consumer price index (CPI) due to COVID-19 pandemic-related supply chain issues.
However, the 2025 spending plan the House approved last week resumes funding to connect standard exemption to inflation, resulting in a bigger tax credit. Under the new spending plan, taxpayers will be able to claim a standard exemption of up to $2,775 for tax year 2024, up from $2,425 in 2022 and 2023. It will mean a tax savings of more than $69 for a family of four.
This bigger tax credit from Illinois is estimated to cost $172 million, almost double the modest increase in the standard exemption that Gov. Pritzker proposed in his 2025 budget plan in February. Gov.
Pritzker, in his budget proposal, asked the lawmakers to raise the exemption to $2,550. Such a raise would have cost about $93 million. If the lawmakers hadn't changed the standard exemption to match the increase in inflation last year, it would have been $2,625 in 2023.
It would mean an 8% increase.
