First-ever state child tax credit levels the playing field for Illinois families

All families deserve to live in dignity and see their children thrive. A coalition that includes the Shriver Center on Poverty Law won a major victory for Illinois families this legislative session with passage of the state’s first-ever child tax credit. Come tax season, qualifying families will receive up to a $300 credit to spend on school supplies, food, or whatever they see fit. The extra money will reach more than 800,000 Illinois kids in low- and middle-income households.

During the COVID-era, the expanded federal child tax credit nearly cut child poverty in half. “The Illinois version is permanent and will help the state’s most vulnerable populations. I’m thinking specifically about communities of color and under-resourced rural counties,” said Jeremy Rosen, director of economic justice at the Shriver Center.

The benefit applies to families with children younger than 12 that earn less than $60,000 a year. The money is tied to the earned income tax credit (EITC). For this tax year, qualifying families will receive a child tax credit equivalent to 20 percent of their EITC. That amounts to $50 million in tax credits for low- and moderate-income families in 2025. In subsequent years, the total is $100 million back — a credit worth 40 percent of their EITC — with a cap of roughly $600 per family.

Illinois joins over a dozen states to pass their own child tax credit. The measure is part of a growing trend to put money in the hands of families who need it the most. “We support the state child tax credit and direct cash payments because people make good decisions for themselves and their families when they have the economic resources to do so,”Rosen said.

The Shriver Center is a member of a new statewide coalition called Fund our Futures, which outlines a path toward a more equitable Illinois through progressive taxation. “What we did this year with the child tax credit is part of the coalition’s larger vision,” Rosen said.

Fund our Futures’ recent report envisions a state that offers direct cash payments like guaranteed income, well-funded public schools, and health care for all. The coalition wants to eliminate revenue from fines and fees and regressive taxes that punish people living in poverty; it instead identifies ways to make the wealthy and corporations pay their fair share.

The budget that Gov. J.B. Pritzker signed into law last month is a step in the right direction. The state wiped away millions in medical debt and eliminated the state grocery tax. The $53.1 million budget was funded partly through closing corporate loopholes and taxing online gambling platforms.

Although the state child tax credit is part of the Shriver Center’s broader economic vision for Illinois, we have more work to do. Our original proposal intentionally did not tie the child tax credit to the earned income tax credit. This version would’ve allowed people with non-wage income, such as disability or other forms of federal assistance, to quality. The Shriver Center opposes tying the child tax credit to the EITC because it holds too many Illinois families back from meeting their basic needs and getting ahead.

A family’s source of income should never stop them from receiving needed benefits. The Shriver Center will fight for a more inclusive child tax credit and a more equitable tax system to finance a better future. “We’re just getting started with the state child tax credit. In the next legislative session, we’ll push for progressive revenue solutions to level the playing field for Illinois families,” Rosen said.