Giving Seniors a Break on Taxes

icr-logoIllinois taxpayers get a bit of property tax relief through a credit off their income taxes equal to 5% of the taxes paid on their principal residences. For instance, taxpayers paying $5,000 in property taxes will get a credit against their income tax of $250. Not much, but it’s better than nothing.

However, the credit is “non-refundable”, which means that if it exceeds one’s income tax liability, the balance isn’t refunded to the taxpayer. This affects seniors particularly, since a great number of them live on pension and social security income, which is not taxable in Illinois. Thus, most seniors have no income tax liability and do not benefit from the credit.

Until we find a way to reduce property taxes for everyone, I’m making an effort to reduce taxes for those living on fixed incomes with H.B. 3013, which makes the property tax credit refundable for people over 65 whose federal adjusted gross income (the starting point for calculating Illinois income tax) is under $50,000.

While individually this credit usually won’t be much, it may help a senior citizen with an electric bill, some groceries or a prescription. Anyway, we’ll keep taking small steps until we figure out how to provide substantive relief to everyone in the state.

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