Pritzker plans to keep $45 your family should be taking off state taxes
Gov. J.B. Pritzker’s proposed reduction of Illinois’ standard income tax exemption would increase taxes for over 11 million individuals. Some state leaders warn the effective tax hike would hit working families hardest.
Gov. J.B. Pritzker should be letting your family take a $69 state income tax break next year, but instead he wants to keep $45 of it.
That’s because he’s balancing his record $52.7 billion state budget in part by taking away some of the inflation adjustment to which a family of four should be entitled.
He did the same thing last year, taking just shy of $40 from that family.
Pritzker’s recently proposed cut to the state standard income tax exemption in his fiscal year 2025 budget would reduce the deduction for qualifying households from $2,775 per applicable individual to $2,550 for tax year 2024. Those taxes would be due by April 15, 2025, but employers would adjust state income tax withholding this year. Illinois’ fiscal year 2025 runs from July 1, 2024, to June 30, 2025.
The governor’s take-back of most of the inflationary exemption increase would effectively act as a tax hike on more than 11 million individuals. For a family of four, the increase in the exemption should let you keep an extra $69 but Pritzker wants that cut by $45.
To qualify for the standard tax exemption, Illinois residents must earn less than $250,000 individually or less than $500,000 as a married couple.
Pritzker predicts the tax hike would generate $93 million in additional revenue in fiscal year 2025. But Senate Minority Leader John Curran warns it would do so on the backs of Illinois’ working families.
“This is going to hit low-income and middle-income families, and it is a tax increase,” Curran told WBEZ. “If the legislature does not go along with this, people will get a greater tax savings with the current existing law than what the governor has proposed.”
The proposed tax hike comes about a year after Pritzker introduced a 12-month pause on the growth of the state income tax exemption in 2023, which is designed to automatically increase each year with the rate of inflation.
Had Pritzker not paused the inflationary growth of the standard exemption, Illinoisans would have received an exemption of $2,625 per person on their state income taxes in 2023. Instead, Illinoisans were each only able to claim up to $2,425 last tax year, the same nominal deduction they received in 2022. That family’s cost was $39.60 as a result of the state’s action – extra cash the state will get this April 15.
That $200 increase would have marked the largest boost to Illinois taxpayers’ exemptions since the inflationary adjustment’s introduction, based on the decades-high 8% growth in the consumer price index seen during 2022.
Former Illinois Gov. Pat Quinn has since decried the pause to the annual inflation adjustment for the exemption, arguing it robs Illinois families of necessary tax relief at a time of high inflation. Quinn said the adjustment belongs to the taxpayers.
“This is tax relief for moms and dads and children,” Quinn said. “It shouldn’t be taken away any year – any year. It belongs to the taxpayers of Illinois, and the politicians ought to get that message now.”
“Some rob you with a six-gun, and some rob you by a fountain pen,” Quinn said. “We got robbed by a fountain pen.”