The Tax Reform & Economic Growth proposal increased the Illinois Earned Income Tax Credit (EITC) to 7.5% of the federal Earned Income Tax Credit (EITC) in 2012 and to 10% of federal EITC in 2013. The increase puts $105 million into working families’ pockets, the largest increase in Illinois’ EITC since its inception.
Uniquely pro-growth and pro-family, the EITC is available only to those with earned income and provides incentive to work as well as much-needed tax relief to the lowest-income families. The EITC is a vital anti-poverty program, lifting about 6 million people, including 3 million children, out of poverty in 2010. The additional boost families can receive from the federal and state EITC can assist them with supporting their children during periods of difficult economic stress.
The EITC also boosts local economies through increased consumer demand. It puts more money in the pockets of everyday working people, and allows them to invest that money back into their local neighborhoods and economies. Studies have found that every dollar a family saves through this tax credit translates into additional activity in local economies.