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.
By Patrick Andriesen | Illinois Policy Institute
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.”
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