As tax season approaches, many Illinois residents may be overlooking valuable state tax credits that could save them money on their 2024 tax returns. Whether you’re a homeowner, renter, student, or business owner, there are several credits available that can significantly reduce the amount of taxes you owe. Here’s a guide to some of the most commonly missed Illinois tax credits and how you can take advantage of them this year.
1. Illinois Property Tax Credit
For homeowners, the Illinois Property Tax Credit is one of the easiest ways to reduce your state income tax. This credit is designed to provide relief to Illinois residents who pay property taxes on their primary residence. To qualify, you must have paid property taxes on your home during the tax year, and the property must be located in Illinois. The credit can be up to 5% of the amount you paid in property taxes, with a maximum credit of $750.
This credit is often overlooked by homeowners who don’t realize they are eligible or forget to apply for it when filing. If you paid property taxes on your home in 2024, make sure to claim this credit when filing your Illinois state tax return.
2. Earned Income Tax Credit (EITC)
The Illinois Earned Income Tax Credit (EITC) is a refundable credit that helps low-to-moderate-income workers. If you qualify for the federal EITC, you may also be eligible for the state version, which can provide a significant boost to your refund. In Illinois, the state EITC is worth 18% of the federal EITC, meaning you could see a larger refund if you meet the income qualifications.
Many eligible workers fail to claim the EITC because they aren’t aware they qualify, or they don’t file a tax return. However, even if you don’t owe taxes, you can still receive a refund through this credit. Be sure to check if you qualify based on your income and family size.
3. Renter’s Tax Credit
While homeowners are often aware of property tax credits, renters may not realize that Illinois offers a tax credit for them too. The Illinois Renter’s Tax Credit provides relief for renters who meet specific income requirements. To qualify, your total household income must be under a certain threshold, and the rent you paid must exceed a specific amount.
This credit can provide up to $100 in tax savings, and it’s often overlooked by renters who don’t realize it applies to them. It’s worth checking if you meet the eligibility requirements when preparing your tax return.
4. Education Expense Credit
Illinois offers a credit for qualifying education expenses paid by families with children attending kindergarten through 12th grade. The credit can be up to $750 per child, depending on the amount you spent on tuition, books, supplies, and other qualifying educational expenses.
This credit is especially beneficial for parents of students attending private or parochial schools, as it helps offset the cost of education. Even if your child attends a public school, you may still be eligible if you incurred out-of-pocket expenses for things like uniforms, field trips, or extracurricular activities.
5. Child and Dependent Care Credit
If you paid for child or dependent care in order to work or look for work, you may qualify for the Illinois Child and Dependent Care Credit. This credit is available to individuals who incur expenses related to caring for children under the age of 12 or other dependents who are physically or mentally incapable of self-care.
The credit is based on the amount of qualifying expenses you paid, and it can be a valuable tool for working parents. Be sure to keep track of your childcare expenses throughout the year, including receipts for daycare, after-school programs, or even care provided by a relative or family member.
6. Illinois Tax Credit for Teachers
Teachers and other education professionals may be eligible for a state tax credit for unreimbursed expenses related to classroom supplies. If you’ve spent your own money on materials like books, teaching aids, or technology for your classroom, you can claim a credit of up to $250 for these expenses. This credit is available to full-time teachers, instructors, counselors, principals, and aides who work in schools located in Illinois.
Many teachers fail to claim this credit because they don’t realize they’re eligible or forget to include these expenses when filing their taxes. If you’ve spent money on supplies for your classroom, make sure to take advantage of this credit.
7. Business Tax Credits
For small business owners in Illinois, there are a variety of tax credits available that can help reduce the burden of doing business in the state. These credits include the Economic Development for a Growing Economy (EDGE) program, which provides credits to businesses that are creating or retaining jobs in Illinois. Additionally, the Illinois Research and Development Credit can help businesses involved in research and development activities reduce their tax liability.
If you’re a small business owner, it’s essential to research the credits available to your business to ensure you’re maximizing your savings.
Conclusion
Illinois offers several tax credits that many residents and businesses may be missing out on, but taking advantage of these credits can significantly reduce your tax burden for 2024. Whether you’re a homeowner, renter, parent, teacher, or small business owner, it’s important to familiarize yourself with these credits and claim them when you file your taxes.
To learn more about Illinois tax credits and other tax-saving strategies, visit Illinois Department of Revenue.
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