Illinois is considering its own child tax credit

A new study says a bill currently under consideration in Springfield would cost $1 billion and reduce child poverty by 7.6%.

Illinois lawmakers are considering a bill that would institute a statewide child tax credit worth up to $700 per child.
Illinois lawmakers are considering a bill that would institute a statewide child tax credit worth up to $700 per child. A new study says the change would cost the state $1 billion per year and reduce child poverty by 7.6%. Pat Nabong/Chicago Sun-Times
Illinois lawmakers are considering a bill that would institute a statewide child tax credit worth up to $700 per child.
Illinois lawmakers are considering a bill that would institute a statewide child tax credit worth up to $700 per child. A new study says the change would cost the state $1 billion per year and reduce child poverty by 7.6%. Pat Nabong/Chicago Sun-Times

Illinois is considering its own child tax credit

A new study says a bill currently under consideration in Springfield would cost $1 billion and reduce child poverty by 7.6%.

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Congress is nearing a January deadline to expand the national child tax credit, but Illinois lawmakers say they’re pushing forward on a state-level credit that would give working and low-income families financial relief regardless of what happens in Washington, D.C.

Researchers say the move would reduce the number of Illinois children living in poverty and kickstart the state economy.

“The time has come for Illinois to put those dollars back in the pockets of parents who continue to struggle,” state Sen. Mike Simmons said. “I’m confident that we’re going to get this included in the budget ASAP.”

Fifteen other states under both Republican and Democratic leadership have implemented permanent or temporary child tax credits in recent years that lower their states’ income tax burden for qualifying households with dependents.

“I grew up in a household with a single mom,” said Simmons, who represents Chicago’s far North Side. “And so I know, personally, the struggle that parents and especially single parents are dealing with in terms of paying rent, paying for school supplies, finding child care, putting food on the table, paying for utilities that are really high.”

Simmons introduced a bill in the state Senate last year still under consideration that would award parents a credit of up to $700 per child. A similar bill introduced in the state House of Representatives has been gaining sponsors this month.

A recent analysis by the Illinois Economic Policy Institute found the proposal would slash childhood poverty in the state by 7.6%. According to the Annie E. Casey Foundation, 15.7% of Illinois children live in poverty.

“It’s really a way to deliver support for working families and middle-class families with children so that they can cover the expenses of raising those children,” said Frank Manzo, an economist at the Institute. “Those types of families currently pay a greater share of their income in taxes than wealthy households in this state.”

Simmons said lawmakers are still negotiating and the final size of the tax credit could be reduced.

The Institute’s study looked at the implications of a potential $300-per-child tax credit and found it would reduce child poverty by 3.3% and cost $470 million.

Manzo said surveys showed the pandemic-era expansion of the federal child tax credit allowed families to pay for housing and basic necessities, like food and diapers. According to the U.S. Census Bureau, that expansion brought more than 2 million children across the country out of poverty.

It helped local mother Mykela Collins support her family after she was put on disability during the pandemic, she told WBEZ’s Reset on Thursday.

“It came in clutch for me to be able to not only support my children, and support myself, but also make sure that our essentials were met,” said Collins, a parent ambassador for the nonprofit Ada S. McKinley Community Services. “And we were able to pay bills, we were able to just do just a broad range of things that we were not able to do in the time of me having to start working.”

Now that the federal expansion is no longer in place, Collins said, support through a state program would make all the difference.

“For families like myself who [have] a low income, it would definitely help us get over a hurdle of not being able to pay bills, the insecurity of not having enough funds just to even take our kids to the store and buy something simple like a bag of chips,” she said.

Proposals to implement a child tax credit in Illinois have previously come up against resistance because of their price tag. Manzo and his research partners estimate the $700 credit would cost the state $1 billion a year.

But Manzo argues that cost would be offset by reductions in spending on state assistance for low-income families.

“You’d be lifting children out of poverty on the front end, instead of spending money on anti-poverty programs on the back end, when those folks are in poverty,” he said.

A state child tax credit would also make Illinois a more attractive place to live, Manzo said.

“It is competing with Arizona, California, Colorado, Utah — states that have child tax credits,” Manzo said. “And those states are delivering tax relief to families with children, and they can use their policies to attract families away from Illinois.”

Lisa Kurian Philip covers higher education for WBEZ, in partnership with Open Campus. Follow her on Twitter @WBEZeducation and @LAPhilip.