As 2025 Tax Season Begins, Hundreds of Millions in Tax Credits Available to Illinoisans

As 2025 Tax Season Begins, Hundreds of Millions in Tax Credits Available to Illinoisans

New This Year: Child Tax Credit for Families and Free IRS Direct File Program

CHICAGO, Ill. – The 2025 tax season has officially began on Jan. 27, and the Economic Security Illinois is encouraging Illinoisans to take advantage of new and expanded tax credits that will put hundreds of dollars back in their pockets. New this year, the state’s first-ever Child Tax Credit (CTC) will provide up to $300 to eligible families with at least one child under 12. That’s on top of the state’s Earned Income Tax Credit (EITC), which thanks to a successful advocacy campaign from ESIL and its partners, was expanded in 2022 to provide more money to more Illinoisans than ever before. Illinoisans can also now access these credits easier than ever before via IRS Direct File, a new tool allowing Illinoisans to file their taxes online directly with the IRS, completely free.

“New and expanded tax credits and free and easy tax filing will put hundreds of millions of dollars back in the pockets of hard-working Illinoisans this tax season,” said Sarah Saheb, Director of Economic Security Illinois. “The first ever Child Tax Credit in Illinois and the expanded Earned Income Tax Credit will provide real relief that will help families thrive, create new opportunities, and support our local economies. We encourage eligible Illinoisans to take advantage of these credits and to use the new Direct File tool to do so, making filing taxes easy and completely free.”

CHILD TAX CREDIT

The state’s first-ever Child Tax Credit, created in last year’s state budget, will provide up to $300 to eligible families. The CTC is available to nearly all families at or below median income with at least one child age 12 and under. The state is dedicating $50 million to the credit this year before scaling up to $100 million next year and becoming permanent - doubling the credit. Economic Security Illinois convened a coalition of stakeholders and organizations on a three-year advocacy campaign to secure this credit for working families.

EARNED INCOME TAX CREDIT

All Illinoisans eligible for the federal Earned Income Tax Credit are eligible to receive an additional credit via the state EITC. For most Illinoisans earning approximately $70,000 or less, this will put hundreds of additional dollars back in their pockets, with a maximum state credit of approximately $1,600 depending on income level and dependents. Economic Security Illinois led a coalition in 2022 that successfully expanded the EITC to nearly 1 million Illinoisans who were previously ineligible due to age or immigration status and increased the credit for all eligible Illinoisans.

IRS DIRECT FILE

Earlier this month, Illinois announced its participation in the IRS Direct File program, allowing millions of Illinoisans to file their taxes directly with the IRS in a free and simplified system. An analysis by Economic Security Project found that when Direct File is at scale in a few years, it will save a total of $725 million for Illinois taxpayers across filing fees, additional tax credits like the Earned Income and Child Tax Credits, and time spent filing. Taxpayers pay on average $160 in tax prep and spend 9 hours filing.

Economic Security Illinois is an affiliate of Economic Security Project. Economic Security Project mobilizes resources and people behind ideas that build economic power for all Americans. As an ideas advocacy organization, we legitimize our issues by supporting cutting edge research and elevating champions, win concrete policy victories for the communities that need to see change now, and provoke the conventional wisdom to shift what’s considered possible. Our team of academics, organizers, practitioners and culture makers disburse grants, run issue campaigns, develop creative interventions and research products to support the field, and coordinate events to encourage investment and action from others.

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