CHICAGO (CBS) — Lower-income taxpayers in Illinois who owe unpaid parking tickets or other fines to the city of Chicago or other local governments won’t have that money taken out of their income tax returns this year, in an effort to give them another measure of relief during the pandemic.
In most years, the Illinois State Comptroller’s office withholds unpaid parking tickets, traffic tickets, and other fines and court judgments from state income tax returns, sending the money to municipal governments to pay off taxpayers’ outstanding debts.READ MORE: Mars Wrigley Says It Will Move Most Operations Out Of Its Plant On Chicago's West Side Over Next 2 Years
Comptroller Susana Mendoza said her office will not do so this year in the case of Illinois taxpayers with incomes low enough to qualify for the Earned Income Tax Credit. She said the change will affect approximately 41,000 households out of the roughly 1 million across Illinois who qualify for the EITC. To qualify for the EITC, a family of four must earn no more than $56,844 of total income in 2020, and a single taxpayer must earn no more than $15,820.
“We’re here to give working class families in Illinois a lift as we all try to recover from how COVID-19 has disrupted our lives,” she said.
Mendoza said the policy change is for one year only, although it could be extended for additional years if the state experiences a slow recovery from the pandemic.
“Our action today will put $15 million back into the pockets of these working families,” she said. “Families now – especially I would say now during a pandemic – count on these income tax refunds to pay for more critical bills such as rent, groceries, and medications.”READ MORE: Uber Driver Shot On Eisenhower Expressway
Chicago Mayor Lori Lightfoot, who supported the move, said it’s “welcome news” for working families across the city and state.
“It goes double for after the year that we’ve had, because it’s the same working families that have carried the heaviest burden for the COVID-19 crisis with hours cut, job loss, and other financial and other burdens; and with it, healthcare, transportation, and all the other central costs either remaining the same or going up when they have less money to spend over the course of the crisis,” Lightfoot said.
Brent Adams, Senior Vice President of Policy and Communication at Woodstock Institute, a non-profit financial research organization, said protecting lower-income taxpayers’ refunds would give them “a chance to build a better life for themselves and their community.”
“In our economy, wealth creates wealth, and it is very expensive to be poor. High interest rates, overdraft fees, late fees; these are all penalties for being poor,” he said. “Key to combating structural inequity is to put more money in the pockets of lower-income folks, who are disproportionately people of color.”
Mendoza stressed that the policy change is not an amnesty from unpaid tickets and fines. Those debts will still be owed, but taxpayers won’t have them deducted from their tax refund for 2020. If taxpayers leave those fines unpaid, local governments can hire debt collectors to go after the overdue money.MORE NEWS: Chicago White Sox Plan To Take Action After CBS 2 Investigators Expose Parking Scam Outside Sports Venues: Fans Getting Ripped Off By Conmen, Then Hit With Parking Tickets
The comptroller also noted the policy change won’t affect her office’s practice of deducting unpaid child support payments from tax refunds.