Metro East Sun

Unemployed in Illinois? Some good news awaits.

Gov. J. B. Pritzker has confirmed the Illinois Department of Revenue’s plan to begin dispersing tax refunds to taxpayers who filed last year’s individual tax income return before the declaration of federal unemployment tax exemptions. 

"The Federal American Rescue Plan Act of 2021 includes a retroactive provision making the first $10,200 per taxpayer (or up to $20,400 married, filing jointly) of 2020 unemployment benefits nontaxable for returns with a modified Adjusted Gross Income (AGI) of less than $150,000," Sen. Terri Bryant wrote in a Facebook post. "This means Illinois taxpayers who received unemployment benefits in 2020 may be eligible for a tax refund from the State of Illinois based on the exclusion of the $10,200."

Taxpayers who filed digitally after March 15 with an unemployment exclusion on both state and federal returns will not be required to pay additional filing fees, while those who filed without an unemployment exclusion must file an amendment return with an adjusted AGI. The IDOR will also advise 3,300 taxpayers who filed by print to file an amended return in order to receive their refunds. 

Tax filers who claim the Illinois Earned Tax Income Credit may potentially claim an increased refund amount through the recently established federal unemployment compensation tax exemption. The department projects additional refunds to be issued later on this year after the Internal Revenue Service releases the federal Earned Income Tax Credit.  

The American Rescue Plan Act will secure $10,200 per taxpayer, and $20,400 married couples in unemployment non taxable returns, with an adjusted AGI of a $150,000 minimum. The idea for the provision was created after filing season began on February 12. An estimated 376,000 taxpayers in the state may qualify for a refund. 

"With the passage of the American Rescue Plan Act of 2021 and the retroactive provision dealing with unemployment compensation, Illinois taxpayers who received unemployment benefits in 2020 may be in line for an additional refund," said David Harris, Director of the Illinois Department of Revenue. "For most eligible filers, no additional action is required. However, I encourage all taxpayers eligible for this tax exemption to review their return to determine if additional action is necessary to claim this valuable tax benefit."

The Illinois Department of Revenue is currently reviewing the electronically filed tax returns that were submitted before March 15. Eligible taxees will receive their refunds within two to three weeks after receiving the notification from the department.