IRS FormSPRINGFIELD – The $10,000 cap on state and local tax deductions included in President Trump’s federal tax overhaul threatens states like Illinois. Illinois relies more on the State and Local Tax (SALT) deduction than other states.

State Senator Julie Morrison (D-Deerfield) passed a proposal out of the Senate this afternoon that would allow Illinois taxpayers to donate up to 90 percent of their state income or property taxes to again itemize one’s federal income tax above the $10,000 cap. 

“Capping the SALT deduction punishes states like Illinois that have higher property tax burdens and above-average incomes,” Morrison said. “For a state like Illinois, which contributes much more in federal taxes than we receive back in programs and services, this is an unfair tax policy that must be rectified.” 

House Bill 4237 would create a 90 percent income tax credit for individuals who donate to the state treasury and a 90 percent property tax credit for individuals who donate to a municipality, county or public school’s charitable fund. State and local governments would still receive the full amount of due tax liability from taxpayers, but the money would come from the taxpayer rather than the state treasury or country treasury.

House Bill 4237 passed out of the Senate on a bipartisan 54-1 vote. The legislation now heads back to the House for a concurrence vote before being sent to the governor.

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