Illinois EITC, the child tax credit and the K-12 credit

Illinois has three credits for families, and they are built on two different ideas. The earned income credit and the child tax credit are refundable: they are paid out even when there is no Illinois tax to reduce, and for a family of modest income they can be worth more than $2,000 on a return that owes nothing. The K-12 education expense credit is the opposite kind. It is nonrefundable, capped at $750, and worth nothing to a family whose Illinois tax is already zero. The first two go on Schedule IL-E/EITC; the third goes on Schedule ICR with the property tax credit. The federal return has to be done first, because every one of them starts from a federal number.

The Illinois EITC: 20% of federal, and a wider door

Qualify for the federal earned income credit and the Illinois credit follows automatically: 20% of the amount on Form 1040 line 27, copied to Schedule IL-E/EITC and from there to IL-1040 line 29. There is no separate Illinois income test; the federal income limits, the investment income cap and the qualifying-child rules all carry over. For 2026 the federal credit tops out at $8,231 for three or more children, so the Illinois credit tops out at $1,646.

Illinois then goes further than the federal credit in two ways, both since tax year 2023 (verify). Workers who file with an ITIN rather than a Social Security number, and families whose children have ITINs, are excluded from the federal credit; Illinois lets them in. And workers with no qualifying child who are 18 to 24 or 65 and older, whom the federal credit cuts off at the age brackets, get the Illinois credit anyway. For these filers there is no federal line 27 to copy, so the schedule includes an Expanded EITC Worksheet that rebuilds the federal credit as if the federal rules allowed it, and the Illinois credit is 20% of that figure.

Federal maximums from Rev. Proc. 2025-32 (verify); Illinois figures are 20% and 40% of them, rounded. The child tax credit requires at least one child under 12. Investment income must be under $12,200 for 2026 (verify). The 2025 Illinois maximums were $130, $866, $1,430 and $1,609.

Part-year residents and nonresidents get a share: the credit is multiplied by the Illinois percentage from Schedule NR. The Department reviews EITC claims closely. The schedule has to be attached with pages 1 and 2 and Schedule 1 of the federal return, a return with Schedule C income is likely to draw a request for records, and a claim found to be fraudulent can bar the credit for up to ten years (verify). The usual reason for a delay is simpler: a child’s months in the home entered wrong, or a child claimed on two returns.

The child tax credit: 40% on top

Since tax year 2025 Illinois adds a second refundable credit for families who qualify for the Illinois EITC and have at least one dependent child under 12 on December 31. It is 40% of the Illinois EITC, not of the federal credit, which means it is worth at most $658 for 2026 and most families get less. It was 20% for 2024, its first year, and the statute now has no end date. It is figured in Step 5 of Schedule IL-E/EITC and goes to IL-1040 line 30.

Because the credit is a percentage of the EITC, it is largest where the EITC is largest, in the plateau of the federal formula, roughly $18,000 to $24,000 of earned income for a family with two children (verify), and it phases out as the EITC does, reaching zero in the low $60,000s single or the low $70,000s joint. A family with a child under 12 and income of $80,000 gets nothing from it. The age test is stricter than the EITC’s own: the EITC counts children under 19, or under 24 in school, but only a child under 12 unlocks the 40%. One such child is enough; the percentage does not grow with more. Neither credit counts as income or resources for means-tested benefits unless federal law requires it, so a refund does not cost a family its SNAP or Medicaid.

The K-12 education expense credit

This one is for parents and legal guardians of children in kindergarten through grade 12 at an Illinois public, nonpublic or home school. It returns 25% of qualifying expenses above the first $250, up to a credit of $750 per family, which means the cap is reached at $3,250 of expenses. It is nonrefundable, it shares the $250,000 / $500,000 federal AGI cut-off with the property tax credit, and it is claimed in Section B of Schedule ICR, which asks for each student’s name, grade, school and the amount paid.

What qualifies is narrower than most parents expect: tuition, including summer school that counts toward graduation; book rental fees for required books; and lab fees for required supplies or equipment, including an instrument rented from the school for a class taken for credit. The student must be under 21 at the close of the school year, and both parent and student must have been Illinois residents when the money was paid.

What does not qualify is most of the back-to-school list: supplies and equipment bought outright, such as a purchased instrument or a costume; anything paid to a business rather than the school; tutoring and enrichment outside the curriculum; after-school care, even if the school runs it; preschool, daycare, college and trade school; and anything covered by a scholarship. Public school registration fees that are really tuition or book rental qualify; activity fees, sports fees and lunch money do not (verify). Home-schooling families can count required texts and lab materials under Publication 119 (verify), not the general cost of educating at home.

Receipts matter here more than anywhere else on the Illinois return. The school’s itemized receipt showing the student, the fee type and the amount is what the Department asks for when it checks. Parents filing separately can each claim, but not for the same expenses, and not for more than $750 between them.

What Illinois does not have

There is no Illinois child and dependent care credit; the federal credit, which grew for 2026, stands alone. There is no Illinois counterpart to the federal $2,200 child tax credit for families above the EITC range; a middle-income family with three children gets the exemption allowance, $2,925 a head, and nothing else for the children. There is no state deduction for private school tuition beyond the $750 credit, and the federal adoption and education credits have no Illinois lines. Illinois keeps its family help at the bottom of the income range, through the two refundable credits, and leaves the middle to the federal return.