Comptroller won’t garnish 2020 tax returns for unpaid bills for low-income residents

(The Center Square) – Illinois Comptroller Susana Mendoza is giving working-class taxpayers who have been tripped up with some local fees or fines a year to get them paid instead of siphoning the amount out of their tax returns.

The Chicago Democrat announced Monday that she would not be removing the estimated $15 million in unpaid fines from low-to-moderate-income taxpayers’ tax returns for the 2020 tax year.

“Families on the edge are counting on their state income tax refunds to pay bills they have been putting off as COVID-19 cost them jobs or increased their medical bills,” Comptroller Mendoza said.

To qualify, taxpayers must be eligible for the Earned Income Tax Credit, which is a family of four earning $56,844 a year or less or a single person earning $15,820 a year or less for the 2020 tax year. The change will affect an estimated 41,000 households. Mendoza’s office estimates 1 million Illinois taxpayers qualify for the tax credit.

But the comptroller’s announcement is a stay, not a pardon. Those on the hook for money that’s owed to a town would have the amount removed from next year’s tax return if the municipality doesn’t turn over the debt to a tax collector before then. Mendoza said she would consider another postponement next year but state law keeps her from forgiving the debt entirely.

Mendoza was joined by advocacy groups and Chicago Mayor Lori Lightfoot, who praised the decision.

“These families have carried the heaviest burden from the COVID-19 crisis with hours cut and jobs lost, and with it, the health care, transportation, and other essentials we rely on to live our daily lives,” Lightfoot said. “As we move to put this terrible pandemic behind us, we must do everything in our power to ensure our recovery is equitable and brings everyone into the success we hope to all share.”

The Illinois Comptroller’s office has been diverting tax returns to participating municipalities for a decade, collecting fines like unpaid parking tickets, court judgments and sending it to the owed towns. Mendoza’s office will still garnish tax returns for unpaid child support.

The reluctance to collect fines tracks with Mendoza’s 2020 decision to stop collecting red light camera tickets after allegations of corruption in the industry came to light.

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