How to Claim the Illinois Property Tax Refund
This guide explains how Illinois homeowners can apply property taxes paid on a primary residence as a credit to lower their state income tax liability.
The Illinois Property Tax Credit allows homeowners to reduce their state income tax liability. This credit is calculated based on the property taxes paid on a principal residence and is claimed on the annual Illinois income tax return. While it is a non-refundable credit, meaning it can reduce your tax to zero but won’t result in a refund on its own, it directly lowers your tax obligation and can contribute to a larger overall state tax refund.
Eligibility for the Property Tax Credit
To qualify for this tax credit, you must have owned and lived in your principal residence in Illinois during the tax year for which you are filing. This credit is exclusively for a primary home and cannot be claimed for vacation homes, rental properties, or any commercial real estate. Renters are not eligible to claim the Illinois Property Tax Credit.
The credit is based on the real estate tax you paid in the most recent calendar year for the property you occupied in the prior year, as property taxes in Illinois are paid in arrears. For example, the property taxes you paid during 2024 are for the 2023 assessment year. If you are married and filing separate returns, both you and your spouse may claim the credit, but the total credit claimed between both spouses cannot exceed the calculated maximum.
The credit is not allowed if a taxpayer’s federal Adjusted Gross Income (AGI) exceeds certain thresholds. For those with a federal filing status of married filing jointly, the AGI limit is $500,000. For all other filing statuses, such as single, head of household, or married filing separately, the AGI limit is $250,000.
Information and Forms Needed to Claim the Credit
Before you can claim the credit, you must complete the appropriate form. The central document for this process is Illinois Schedule ICR, “Illinois Credits.” This form is where you will calculate the exact amount of your property tax credit.
To complete Schedule ICR, you will need your Property Index Number (PIN), which is a unique identifier for your property. This number can be found on your property tax bill or assessment notice. You will also need proof of the amount of property tax you paid, which can be a copy of your tax bill or a canceled check. Only include the amount paid for your principal residence and exclude any payments for penalties or fees.
The credit is equal to 5% of the Illinois property tax you paid on your principal residence. For instance, if you paid $6,000 in property taxes, your credit would be $300. You will perform this calculation directly on Schedule ICR. The form will guide you through entering the total property tax paid.
How to Claim Your Credit on the Tax Return
Once you have calculated your credit amount on Schedule ICR, you will transfer that figure to your main Illinois income tax return, Form IL-1040. The total credit amount from Schedule ICR is entered on Line 16 of the IL-1040. You must attach the completed Schedule ICR to your IL-1040 when you file, as failure to do so will result in processing delays or denial of the credit.
The Illinois Department of Revenue encourages electronic filing, which can be done through their free online portal, MyTax Illinois, or through various approved tax preparation software programs. E-filing is the fastest and most secure method, leading to quicker processing of your return and any associated refund.
Alternatively, you can mail your physical paper tax forms, including the IL-1040 and the attached Schedule ICR, to the address specified in the form instructions. You can choose to receive your refund via direct deposit into a bank account or as a paper check mailed to your address.
Checking Your Illinois Refund Status
After you have filed your Illinois tax return, you can monitor the progress of your refund online. The Illinois Department of Revenue provides a tool called “Where’s My Refund?” which is accessible through their official website. This feature allows you to track your refund from the time the return is received until the refund is issued.
To use the tool, you will need to provide some specific information from your tax return to verify your identity. This includes your Social Security Number, your filing status, and the exact amount of your Illinois Adjusted Gross Income as reported on your IL-1040.
The “Where’s My Refund?” tool will display various statuses as your return moves through the system. Initially, it may show that your return has been “received.” As the department reviews your information, the status will change to “processing.” Once your return and the claimed credits are verified and approved, the status will update to “approved,” and you will be provided with an estimated date for when your refund will be sent.