Throughout the year, lawmakers write and propose bills to help better the lives of their constituents. When the bills are passed into law, they can take effect with the new year. There are a few law changes that went into effect early this year that Illinois residents should know about.
As an Illinois resident, you’ll want to know how these laws will affect you and your future. It’s important to stay informed about the state’s law changes and new laws so you’re aware of your rights and what’s going on in your state.
What Law Changes Have Gone Into Effect?
There are some laws that affect wages and taxes, something every resident will likely want to know about. We’ll go over what those changes are and what residents may have already seen since the beginning of the year.
Minimum Wage Increase
The minimum wage payment is increasing for residents of Illinois. This is an ongoing process, that started in January 2020 when minimum wage increased from $8.25 to $9.25. There was also an increase during July, bringing the total to $10. This payment increase is part of a plan to gradually reach a $15 minimum wage by 2025.
Chicago residents may see the increase at a slightly faster rate. The minimum wage in the city is to increase by $1 to $14 per hour. On July 1, 2021, it will reach $15. It’s important to note that employers who have fewer than 20 employees have a bit more time to reach that amount. They have until 2023 to get to $15.
For others in Cook County, the rate will increase to $13 per hour. However, there are municipalities that opted out of this plan. Instead, the rate of inflation will determine the increase.
State Income Tax
During the last election, Illinois voted on whether or not to change the state’s income tax from a flat rate to a graduated rate. The people voted, and the proposal was rejected. The totals showed about 55% voted against it.
This proposal was put forth in an effort to help bridge the gap of the state government’s deficit from the past year, which suffered losses as a result of the COVID-19 pandemic. The graduated rate system would be in proportion with income. As the taxpayer’s income increased, so would the tax rate.
Those who supported the bill said that this was a fair way to generate money and also fix financial issues that Illinois has faced since before the pandemic. On the other side, there was concern about the fairness of this shift and also voiced it could affect jobs. They also pointed out that there wasn’t a guarantee that the higher tax brackets wouldn’t eventually move down and affect the middle class.
Since the people voted against it, the state will keep the current flat rate plan, which is 4.95%. No matter how much a taxpayer makes, that is the rate they pay.
This decision means that the state government will need to think of other ways to bring income to Illinois. They will need to formulate and implement their spending plan for the next fiscal year so they can continue to serve Illinois.
The fiscal year will conclude in June 2021. The current plan is similar to the one that Illinois had last year, there have been new setbacks during this fiscal year. The pandemic has put a lot of financial strain on everyone. People are being told to stay at home as much as possible, some businesses had to shut down for a time and may only be able to run at reduced capacity, and the effects of the pandemic are still ongoing.
Governor Pritzker has estimated a loss of $6.5 billion. The state governor’s administration will seek out ways to generate revenue, including tax adjustments for businesses, find corporate tax loopholes, and continue to seek federal funding to help Illinois during this trying time.
As the state government will continue to guide Illinois residents during the pandemic, they will be working hard to find ways to get funding for the state. Keep an eye out for future bill proposals that could be passed into law throughout this year.
Staying informed on state laws is something everyone in Illinois can benefit from. The personal injury lawyers at Krzak Rundio Law Group are also invested in remaining current on our state’s laws and how they affect our clients. If you have any questions about law changes in Illinois, reach out to us here.