Tax updates in Illinois. According to Senate Bill 642, the property tax benefit for low-income seniors is being extended. Specifically, the legislation, signed by Governor J.B. Pritzker, expands eligibility for tax breaks and provides additional financial relief to older residents facing rising housing costs.
Until now, the basic requirements to qualify for this assistance were being at least 65 years old
The change comes with the fact that senior citizens and people with disabilities who own homes in Illinois will benefit from a significant expansion of property tax exemptions thanks to a new state law. Until now, the basic requirements to qualify for this assistance were being at least 65 years old and having a total household income of no more than $65,000. Authorities may also require compliance with other conditions. This measure freezes the assessed value of the property in the year the exemption is granted for the payment of the lien, the legal right on the property.
The new law expands these parameters to include more residents than ever before
Therefore, with these changes, based on the text, SB 642 modifies the income requirement and adds other issues that senior citizens should consider. Primarily, the changes aim to support those with fixed incomes who are increasingly burdened by rising property tax bills. Although Illinois has been offering tax relief to make it more affordable, especially for those most in need, many senior homeowners were excluded due to strict age, income, and residency requirements. The new law expands these parameters to include more residents than ever before.
Local governments and county assessors are now tasked with updating their exemption eligibility criteria
The specific changes include an increase in the income threshold for exemption from $65,000 to $75,000 in fiscal year 2026, and then to $77,000 and $79,000 in 2027 and 2028, respectively; a three-year occupancy requirement, preventing new property owners from claiming the tax benefit; and the introduction of payment plans for senior citizens behind on their taxes. Local governments and county assessors are now tasked with updating their exemption eligibility criteria to align with the new state guidelines.
Taxpayers who qualify for this program may also be able to avoid penalty interest
The new law grants Illinois counties the authority to offer these plans to homeowners. Under the updated provisions, homeowners aged 65 and over, and in some cases 62 and over depending on their income, may be eligible for a property tax reduction if they meet the revised income limits and residency requirements. Taxpayers who qualify for this program may also be able to avoid penalty interest, if the tax authorities so decide. In other words, each case depends on its specific circumstances.
The bill was originally introduced in the Senate on January 24 and passed both chambers in late October
This benefit will also be reflected in the tax rate for fiscal year 2025, which will be reduced. Starting April 1, 2026, interest on unpaid taxes will be 0.75% per month. Illinois has traditionally offered property tax relief programs, such as the Senior Citizen Assessment Freeze, which prevents increases in the assessed value of a qualifying senior citizen’s home. The bill was originally introduced in the Senate on January 24 and passed both chambers in late October. Now, with the signature of Illinois Governor JB Pritzker, it is officially law.
Thus, Senate Bill 642 garnered near-unanimous support in both chambers. “This law will make a significant difference in the lives of senior homeowners across the state, who have been burdened by property taxes,” stated a spokesperson for the Illinois Department of Revenue. Local groups have applauded this legislation in support of senior citizens.