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SB 3868

INC TAX-PROP TAX CREDIT

104th Regular Session Introduced by John Curran and 4 co-sponsors

Doubling the residential property tax credit from 5% to 10% for principal residences, with no automatic sunset if enacted.

Added as Co-Sponsor Sen. Dave Syverson
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Bill Summary · SB 3868

Summary of SB 3868 (104th Illinois General Assembly)

Purpose and intent

SB 3868 proposes to increase the residential real property tax credit under the Illinois Income Tax Act from 5% to 10% of real property taxes paid on the taxpayer’s principal residence. The bill also makes this credit exempt from the Act’s automatic sunset provision. It is positioned as revenue-related legislation with an immediate effective date upon becoming law.

Key provisions and changes

  • Current law (pre-SB 3868):

    • Beginning with tax years ending after December 31, 1991, individual taxpayers receive a tax credit equal to 5% of real property taxes paid during the taxable year on the taxpayer’s principal residence.
    • For tax years ending on or after December 31, 2026, the credit increases to 10% (this is the provision SB 3868 seeks to adopt permanently, but currently in the bill as introduced, 5% remains the baseline until the change is enacted).
    • Income cap: Taxpayers with adjusted gross income (AGI) above $500,000 (married filing jointly) or $250,000 (all other filers) are ineligible for the credit beginning in 2017.
    • Allocation: For multi-unit/multi-use structures and farm dwellings, the credit is based on the portion of real property taxes attributable to the taxpayer’s principal residence.
    • Sunset: The credit is exempt from a separate sunset provision, subject to the Act’s regular sunset rules; SB 3868 makes the credit itself exempt from its existing sunset framework.

  • What SB 3868 would change:

    • Credit rate increase: Expressly increases the credit from 5% to 10% of real property taxes paid on the principal residence during the taxable year.
    • Sunset/expiration: Removes the automatic sunset risk for this credit by making it exempt from the Act’s sunset provision; effectively preserves the higher 10% rate going forward if enacted.
    • Effective date: Applies to tax years ending on or after December 31, 2029 under the current structure, but SB 3868 states the act takes effect upon becoming law (immediate effect), with the policy intent to grant the 10% credit for tax years that would follow.

Note: The bill text as introduced indicates the 5% baseline for years ending before 12/31/2029 and a 10% credit for years ending on/after 12/31/2029 if enacted, with the change applying to principal residence real property taxes and ensuring eligibility criteria (income thresholds) remain in place.

Who would be affected

  • Taxpayers claiming the Illinois individual income tax credit for residential real property taxes:
    • Those whose principal residence’s real property tax is the basis for the credit would see the benefit increase from 5% to 10% (assuming the bill’s provisions take effect).
    • Filers with AGI above $500,000 (joint returns) or $250,000 (other filers) would remain ineligible for the credit, consistent with current income limits.
  • Tax filing and compliance: Taxpayers and preparers would need to adjust calculations if/when the higher credit becomes law.

Procedural and timeline aspects

  • Status and committee actions: Assigned to Revenue; Rule 2-10 deadlines set in 2026. Introduced February 6, 2026.
  • Effective date: The bill states it takes effect upon becoming law, which is immediate when enacted. The bill text also references the statutory framework for credit calculation in tax years ending after specific dates, with an intent to broaden the credit without a sunset.
  • Sponsor: Sen. John F. Curran (with co-sponsor noted).

Summary in plain terms

SB 3868 aims to double the Illinois tax credit for residential real property taxes from 5% to 10% of the taxes paid on a taxpayer’s principal residence, eliminates the risk of an automatic sunset for this credit, and preserves existing income-eligibility limits. If enacted, eligible Illinois residents would receive a larger credit against their state income tax liability for real estate taxes paid on their primary residence, starting from the effective date of enactment and applying consistent with current principal residence and income rules.

Compiled from official sources — confirm details with the bill’s official record.

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