By Michael Braun, CPA of Braun Accounting & Tax Service in Waterloo

Monroe County’s late 2017 property tax bills are still causing headaches for local taxpayers.  The Illinois Department of Revenue is holding up income tax refunds for many Monroe County residents until they verify the property tax credit claimed on their 2019 Illinois income tax returns.

Illinois residents are allowed a credit against their Illinois income tax equal to 5% of the real estate tax paid on their primary residence.  Due to the late 2017 property tax bills many local residents paid 2017 and 2018 real estate tax bills in 2019. 

When the Illinois Department of Revenue is unable to verify the property credit with information from third parties a notice is generated.  The notices appear to disallow the property tax credit and either reduce the refund or increase the amount due on your tax return.  Please speak to a tax professional before sending any additional money to the State of Illinois because the State of Illinois is simply requesting additional information to verify the property tax credit. 

If you receive a notice from the Illinois Department of Revenue regarding your property tax credit and you used a tax professional to prepare your income tax returns your first call should be to the professional who prepared your tax return.  The tax professional should be able to prepare a response on your behalf or provide the guidance necessary for you to respond.  If you prepared your own tax return then you need to gather up your 2017 and 2018 real estate bills (available at monroecountyil.gov), proof of payment, and make copies of your 2018 and 2019 Form IL-ICR.  Write a quick letter to the Illinois Department of Revenue explaining what you paid in 2019.  The amounts paid in your letter should match the amount on your Form IL-ICR.  You can submit your letter and supporting documents to the address provided on the notice or you can create an account at mytax.illinois.gov and submit your letter and supporting documents through the website.  Eventually the Illinois Department of Revenue will review the documentation and if the property tax credit is verified you will then receive your Illinois tax refund.  This process can take months and could be delayed as the Illinois Department of Revenue has reduced staffing due to COVID-19.

Currently the individual taxpayer assistance phone lines are not being answered due to measures to prevent the spread of COVID-19.  You can email the Illinois Department of Revenue regarding individual income tax matters at REV.TA-IIT@illinois.gov.