This week: 1:35 p.m.
A little more than two months after its tax overhaul became law, rockford residents are bracing for another round of uncertainty as the state’s new tax code takes effect.
The state will see its first income tax hike of 2018 and the new tax brackets are expected to be much higher than those of the current tax structure, which allows taxpayers to file a tax return with a simple “I,” as opposed to the complicated “e.”
The Tax Foundation, a Washington-based research group, recently released a study showing that the new structure has led to tax savings of $4.2 billion over the past two years.
And the most recent data, from April to June, shows the median household in the county has seen an average income increase of 2.8 percent, according to the study.
That’s the largest income increase in the entire county.
But the increase isn’t a one-time event.
For many of Rockford’s residents, the change will be a gradual process that begins with the filing of their 2018 tax returns, which will likely take some time.
That could mean paying the increase, as well as some additional taxes that are still unpaid.
“I am going to have to pay a little bit more than I was paying before, and I will have to get a little more comfortable with it,” said Peter Hirsch, a resident of Rockfield and a member of the Rockford Chamber of Commerce.
“But we’ll get there.”
In addition to the income tax increase, there are several other taxes that have been eliminated or lowered under the tax code, including the state sales tax, which has been frozen since 2017, and the property tax, both of which are currently $3.50 per $1,000.
The county has also eliminated the county’s property tax rate, a measure that would have affected about $400 million a year in property tax revenue, according the Tax Foundation.
In addition, Rockford has a number of income tax exemptions that can be used to lower the overall tax burden, and a number that can benefit those earning a certain income level.
For some Rockford residents, they will probably not be paying the tax increase anytime soon.
“We are getting hit on all fronts,” said Rob Hagerty, a Rockford resident and chairman of the Republican Party of Rockfords.
“There are some new taxes coming into place that are going to add to the burden on the average Rockfordite.
They are going out of business.
They will be affected, but not necessarily all at once.”
Hagerty is not the only Rockford-area resident in that regard.
“The tax changes that are coming into effect will impact a lot more than the Rockfells of Rockfort,” said Rockford Mayor David Smith, who added that the state has also reduced the county tax base.
Hagertys taxes are likely to be the biggest losers.
For 2018, he and his wife will have paid a total of $3,947 in property taxes, according