Not All Tax News is Bad News

August 18, 2022

No one likes talking about taxes, no one likes doing taxes, and certainly no one likes to pay taxes. In fact, one of the reasons that America exists today is because our Founding Fathers were fed up with the taxes imposed on them by Great Britain. We’re here to change the narrative. Everyone knows the age-old quote, “The only three certainties in life are death, taxes, and DWM trying to save you money on your taxes” (trademark pending). In this blog, we talk about tax rebates, tax programs, and tax deductions. Stick around and you may find that not all tax news is bad news.  


Illinois Tax Rebates

Good news! If you were an Illinois resident in 2021, you may be eligible for a tax rebate. Thanks to the newly introduced Illinois Family Relief Plan, Illinois residents may qualify for Illinois tax rebates. The first qualification of course is that you were an Illinois resident in 2021.

As long as you’re below the AGI limit, all Illinois residents are eligible for the individual income tax rebate. Single Illinois residents with adjusted gross income below $200k are eligible to receive a $50 rebate, while married residents with AGI less than $400k are eligible for a $100 rebate. The other rebate created through the Illinois Family Relief Plan is for property tax. Residents can receive a rebate equal to their 2021 property tax credit with a $300 limit. The property tax credit is a credit equal to 5% of the Illinois property tax that you paid on your primary residence in 2020. For single individuals to qualify your AGI must be lower than $250k and for married individuals, your AGI must be lower than $500k.

So how can you claim these rebates? Your rebates will be automatically sent to you in the method that you received your tax refund. If you did not receive a refund from Illinois, your rebate will be sent to via paper check. Rebates are expected to begin being issued the week of September 12, but the distributions may take up to eight weeks. If you meet the eligibility requirements for these rebates, you can check their status by providing your information to this website.


South Carolina Tax Programs

We’re sure that many people have asked themselves the question, “How do my tax payments benefit the average US citizen?” Usually, it’s impossible to know. Maybe a few cents are allocated for infrastructure and a couple more are allocated for social programs. It can be difficult parting with some of your paycheck without knowing the benefits that your payments provide to the public. Fortunately for South Carolina residents, there is a way that you can choose where your South Carolina tax payments go. There are several SC tax programs that allow you to do this. Basically, by donating to these programs, you may have a more directed focus on where your tax money goes.

The Educational Credit for Exceptional Needs Children Fund is a 501(c)(3) charity. This charity accepts donations for the purpose of providing scholarships to exceptional needs K-12 students to attend independent educational institutions. This is a great cause that benefits hundreds of students and their families each year. Donations made to Exceptional SC are eligible for a state income tax credit of up to 75% of your state tax liability. You can donate at this link.

The Industry Partnership Fund Credit (TC-36) provides taxpayer’s a credit for 100% of contributions made to the Industry Partnership Fund. The credit may be claimed against income taxes, bank taxes, license taxes, or insurance premium taxes, or any combination of them, for qualified contributions to the Industry Partnership Fund at the South Carolina Research Authority (SCRA). SCRA is a public, non-profit corporation that “fuels South Carolina’s innovation economy”  by working in close alignment with academic institutions, entrepreneurs, and industries. To donate, please write a check payable to “IBF” and mail it to SCRA P.O. Box 95 Columbia, SC 29202-0095 Attn: J Sircy.

While we do recommend that you look into these programs, it’s important to note that they have donation caps. Exceptional SC fund is capped at $12 million while the SCRA fund is capped at $9 million. The earlier you contribute, the better. One benefit of donating to the SCRA is that you can claim a 100% deduction against your state tax liability. Even though you can only claim up to 75% of your state tax liability by donating to Exceptional Children, you could also donate the remaining 25% of your liability to the SCRA so that you cover 100% of your state tax bill. If you need any assistance in donating to these programs, please reach out to the DWM team and we’ll be happy to help.

State Pass-Through Entity (“PTE”) Level Approach

In 2021, almost half of the states passed legislation allowing pass-through entities to elect to pay the state tax at the entity level.  The result was that the company (and therefore its owners) was able to get a deduction for state income taxes.  As we know, the 2017 Tax Cuts and Job Act (“TCJA”) went into effect in 2018.  The TCJA capped the SALT (State and local taxes) deduction at $10,000.  So, many owners of flow-through entities received no tax benefit for the taxes they paid for state income tax on the business, until 2021.  Illinois and South Carolina both passed legislation in 2021 and this will apply in 2022 as well. DWM is a pass-through entity and we certainly enjoyed having the company pay state income taxes for both IL and SC in 2021 and deducting the payments.  Check it out with your CPA.


If you’ve made it this far, congratulations! Hopefully you learned something that could save you some money on taxes this year. We tried to keep this brief, but we’re always more than happy to go further in detail with our clients. Please don’t hesitate to reach out for any advice about tax planning. The tax world can be complicated and overwhelming, but DWM can help you navigate the waters.




Detterbeck Wealth Management is a fee-only financial planning / wealth management company with offices located in Palatine, IL (Chicago area) and Charleston, SC areas serving clients locally and across the country. To contact us about setting up an appointment, please see our contact us page