Think You’re Getting a State Income Tax Refund? Only if You Don’t Owe the City

February 16, 2012

If you owe money in fines to the city of Chicago, you might as well pay up because it’s going to be taken from you anyway.

The Chicago city council this week approved Mayor Rahm Emanuel’s plan to withhold state income tax refunds from residents who owe money for things like building code violations, false burglar alarms, unpaid parking tickets, red-light camera citations and other final judgments never collected.

The city believes it is owed and can collect between $8 million and $20 million under the new plan. The debt dates back to 2005. When it comes to parking and red-light tickets, those affected would be motorists who have received and ignored several warning notices about their fines.

If the debt owed to the city is larger than that individual’s state income tax refund, you’re still not going to get off: The claims will remain for five years, which means the city can take a resident’s refund for years until the debt is paid off.

Under the ordinance, the state will also take an additional $15 as a collector’s fee.

The city council this week also passed some Chicago real estate measures:

*Nearly 100 units of senior housing will be rehabilitated in Grand Boulevard, an 11-story Bronzeville Senior Apartment Building at 460 E. 41st Street, Chicago. The $18.2 million plan would upgrade the plumbing, mechanical systems, HVAC systems, kitchens, bathrooms, roof, windows, building entrances and parking surfaces.
“By supporting the preservation of safe, affordable housing, we can help seniors continue to live in the neighborhoods they have called home for many years,” said Mayor Emanuel.

*$1 million in home improvements grants will be made available to eligible property owners in Chicago’s Bronzeville neighborhood. The grants would come from the Department of Housing and Economic Development’s (DHED) Tax Increment Financing-Neighborhood Improvement Program (TIF-NIP) and would be used for exterior repairs and limited interior improvements.

*A new neighborhood stabilization program would also use TIF funds to provide home buyers with forgivable loans to purchase and reoccupy vacant, foreclosed homes in Chicago’s Humboldt Park neighborhood.

Chicagoland Real Estate Forum will be talking in further detail about those last two measures, so check back over the weekend for those stories.

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