2020 New Illinois Tax Law

There is new information regarding Illinois’ recent tax revisions. The Vehicle Trade-In Value Cap has been changed and it’s important to understand what this means for purchasing a vehicle in Illinois.

Starting January 1, 2020, the trade in value cap for tax credit is $10,000 for first division motor vehicles. Meaning that no matter what value your trade-in vehicle is worth, you may only receive a tax credit on no more than $10,000. There are other elements to this law to help keep tax credit amounts fair for all consumers.

(does not apply to section 2 vehicles, full tax credit is still applicable)


 

Before January 1st 2020
New Car Price $50,000
Your Current Vehicle Value $35,000
Trade-In Tax Credit $35,000
Taxable Amount $15,000
Tax Paid $937.50
Total Cost $15,937.5
After January 1st 2020
New Car Price $50,000
Your Current Vehicle Value $35,000
Trade-In Tax Credit $10,000
Taxable Amount $40,000
Tax Paid $2,500
Total Cost $17,500

Illinois’s new tax law for 2020 takes the savings away from your trade in.

 


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