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.