Tax Credit Scholarship Program

List of 3 items.

  • WHAT IS THE TAX CREDIT SCHOLARSHIP PROGRAM?

    Invest In Kids Act.

    Illinois enacted the Invest In Kids Scholarship Tax Credit Program in 2017. This program offers a 75 percent income tax credit to individuals and businesses that contribute to qualified Scholarship Granting Organizations (SGOs). The SGOs then provide scholarships for students whose families meet the income requirements to attend qualified, non-public schools in Illinois.
     

    Tax Credit Scholarships.

    The Tax Credit Scholarship will cover up to 100% of private school tuition up to a maximum of the average Illinois cost to educate which is roughly $13,000.
    Students with unique learning needs, including those who are gifted, English language learners, or those with special education qualifications, will receive larger scholarships — up to double— roughly $26,000. Key information about the program and donating to these scholarships can be found below.
     

    Empower Illinois.

    Empower Illinois is an independent 501(c)(3) non-profit SGO responsible for serving approximately 80% of participating private schools statewide; including all of Illinois’ Catholic Dioceses, most area Jewish schools, Lutheran Schools, secular schools and many more. Empower Illinois is responsible for:
    • Processing donations from individuals and corporations;
    • Accepting scholarship applications from students/families; and
    • Distributing scholarships to eligible students/families in accordance with the law.
     

    Tax Credits.

    Individual and corporate donors may receive a credit for their Illinois state taxes equal to 75 percent of donations to an SGO.
    • A taxpayer donates $10,000 to an SGO; they are eligible to claim a $7,500 tax credit on their 2018 taxes.
    Tax credits are capped at $1 million per taxpayer per year; a donor can contribute about $1.33 million to receive the maximum tax credit allowed. Donors cannot receive a federal deduction for gifts made through this program, but the net tax benefit to all donors is expected to be greater than ordinary charitable donations of an equal amount. Total tax credits are capped at $75 million per year statewide, which equates to $100 million in donations and scholarships. Please consult a tax professional to determine how such gifts will affect tax liability.
     

    Designating Donations.

    Individuals may direct their donations to a particular school or subset of schools, but not to an individual student or group of students. Corporate donors cannot designate their donations to a particular school.
     

    Donation Process.

    Donors can begin the process by registering with mytax.illinois.gov. After the registration process, which can take up to 10 business days, donors will be ready to reserve their tax credit beginning January 2 on a first-come, first served basis. When reserving their tax credit, donors should select Empower Illinois as the Scholarship Granting Organization. Once their credit has been reserved, they have 60 days to make their donation to an SGO.
     

    Scholarship Eligibility.

    To be considered for a 2019-2020 scholarship, K-12 students must come from a household with income below 300 percent of the federal poverty level ($73,800 for family of four). Prior to April 1, priority will be given to:
    • Students from households below 185 percent of the federal poverty level ($45,510 for family of four)
    • Students who reside in a “focus district” (low-performing public schools)
      
    Visit www.weteachmore.org for up-to-date details, or contact St. Francis High School President at backerson@sfhscollegeprep.org or (630) 668-5800, ext. 1220 with questions.
     
  • INTERESTED DONORS

    The Illinois Tax Credit Scholarship Program is still very new and because of this we have had several people ask how donating to this scholarship, in the benefit of St. Francis High School, would be different than gifting directly to St. Francis High School. I thought it would be appropriate to answer these questions by giving examples to help you see the benefits of gifting to the Tax Credit Scholarship program.
     
    For example, if someone in the 25% tax bracket gives a $1,000 gift to St. Francis High School, the donor would receive a 25% deduction or $250 off their taxes. If the same person donates $1,000 to St. Francis High School through the Tax Credit Program, they would receive 75 cents on the dollar tax credit, a credit of $750 on their State income taxes.
     
    You can see that the additional $500 off your Illinois state income taxes is a great way to save money on your taxes and give an opportunity for low-income families to receive an education from St. Francis High School.
     
    With an Illinois income tax increase from 3.75% to 4.95%, Illinoisans that make $100,000 would pay $4,950 instead of the $3,750 they paid last year. With this being said, donating to a cause you believe in, which would make up some of the $1,200 additional tax dollars, is a win-win.
     
    Here is a further example regarding a corporate donation. According to the Tax Credit Scholarship Program, corporations cannot gift directly to a specific school like individual taxpayers, however, they can gift to specific regions; St. Francis High School is in Region 3. The funds would be distributed throughout that particular region for a scholarship.
     
    For example, if a corporation is taxed at 21% and they gift $10,000 to St. Francis High School, a deduction of $2,100 would be made on their taxes. If they made a gift to Region 3 through the Tax Credit Scholarship, they would receive $7,500 credit towards their Illinois income taxes. This would be an additional $5,400 in tax savings.
     
    Please know that this program greatly helps Catholic education. I urge you to ask your tax advisors about the Tax Credit Scholarship Program and how it could help you save more money.
  • DONOR PROCESS

    Empower Illinois connects Tax Credit Scholarship Donations to Illinois students whose education opportunities may be limited by household income. By donating to Empower Illinois, you can help make a child’s dreams come true.
    Register Icon

    Register

    Donors need an account on mytax.illinois.gov before applying for a tax credit. This can take up to 10 days and involves a mailed pin. Register today.
    Learn More
    Reserve Funds

    Reserve

    After you have registered, you can reserve your tax credit for the 2019 calendar year with the Illinois Department of Revenue in order to make a donation.
    Learn More
    Donate

    Donate

    Once you receive confirmation of your tax credit from the Illinois Department of Revenue, you have up to 60 days to make your donation to Empower Illinois.
    Learn More
    Individual and corporate donors can reserve tax credits through mytax.illinois.gov by following these steps:
    1. Create a MyTax Illinois account on mytax.illinois.gov. Anyone applying for a scholarship tax credit is required to have an account. If you do not have one, the first step is requesting a Letter ID from the Illinois Department of Revenue (this can take up to 10 days).
    2. Apply for a tax credit on mytax.illinois.gov. Donors will need to provide the following information:
      • The region to which he/she plans to donate
      • Name of SGO to which he/she plans to donate (the Joliet Diocese is partnering with Empower Illinois)
      • The amount he/she plans to donate to the SGO within 60 days of receiving your application approval and the Contribution Authorization Certificate.
      1. Designate the donation to St. Francis High School
        • Provide a certificate from the SGO to use tax credit when filing a 2018 return in 2019.
       
      Helpful Links
       
      Visit http://www.revenue.state.il.us/InvestInKids/Contributor.htm for more information on the donor process.

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