Income Tax Credits
Invest in Kids offers approved Illinois individual and business taxpayers income tax credits in the amount of 75 percent of their total qualified contributions made to one or more Scholarship Granting Organizations (SGOs) during a taxable year. Credits cannot exceed $1 million per taxpayer, per year.
Example: A taxpayer makes a qualified contribution of $10,000 to an approved SGO. The taxpayer will be eligible to claim a $7,500 tax credit.
The Department can issue up to $75 million in tax credits per calendar year which are distributed geographically throughout the five
regions. Income tax credits are awarded on a first-come, first-served basis, and approval is granted as long as the
regional and statewide thresholds have not been met.
You must request approval to make a contribution and receive the income tax credit prior to making your contribution. Applications for the 2020 tax year will be available starting
at 12:01 a.m., Wednesday, January 1, 2020 and must be requested online through
Important: You must have a registered MyTax Illinois account for filing either individual income tax or business income tax in order to apply for approval to make a contribution. If you want to apply, you are encouraged to create a
MyTax Illinois account as soon as possible to avoid any processing delays when the application system goes live.
video on Activating a MyTax Illinois account.
Contribution Authorization Certificates
Once your application has been submitted, and the Department confirms that credits are available, the Department will issue you a Contribution Authorization Certificate (CAC). The CAC will be issued electronically to your MyTax Illinois account within three business days of approval of your application.
Example: A taxpayer files an online application indicating he intends to contribute $1,000 to Children Benefit from Education Scholarship Organization for the benefit of Region 4. As long as the regional or the total statewide maximums have not been reached, the taxpayer will receive a CAC from the Department authorizing his $1,000 contribution to the SGO, which equates to a $750 tax credit.
You must make your contribution to the SGO within 60 days after issuance of the CAC. You must provide a copy of the CAC to the SGO. Within 30 days of receiving your contribution, the SGO will issue you a Certificate of Receipt (COR) through your MyTax Illinois account.
Note: An individual taxpayer making a contribution to an SGO may specify which school within the taxpayer’s approved region he or she wishes his or her contribution to benefit. Your CAC number, the amount of your approved contribution, and your last name or business name will be made available to the SGO you select in its MyTax Illinois account.
Click here for a list of IDOR approved Scholarship Granting Organizations.
Claiming Your Income Tax Credit
To receive a tax credit for your contribution, the payment for the contribution must be received by the SGO by the last day of your filing period and the approved SGO must confirm receipt of the contribution. Approved credits may be claimed beginning with the filing of your 2019 income tax return. You cannot take a tax credit under this Act if you claimed any portion of this contribution as a federal income tax deduction.
Individuals who are married and filing a joint return are considered one taxpayer for purposes of making qualified contributions.
Example: If two married individuals each contribute $1,333,333 intending at the time of the contribution to file separate returns, but subsequently file a joint return, the maximum credit allowed is $1,000,000.
If you don’t use all of your income tax credit, you cannot receive a refund. However, any credit amount that exceeds your tax liability for the year may be carried forward and applied to your tax liability in the subsequent five taxable years. Credits carried forward do not require additional approval. Credits are applied to the earliest year for which there is a tax liability. Credits cannot be carried back to a prior tax year.
Please note: To make a
new Invest in Kids contribution, you must apply each year.