The Illinois Tax Credit Scholarship Program, “Invest in Kids,” provides a 75 percent Illinois state income tax credit to individuals and corporations that contribute money to a non-profit Scholarship Granting Organization (SGO). The SGOs award scholarships to eligible students from low-income families. Donors will use money already owed to the state (taxes) and donate it to a needs-based scholarships instead, all while receiving a 75 percent state tax credit.
Through this program:
- An individual or corporation will receive a 75 percent credit on donations to an SGO. For example, if a person donates $100,000, they will receive a state tax credit of $75,000.
- Individual donors can designate their donations to Village Leadership Academy.
- The credit can be rolled over for five years.
- Donors are prohibited from receiving a federal tax deduction for these donations.
- The program is capped at $100 million in donations, resulting in $75 million in total tax credits issued.
How to donate to a Tax Credit Scholarship?
Individual and corporate donors can reserve tax credits through mytax.illinois.gov by following these steps:
- 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.
- Apply for a tax credit on mytax.illinois.gov. Donors will need to provide the following information:
- Region to which he/she plans to donate
- Name of SGO to which he/she plans to donate (VLA is partnering with Empower Illinois and Big Shoulder Fund)
- Amount he/she plans to donate
- Donate to the SGO within 60 days of receiving your application approval and the Contribution Authorization Certificate.
- Designate the donation to Village Leadership Academy.
- Provide certificate from the SGO to use tax credit when filing a 2018 return in 2019.
Applying for a Tax Credit Scholarship
Tax credit scholarship applications for the 2022/2023 school year are opening soon (see dates below). VLA will be hosting IL Tax Credit Scholarship Program Application Assistance Workshops for both Empower Illinois and Big Shoulder Fund. Stay tuned for dates and details. In the meantime, to learn more about the tax credit scholarship application policy, including scholarship eligibility, click here.
Empower Illinois Application opens on January 12, 2022.
Visit https://empowerillinois.org/ for more details
Big Shoulders Fund Application opens on January 13, 2022.
bigshouldersfundsgo.org/tax- credit-scholarships/ for more details