What is the NEW Illinois Tax Credit Scholarship Program?
This is new legislation that allows individuals and corporations to donate to scholarship-granting organizations (SGO) and receive a credit on their state taxes in return. This may be a significant benefit to benefactors because it is a tax credit rather than a deduction which is typical for charitable contributions. The SGO will use the donations to grant scholarships to qualifying students.
What does this mean for Providence Catholic?
The new legislation allows for benefactors to designate a donation to Providence Catholic High School or any Diocese of Joliet Catholic school. Benefactors may make a charitable contribution of any amount up to $1.0 million for scholarship programs and receive a state tax credit of 75%. The SGO will provide scholarship dollars for families meet the income requirements.
How much is the tax credit worth?
An individual or corporate donor will receive a 75% state tax credit on their donation. This means that if a donor donates $10,000, they will receive a state tax credit of $7,500. Donations by both individual and corporate donors are capped at $1 million. Individual donors can direct their donations to the school or subset of schools of their choice. Corporate donors cannot designate particular schools.
Can a donor receive a federal tax deduction in addition to a state tax credit for the same donation?
No. The legislation specifically prohibits this.
Is there program cap?
There is a $75 million state tax credit limit for donors in the State of Illinois.
How does that donation process work?
Beginning on January 2, 2018, individual and corporate donors will be able to reserve tax credits on the Illinois Department of Revenue website. Here is a direct link to www.mytax.illinois.gov.
- Determine the contribution amount to give as an individual or corporation for student scholarships at Providence Catholic High School.
- Go to the Department of Revenue website (mytax.illinois.gov) to set up and activate an account. This may take 10 days.
- Return to the website after January 2 to reserve donation amount and receive a tax credit. The benefactor will need:
- The name of the SGO – Providence Catholic will be using EmpowerIllinois (EmpowerIllinois.org)
- Amount of donation
- Region of designated school – Providence Catholic is Region #3
The benefactor will then have 60 days to donate the amount they reserved on the IL Department of Revenue site to Empower Illinois. Empower Illinois is the SGO selected by the Catholic Conference of Illinois and has been vetted and approved by the Bishops within the State of Illinois.
Other states that have implemented similar legislation have seen the state tax credits used up in a short time frame. Interested parties are encouraged to complete their donation process early.
Other helpful links:
Diocese of Joliet Illinois Tax Credit Information
PCHS Tax Credit Newsletter
Step by Step Instructions
Any questions, please contact Jane Lagger, Director of Annual Giving – email (815) 717-3162.
Families Applying For IL State Tax Credit Scholarship
For Families applying for an IL State Tax Credit Scholarship please follow this link