Invest in Kids - Illinois Tax Credit Program
The Invest in Kids act created a scholarship tax credit program in 2017. The program gives a 75% Illinois income tax credit to individuals and businesses that contribute to Scholarship Granting Organizations (SGOs). The SGOs create scholarships for need-based students to attend non-public schools in Illinois.
Since it is a tax credit instead of a tax deduction, a $10,000 donation could reduce your Illinois tax liability by $7,500. Any unused credit carries forward for five years. For an Illinois resident who files their taxes in Illinois, the tax savings from this donation substantially outweigh the tax savings from other charitable contributions. Funds donated to an SGO do not count as charitable contributions in your itemized deductions. Donations from Donor Advised Funds are prohibited as well to avoid double tax benefit. The single year individual credit limit is $1M or $1.33M in donations. This tax credit will not apply for those filing their taxes in another state.
Empower Illinois is an independent 501(c)(3) non-profit SGO that serves most private IL schools. When donating to Empower Illinois, you can select a specific school or set of schools that your money will go toward. Empower Illinois is accepting securities like stocks and bonds, so there may be additional tax efficiency by donating appreciated securities to avoid capital gains. In year one (2018), 95% of the funds given to Empower Illinois paid out as scholarships to needs-based students with a total of $45M raised. There is an annual program credit limit of $75M or $100M in total donations received.
There are many options when it comes to donations and Vantage can help maximize tax efficiency through all charitable contributions. Investing in Value is at the core of Vantage’s beliefs and charitable giving is something we find extremely rewarding. If you would like to learn more about charitable giving, please reach out to your Relationship Manager to discuss further.
More information can be found at the Empower Illinois website: https://empowerillinois.org/donors/donate/
Additional detail is found in their year one summary and FAQs.
The information, opinions and forecasts expressed in the referenced links are presented from unassociated parties and do not necessarily reflect the opinions of Vantage Financial Partners Limited. The sharing of this and all 3rd party links and resources is solely done as a courtesy to the reader and is not intended to imply support or agreement of the content or program. Vantage Financial Partners Limited does not promote, confirm nor necessarily agree with content provided by outside sources. Vantage Financial Partners Limited, Inc. and its agents are not tax advisors or accountants. We strongly encourage you review your tax situation, opportunities and liabilities with your tax advisor before making any changes. This article is not intended as tax advice.
Empower Illinois is a 501(c)(3) that provides low-income and working-class families the opportunity to explore new, quality K-12 education options through private school scholarships and advocating for innovation in Illinois education. This information is provided solely as a courtesy and is not to be considered a recommendation or promotion of this organization.