Donating to Illinois Tax Credit Scholarships--FAQs
Frequently Asked Questions
This is a summary of the most frequently asked questions from HFCA donors. If you have a question that is not addressed below, please contact Kate O’Brien firstname.lastname@example.org or Deb Atkins email@example.com and we will do our best to help resolve your question. We also encourage you to visit the Archdiocese of Chicago website, Empower Illinois website and as always, consult your personal tax advisor.
What are tax credit scholarships?
Tax credit scholarships provide an Illinois state income tax credit* to individuals and corporations equal to 75% of the funds contributed to assist qualifying families interested in non-public schools. Contributions are made to a non-profit Scholarship Granting Organization (SGO).
*Tax credits, unlike tax deductions are a dollar for dollar offset to a taxpayer’s tax liability.
What is a Scholarship Granting Organization?
A Scholarship Granting Organization (SGO) is an independent 501(c)(3) non-profit organization that is an intermediary between the donor, the state and the schools. The SGO we use is Empower Illinois which is responsible for:
- Receiving donations from individuals and corporations;
- Receiving and processing scholarship applications from students/families; and
- Distributing scholarships funds to schools--honoring designations of individual donors.
STEPS TO COMPLETE YOUR DONATION
Individual and corporate donors can reserve tax credits through mytax.illinois.gov by following these 4 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.
- CLICK HERE for step-by-step instructions on how to request a Letter ID.
CLICK HERE for step-by-step instructions on how to activate your my tax account.
2. 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 (NOTE: HFCA is Region 1--Cook County
- Name of SGO to which he/she plans to donate (the Archdiocese is partnering with Empower Illinois)
- Amount he/she plans to donate
- CLICK HERE for step-by-step instructions on how to apply for the credit
3. Donate to the SGO within 60 days of receiving your application approval and the Contribution Authorization Certificate. Designate the donation to Holy Family Catholic Academy.
4. Download and save your Contribution Authorization Certificate to use tax credit when filing a 2018 return in 2019.
How much money can be donated to an SGO for tax credit scholarships?Tax credits are capped at $1 million per taxpayer per year. Total tax credits for the entire state-wide program are capped at $75 million per year statewide, which equates to $100 million in donations and scholarships.
Can donations be directed to a specific school?
Individuals may direct donations to a particular school or subset of schools, but NOT to an individual student or group of students. Corporate donations can not be directed to a specific school, and those donations go to a general fund for distribution.
How do individuals direct their donations to a certain school or subset of schools? Donors can reserve tax credits and designate a particular school or subset of schools during the application process to an SGO. Once the application has been approved by the Illinois Department of Revenue, the individual can make a donation and designate the donation to a certain school or subset of schools.
Will I also be able to claim a charitable deduction on my US income tax return?No, you cannot take a tax credit under the Illinois TCS program if you claimed any portion of your contribution as a federal income tax deduction.
If I make a donation in December 2018, when will I be able to apply the tax credit? Donations completed in December 2018 will be reflected on your individual Illinois Income Tax return filed on or before April 15, 2019.
I already made a contribution to the TCS in January. Can I make additional contributions in December?Yes, as long as the total of all contributions do not exceed the $1million limit.
Will my donations made in January 2018 be eligible for the 2-for-1 match?No, only donations made from December 1 through February 28, 2019 will qualify for the special match.
What happens if my 75% income tax credit is greater than the amount of Illinois income tax I owe?
Unused credits from the TCS program may be carried forward for five years and applied to reduce future years' Illinois income tax liability.