The new Illinois Tax Credit Scholarship Program allows individuals and corporations to donate to Scholarship Granting Organizations (SGOs) and receive a credit on their Illinois state taxes in return. An SGO is a 501(c)(3) non-profit organization, approved by the IL Department of Revenue, whose primary aim is to give scholarships to qualifying students.
Who qualifies for these scholarships?
Students whose families earn 300% of the federal poverty level or less ($73,800 for a family of four) qualify, and priority is given to students who are members of a household whose previous year’s total annual income does not exceed 185% of the federal poverty level ($45,510 for a family of four).
At Cristo Rey St. Martin, the average family income of the students we serve is $39,516 and the average family size is 4.7 people. All of our students qualify for the scholarship, and most of our students are in the priority category.
In the first year of this program, 103 CRSM students, roughly 26% of the student body, were awarded scholarships totaling over $1,200,000 – these funds were much needed tuition dollars for both the CRSM students as well as the school. Many more students applied but there were not enough scholarship funds to distribute. Due to such high student demand for these scholarships, they are only awarded to a fraction of the students who apply, and there is no guarantee that the 103 students awarded the scholarship in 2018-19 will receive an award again in 2019-20. CRSM will continue to meet with every student to ensure that the tuition the family has to pay does not place a tremendous burden on them, but these scholarships go a long way to helping offset the cost of education at CRSM.
What is the benefit to a donor?
An individual or corporation will receive a 75% credit on their donation to an SGO. This means that if a donor donates $10,000, they will receive a state tax credit of $7,500.
- Tax credits by both individual and corporate donors are capped at $1 million.
- Individual donors can direct their donations to Cristo Rey St. Martin (Region 2) through the SGO.
- Corporate donors cannot designate their donation to any particular school, but they will have to designate a region, and CRSM resides in Region 2.
- The credit is non-refundable, but can be carried forward for five years.
- Donors are prohibited from receiving a federal tax deduction for these donations.
The Illinois Tax Credit Scholarship Program has a cap of $100 million in donations, resulting in $75 million in total tax credits issued.
As a donor, what is the process?
Click here to download step-by-step instructions you can use or you can provide to your tax preparer. Or you can follow the steps below:
- If you do not have a My Tax Illinois account, you must request a “Letter ID” from the Illinois Department of Revenue, via the My Tax Illinois website, which will be sent via US Mail within 7 to 10 business days.
- Once you receive your “Letter ID,” you will be able to create an account. Here is a helpful video on how to create your account:
- Once you have your letter ID, you can reserve your tax credits through the My Tax Illinois website. You will find the link in the “I want to…” section when you log into your account, and you should click on the “Contribute to Invest in Kids” hyperlink to make your reservation. You will need to specify the following:
- Social Security Number
- Personal (or company) name and contact information
- Name of SGO to which he/she plans to donate (Note: There are several approved SGOs at this time, we recommend Big Shoulders Fund or Empower Illinois)
- Amount he/she plans to donate
- Region to which he/she plans to donate (Cristo Rey St. Martin is in Region 2)
You will receive your Contribution Authorization Certificate via your My Tax Illinois account within 3 days. You then have 60 days (or until December 31, whichever comes first) to donate the amount you reserved to the SGO of your choice. For individuals, you may request to the SGO that your contribution be directed specifically to Cristo Rey St. Martin College Prep. If you choose to direct the funds to CRSM, please specify that the SGO may release your name to CRSM so that we are aware of your contribution.
After donating, the donor will receive a certificate of receipt from the SGO indicating a donation was made. The SGO will notify the IL Department of Revenue that a donation was made.
If a donor does not donate or gives less than they indicated to the IL Department of Revenue, they will not receive ANY tax credit.
The Illinois Department of Revenue has updated their website with additional information on this program. For more details, see tax.illinois.gov.
Please contact Reese Marcusson at email@example.com.