How to Make a Donation to the Illinois Tax Credit Scholarship (TCS)
Invest in Kids Act
Why pay taxes to Illinois, when you can get a state tax credit by making a donation to Illinois Lutheran? What is it?
This Illinois Tax Credit Scholarship program allows individuals to donate to Scholarship Granting Organizations (SGOs) and receive a tax credit for their IL 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 grant scholarships to qualifying Illinois grammar school and high school students, allowing them to attend a private school in the state of Illinois. The SGO that you should designate your donations to is Empower Illinois.
What is the benefit to a donor?
Donor will receive a 75% Illinois state tax credit on their donation under this program.
For example: If a donor gives $1,000, then they will receive a state tax credit of $750.
A donation under this program is much more beneficial than a typical charitable contribution, because you get a tax reduction of 75% of your donation, but a typical charitable contribution would only give you a tax reduction of 0% to 37% (2018 individual tax rate ranges). This is because you get a tax credit under this program and not a less beneficial tax deduction.
Other key information:
- Donations under this program are not paid to Illinois Lutheran Schools but rather to Empower Illinois, which is our designated Scholarship Granting Organization (SGO). An SGO is a 501(c)(3) non-profit organization, approved by the IL Department of Revenue, whose primary aim is to grant scholarships to qualifying Illinois grammar school and high school students, allowing them to attend a private school in the state of Illinois.
- The credit is non-refundable, but if not all utilized can be carried forward for five years (through 2022).
- Donors are prohibited from receiving a federal tax deduction for these donations.
Why pay taxes to Illinois, when you can get a state tax credit by making a donation?
How do I make a donation?
- Donors must have a MyTax Illinois account.
- If you don’t have an account go to https://mytax.illinois.gov/ and click “Individuals” and then on “Request a Letter ID” under Miscellaneous.
- After you follow the directions, you will be mailed a Letter ID within 7-10 business days, which will give you instructions on how to activate your account at https://mytax.illinois.gov/ under “Login to MyTax Illinois” and by clicking “Sign Up Now!”
- This tax account will be used to apply for the tax credit (See STEP 2 below).
- Go to mytax.illinois.gov and login to your MyTax Illinois account, using the login information from Step 1.
- Once you are in your MyTax account, click on your income tax account (under Account Type – click on Individual).
- Under the “I Want To” section (upper right side of screen), click on the “Contribute to Invest in Kids” hyperlink to request the income tax credit.
- First, you’ll need to click a box with the following statement: ”I acknowledge I cannot take an Illinois Invest in Kids tax credit for any contributions that I claim as federal income tax deductions” and then click next.
- You’ll need to enter the following in the next screen:
- Chose a Region: Select Region 3
- Chose a Scholarship Granting Organization: Select Empower Illinois
- Contribution: Enter the amount you want to donate in both the contribution pledge and confirm amount fields.
- Once your application has been submitted, and the Illinois Department of Revenue confirms that credits are available, the Department will issue you a Contribution Authorization Certificate (CAC). The CAC will be issued electronically to your MyTax Illinois account within three business days of approval of your application. Note that you’ll have to login into your My Tax Account to get your CAC.
- After reserving the tax credit, then you will have 60 days to donate the amount you entered as a contribution in Step 2. above to Empower Illinois (ILS’s designated SGO).
- Go to https://empowerillinois.org/donors/donate/ for directions on how to make your donation. You can either mail your payment or donate on-line and have your donation debited from your bank account. When completing the donation form to send your payment by mail or donating on-line, you’ll need to:
- Enter the Region that ILS is located, which again is Region 3
- Enter Illinois Lutheran Schools – Crete, IL as the designated school. If you don’t do this, then other schools besides ILS will get the benefit of your donation.
- If a donor reserves a credit and then does not donate or gives less than they indicated to the IL Department of Revenue, they will not receive any tax credit.