New program begins Jan. 1, 2018
One of the final actions of the extended spring session of the General Assembly was the passage of the Invest in Kids Act which, among other things, will allow Illinois taxpayers to receive a scholarship tax credit for making donations for scholarships to private schools — Catholic or otherwise — in Illinois.
Emergency administrative rules to implement the five-year pilot program were published late last month ahead of the Jan. 1, 2018 launch date when donations to scholarship granting organizations (SGO) can begin where donors can receive a 75 percent credit toward their state income taxes.
“Tax credits will be available on a first come, first served basis beginning Jan. 2, 2018,” said Bishop Thomas John Paprocki in an early December letter to major donors and supporters of the Diocese of Springfield in Illinois. “ … it is critical we move quickly to ensure we do not lose the opportunity to have the funds designated to Catholic schools in our diocese. Strong interest may cause this cap to be reached within minutes of opening.”
Both individuals and corporations can donate; however, only individuals can restrict their donation to individual schools or school groups. Corporate donors can only restrict gifts to judicial districts. The Springfield diocese is in judicial districts 4 and 5.
Scholarship granting organization
Think of an SGO as the clearinghouse for processing applications for scholarships to private schools. Once approved by the Illinois Department of Revenue (IDOR), a new nonprofit called Empower Illinois will serve as the statewide SGO for many Catholic schools in Illinois. Empower Illinois and its website are expected to be operational by mid-December.
The Catholic Conference of Illinois has worked closely with the legislature, Bishop Paprocki and his brother bishops on the particulars of how people can contribute and, importantly, how Catholic student families that meet income requirements can apply for scholarships.
Students whose families earn 300 percent of the federal poverty level or less ($73,800 for a family of four) will qualify. Once a student receives a scholarship, his or her family can earn up to 400 percent of the federal poverty level ($98,400 for a family of four). See chart on page 3.
In order to be a donor, donors must establish an account with IDNR’s My Tax Illinois (tax.illinois.gov).
Testing for results
As with all things Illinois, how the money is spent will meet with suspicion by opponents of the bill. All students who receive a scholarship must take the state assessment test and the state Board of Education will select an independent research organization to conduct an annual study to ascertain yearly learning gains of student recipients.
An informational bulletin about the Invest in Kids Act can be found at tax.illinois.gov in addition to other information.