Invest in Kids Act Tax Credit Scholarship

The State of Illinois has created a way to fund scholarships for children who choose to attend Catholic schools through the “Invest in Kids Act.” Scholarships offered through this program have the potential to cover up to 100 percent of tuition and eligible charges for next school year at St. Bede Academy.

The Empower Illinois Scholarship Granting Organization website (www.empowerillinois.org) is now operational and is accepting applications for the 2022-2023 school year.

Continue reading to learn more about the Invest in Kids Act: Tax Credit Scholarship or contact Julia Yaklich with questions at jyaklich@st-bede.com or 815-250-0359.

Tax Credit Scholarship Opportunity for Donors

Illinois enacted the Invest In Kids Scholarship Tax Credit Program in 2017 which establishes a comprehensive Illinois scholarship program for low-income, qualifying students attending non-public schools, like St. Bede, in Illinois. It provides up to $75 million in tax credits annually for Illinois taxpayers who contribute to fund the scholarships.

How it Works

Individual and corporate donors go to a Department of Revenue website and apply to make a “contribution” and reserve Illinois tax credits equaling 75% of their contribution. Tax credits will be reserved on a first-come, first-serve basis up to $75 million, with a maximum tax credit of $1 million per donor (and a maximum contribution of $1,333,333 per donor.)

If a donor’s application to make a contribution and reserve tax credits is approved, the donor will be issued a certificate of authorization from the Department of Revenue, and will have 60 days to pay the full amount of his approved contribution. The donor must pay the contribution to a State-Approved Scholarship Granting Organization (SGO); however, an individual, non-corporate donor may designate a school such as St. Bede as the ultimate recipient of the contribution. In that case, the SGO will then pay St. Bede the full amount of the designated contribution, which must be used by the school for scholarship purposes. In the meantime, the donor will be entitled to an Illinois tax credit equal to 75% of his/her contribution.

Please note: the donor cannot take a federal tax deduction as well.

For Example

If a donor makes a $10,000 approved contribution to an SGO and designates St. Bede as the recipient, the donor will receive a state tax credit—not merely a tax deduction—of $7,500. After applying the Illinois tax credit, the net cost to the donor will be $2,500, while St. Bede receives the full $10,000 contribution as a scholarship to support a qualifying student.

If the same donor increases his/her approved contribution to the SGO to $20,000 while still designating St. Bede as the recipient, the donor will receive a state tax credit of $15,000. In that case, the net cost to the donor, after the Illinois tax credit, will be $5,000, and St. Bede will receive the full $20,000 contribution amount as a scholarship for a qualifying student.

What we suggest you do *Please reference this step by step process on how to set up your MyTax account [PDF].

• Speak to your tax professional about whether this program is right for you.

• If you wish to reserve tax credits, you are required to have a State of Illinois “MyTax” account. If you don’t have a “MyTax” account, you can open one at mytax.illinois.gov. As part of the process, you will need to apply for a “Letter ID” (allow 7-10 days to receive by mail).

• Keep an eye out for email updates from St. Bede as more specific regulations regarding the tax credit scholarship legislation are being finalized by the Illinois Department of Revenue.