Let's discuss the Illinois Invest in Kids Act and the benefits of making a charitable investment in kids through a scholarship granting organization (SGO) like Empower IL. The Invest in Kids Tax Credit Scholarship Program currently offers a 75% income tax credit to individuals and businesses that contribute to a SGO, like Empower IL. The SGO's then provide scholarship for students whose families meet the income requirements to attend qualified, non-public schools in Illinois. It’s also important to point out that you as the donor can choose which school in your region you would like to donate to. This is a TAX CREDIT and NOT a typical tax deduction on your state return. Right now, this charitable gifting opportunity is available through the 2021 tax year, so the time to take advantage is now!
Let’s run through a quick example:
Each year I donate $250 to a local, private school and I also have a $750 income tax liability through the State of IL. My total out of pocket for the year is $1000.
With the current tax credit scholarship program, I can now donate $1000 to a local, private school and with the 75% tax credit, I owe nothing for my state income tax liability. I am out of pocket the same amount, BUT I was able to quadruple my annual donation to the school.
This is a great program to take advantage of, especially if you are already donating to a qualified school. One caveat that I will mention if that the process is a little tedious, however, I have personally gone through it and would be more than happy to help.
Please reach out to your trusted wealth management team at Troxell Financial for more information or for step by step instructions on how to donate.