How to Maximize Your Giving with the Illinois Gives Tax Credit

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Phone: (630) 953-4900 | Fax: (630) 953-4905

Karen Snodgrass

CPA | CK Principal

Illinois taxpayers looking to give back while receiving a tax benefit now have a new opportunity with the Illinois Gives Tax Credit Act. Effective January 1, 2025, the act allows donors to receive a 25% state tax credit for qualified charitable contributions made to permanent endowments at approved community foundations.

However, the State has capped the program at $5 million in total tax credits per calendar year through 2029. Additionally, the credits are distributed based on the order in which the donations are received. Because of these limitations, we recommend that you act early if interested in the credit.

Organizations eligible for donations

Only permanent endowment funds held by Qualified Community Foundations are eligible to receive donations that generate the credit.

Donations can support or establish funds that:

Provide charitable grants exclusively for the benefit of residents of Illinois or charities and charitable projects located in Illinois,
Exist in perpetuity
Have an annual spending rate based on the foundation spending policy (not to exceed 7%), and
Are not a donor advised fund

Qualified Community Foundations are specifically designated as such by the State. Additionally, each Qualified Community Foundation can issue up to $750,000 in credits per year (15% of the $5 million available in total annual credits).

Be sure to inquire on eligibility before starting the contribution process.

State tax benefits

The Illinois Gives Tax Credit offers a limited amount of State tax credits no matter if donors itemize or take the standard federal deduction.

Individuals can receive up to $100,000 in state tax credits per year
Couples can receive up to $200,000
25% of total credits are set aside for smaller gifts of $25,000 or less

The credit can only offset your state income tax liability each year. Any excess credit is carried forward and applied to your tax liability in the subsequent five taxable years.

Donors should apply online at MyTax.Illinois.gov and request a Contribution Authorization Certificate (CAC). Once the CAC is received, you have 10 business days to make your gift to a Qualified Community Foundation.

Have more questions?

If you have questions about the Illinois Gives Tax Credit or are ready to take advantage of the new credit but need assistance, contact Cray Kaiser at 630-935-4900 or visit here.