The Illinois Gives Tax Credit became effective January 1, 2025, and is an exciting way for charitably inclined individuals or businesses who pay Illinois income taxes to get more tax savings out of their charitable donations.
Effective January 1, 2025, authorized contributions made to ‘Qualified Charitable Foundations (QCFs)’ are allowed a 25% Illinois tax credit against their state liability, up to $100,000 per taxpayer (Married taxpayers who file a joint tax return may receive up to $200,000 of credit if each individual contributes the maximum amount to a QCF). Excess credits above the taxpayer’s yearly liability will roll forward to future tax periods.
Unlike normal contributions that do not have any benefit for a taxpayer’s Illinois tax return, these contributions allow an opportunity to help directly offset the state liability, while still receiving a federal deduction for the remaining portion.
For example, a taxpayer who makes a $100,000 authorized contribution to a QCF would receive a $25,000 credit towards their Illinois liability, and then receive a $75,000 itemized deduction for the remaining amount of the charitable donation. Please reach out to a member of the Miller Cooper team who can evaluate these contributions for your individual situation.
What Is an Authorized Contribution?
Authorized contributions are donations made to a permanent endowment fund for a specified QCF, specifically approved by Illinois. These donations must be made by either an individual or business and are not allowed to be made by a Donor Advised Fund. Donations can be any asset that the QCF receives per the organizations gifting policy, which can include appreciated securities or cash.
The state is limiting the amount of credit they authorize for all taxpayers, so it is advised to seek approval before making any donations. To apply for the credit, follow instructions through your online MyTax Illinois account. Upon applying and receiving a Contribution Authorization Certificate, make the applicable contribution within ten business days. The QCF you contribute to will provide a certificate needed to claim the credit. Please maintain all records and provide to your tax adviser when received.
The state is limiting the amount of credits available ($5 million statewide), so taxpayers are advised to act quickly if they want to take advantage of the program.
What QCFs Can I Donate To?
MyTax Illinois lists the available QCFs, which is changing daily with the authorized contributions to date and receipted contributions. Here is a partial list of eligible QCFs currently listed by the state:
• Community Foundation for the Land of Lincoln
• Community Foundation of Northern Illinois
• Community Foundation of the Quincy Area
• Galesburg Community Foundation
• Highland Park Community Foundation
• Illinois Prairie Community Foundation
• Jewish Federation of Metropolitan Chicago
• Moline Foundation
• Morton Community Foundation
• Peoria Area Community Foundation
• Quad Cities Community Foundation
• The Community Foundation of Macon County
Miller Cooper is excited to help you take advantage of this opportunity if you wish to pursue it as part of your charitable gifting strategy for the tax year. Please reach out to your adviser if you have any questions regarding how this can work for your individual situation.
