The Illinois Gives Tax Credit Act, created in 2025, aims to reverse the decline in charitable giving and provide a stable source of funding for nonprofits in Illinois. This legislation offers a 25% state income tax credit to donors who contribute to eligible permanent endowment funds held at Qualified Community Foundations (QCFs) supporting Illinois charities and projects. The tax credit is awarded on a first-come, first-served basis, with a maximum annual credit of $100,000 per taxpayer and $200,000 per couple. The act is designed to incentivize charitable donations by providing substantial tax benefits, thereby encouraging more robust community investment and ensuring that vital resources reach organizations, making a positive difference across the state.
The program operates on a "first-come, first-served" basis due to limited annual funding, with applications beginning on January 1 of each year. To claim the Illinois Gives Tax Credit, donors must follow a specific process, including creating an account on MyTaxIllinois.gov, applying for a Contribution Authorization Certification (CAC), and making a gift to an eligible community foundation endowment fund. The tax credit is not transferable or refundable but can be carried forward up to five years to apply against future tax liabilities. The Illinois Department of Revenue can issue up to $5 million in tax credits per calendar year, with no single QCF receiving more than 15% of the statewide total. This strategic effort by the state government leverages tax policy to support the nonprofit sector, ensuring that charitable gifts benefit causes and programs within Illinois, led by QCFs. If you live outside of Illinois, you may want to look into whether your state offers tax incentive programs like IL Gives.