| ||||||||||||||||||||||||
| ||||||||||||||||||||||||
| ||||||||||||||||||||||||
1 | AN ACT concerning revenue. | |||||||||||||||||||||||
2 | Be it enacted by the People of the State of Illinois, | |||||||||||||||||||||||
3 | represented in the General Assembly: | |||||||||||||||||||||||
4 | Section 5. The Illinois Income Tax Act is amended by | |||||||||||||||||||||||
5 | changing Section 224 as follows: | |||||||||||||||||||||||
6 | (35 ILCS 5/224) | |||||||||||||||||||||||
7 | Sec. 224. Invest in Kids credit. | |||||||||||||||||||||||
8 | (a) For taxable years beginning on or after January 1, | |||||||||||||||||||||||
9 | 2018 and ending before January 1, 2035 January 1, 2024 , each | |||||||||||||||||||||||
10 | taxpayer for whom a tax credit has been awarded by the | |||||||||||||||||||||||
11 | Department under the Invest in Kids Act is entitled to a credit | |||||||||||||||||||||||
12 | against the tax imposed under subsections (a) and (b) of | |||||||||||||||||||||||
13 | Section 201 of this Act in an amount equal to the amount | |||||||||||||||||||||||
14 | awarded under the Invest in Kids Act. | |||||||||||||||||||||||
15 | (b) For taxable years ending before December 31, 2023, for | |||||||||||||||||||||||
16 | partners, shareholders of subchapter S corporations, and | |||||||||||||||||||||||
17 | owners of limited liability companies, if the liability | |||||||||||||||||||||||
18 | company is treated as a partnership for purposes of federal | |||||||||||||||||||||||
19 | and State income taxation, the credit under this Section shall | |||||||||||||||||||||||
20 | be determined in accordance with the determination of income | |||||||||||||||||||||||
21 | and distributive share of income under Sections 702 and 704 | |||||||||||||||||||||||
22 | and subchapter S of the Internal Revenue Code. For taxable | |||||||||||||||||||||||
23 | years ending on or after December 31, 2023, partners and |
| |||||||
| |||||||
1 | shareholders of subchapter S corporations are entitled to a | ||||||
2 | credit under this Section as provided in Section 251. | ||||||
3 | (c) The credit may not be carried back and may not reduce | ||||||
4 | the taxpayer's liability to less than zero. If the amount of | ||||||
5 | the credit exceeds the tax liability for the year, the excess | ||||||
6 | may be carried forward and applied to the tax liability of the | ||||||
7 | 5 taxable years following the excess credit year. The tax | ||||||
8 | credit shall be applied to the earliest year for which there is | ||||||
9 | a tax liability. If there are credits for more than one year | ||||||
10 | that are available to offset the liability, the earlier credit | ||||||
11 | shall be applied first. | ||||||
12 | (d) A tax credit awarded by the Department under the | ||||||
13 | Invest in Kids Act may not be claimed for any qualified | ||||||
14 | contribution for which the taxpayer claims a federal income | ||||||
15 | tax deduction. | ||||||
16 | (Source: P.A. 102-699, eff. 4-19-22; 103-396, eff. 1-1-24 .) | ||||||
17 | Section 10. The Invest in Kids Act is amended by changing | ||||||
18 | Sections 40 and 65 as follows: | ||||||
19 | (35 ILCS 40/40) | ||||||
20 | (Section scheduled to be repealed on January 1, 2025) | ||||||
21 | Sec. 40. Scholarship granting organization | ||||||
22 | responsibilities. | ||||||
23 | (a) Before granting a scholarship for an academic year, | ||||||
24 | all scholarship granting organizations shall assess and |
| |||||||
| |||||||
1 | document each student's eligibility for the academic year. | ||||||
2 | (b) A scholarship granting organization shall grant | ||||||
3 | scholarships only to eligible students. | ||||||
4 | (c) A scholarship granting organization shall allow an | ||||||
5 | eligible student to attend any qualified school of the | ||||||
6 | student's choosing, subject to the availability of funds. | ||||||
7 | (d) In granting scholarships, beginning in the 2022-2023 | ||||||
8 | school year and for each school year thereafter, a scholarship | ||||||
9 | granting organization shall give priority to eligible students | ||||||
10 | who received a scholarship from a scholarship granting | ||||||
11 | organization during the previous school year. Second priority | ||||||
12 | shall be given to the following priority groups: | ||||||
13 | (1) (blank); | ||||||
14 | (2) eligible students who are members of a household | ||||||
15 | whose previous year's total annual income does not exceed | ||||||
16 | 185% of the federal poverty level; | ||||||
17 | (3) eligible students who reside within a focus | ||||||
18 | district; and | ||||||
19 | (4) eligible students who are siblings of students | ||||||
20 | currently receiving a scholarship. | ||||||
21 | (d-5) A scholarship granting organization shall begin | ||||||
22 | granting scholarships no later than February 1 preceding the | ||||||
23 | school year for which the scholarship is sought. Each priority | ||||||
24 | group identified in subsection (d) of this Section shall be | ||||||
25 | eligible to receive scholarships on a first-come, first-served | ||||||
26 | basis until April 1 immediately preceding the school year for |
| |||||||
| |||||||
1 | which the scholarship is sought, starting with the first | ||||||
2 | priority group identified in subsection (d) of this Section. | ||||||
3 | Applications for scholarships for eligible students meeting | ||||||
4 | the qualifications of one or more priority groups that are | ||||||
5 | received before April 1 must be either approved or denied | ||||||
6 | within 10 business days after receipt. Beginning April 1, all | ||||||
7 | eligible students shall be eligible to receive scholarships | ||||||
8 | without regard to the priority groups identified in subsection | ||||||
9 | (d) of this Section. | ||||||
10 | (e) Except as provided in subsection (e-5) of this | ||||||
11 | Section, scholarships shall not exceed the lesser of (i) the | ||||||
12 | statewide average operational expense per student among public | ||||||
13 | schools or (ii) the necessary costs and fees for attendance at | ||||||
14 | the qualified school. A qualified school may set a lower | ||||||
15 | maximum scholarship amount for eligible students whose family | ||||||
16 | income falls within paragraphs (2) and (3) of this subsection | ||||||
17 | (e); that amount may not exceed the necessary costs and fees | ||||||
18 | for attendance at the qualified school and is subject to the | ||||||
19 | limitations on average scholarship amounts set forth in | ||||||
20 | paragraphs (2) and (3) of this subsection, as applicable. The | ||||||
21 | qualified school shall notify the scholarship granting | ||||||
22 | organization of its necessary costs and fees as well as any | ||||||
23 | maximum scholarship amount set by the school. Scholarships | ||||||
24 | shall be prorated as follows: | ||||||
25 | (1) for eligible students whose household income is | ||||||
26 | less than 185% of the federal poverty level, the |
| |||||||
| |||||||
1 | scholarship shall be 100% of the amount determined | ||||||
2 | pursuant to this subsection (e) and subsection (e-5) of | ||||||
3 | this Section; | ||||||
4 | (2) for eligible students whose household income is | ||||||
5 | 185% or more of the federal poverty level but less than | ||||||
6 | 250% of the federal poverty level, the average of | ||||||
7 | scholarships shall be 75% of the amount determined | ||||||
8 | pursuant to this subsection (e) and subsection (e-5) of | ||||||
9 | this Section; and | ||||||
10 | (3) for eligible students whose household income is | ||||||
11 | 250% or more of the federal poverty level, the average of | ||||||
12 | scholarships shall be 50% of the amount determined | ||||||
13 | pursuant to this subsection (e) and subsection (e-5) of | ||||||
14 | this Section. | ||||||
15 | (e-5) The statewide average operational expense per | ||||||
16 | student among public schools shall be multiplied by the | ||||||
17 | following factors: | ||||||
18 | (1) for students determined eligible to receive | ||||||
19 | services under the federal Individuals with Disabilities | ||||||
20 | Education Act, 2; | ||||||
21 | (2) for students who are English learners, as defined | ||||||
22 | in subsection (d) of Section 14C-2 of the School Code, | ||||||
23 | 1.2; and | ||||||
24 | (3) for students who are gifted and talented children, | ||||||
25 | as defined in Section 14A-20 of the School Code, 1.1. | ||||||
26 | (f) A scholarship granting organization shall distribute |
| |||||||
| |||||||
1 | scholarship payments to the participating school where the | ||||||
2 | student is enrolled. | ||||||
3 | (g) For the 2018-2019 school year through the 2033-2034 | ||||||
4 | 2022-2023 school year, each scholarship granting organization | ||||||
5 | shall expend no less than 75% of the qualified contributions | ||||||
6 | received during the calendar year in which the qualified | ||||||
7 | contributions were received. No more than 25% of the qualified | ||||||
8 | contributions may be carried forward to the following calendar | ||||||
9 | year. | ||||||
10 | (h) For the 2034-2035 2023-2024 school year, each | ||||||
11 | scholarship granting organization shall expend all qualified | ||||||
12 | contributions received during the calendar year in which the | ||||||
13 | qualified contributions were received. No qualified | ||||||
14 | contributions may be carried forward to the following calendar | ||||||
15 | year. | ||||||
16 | (i) A scholarship granting organization shall allow an | ||||||
17 | eligible student to transfer a scholarship during a school | ||||||
18 | year to any other participating school of the custodian's | ||||||
19 | choice. Such scholarships shall be prorated. | ||||||
20 | (j) With the prior approval of the Department, a | ||||||
21 | scholarship granting organization may transfer funds to | ||||||
22 | another scholarship granting organization if additional funds | ||||||
23 | are required to meet scholarship demands at the receiving | ||||||
24 | scholarship granting organization. All transferred funds must | ||||||
25 | be deposited by the receiving scholarship granting | ||||||
26 | organization into its scholarship accounts. All transferred |
| |||||||
| |||||||
1 | amounts received by any scholarship granting organization must | ||||||
2 | be separately disclosed to the Department. | ||||||
3 | (k) If the approval of a scholarship granting organization | ||||||
4 | is revoked as provided in Section 20 of this Act or the | ||||||
5 | scholarship granting organization is dissolved, all remaining | ||||||
6 | qualified contributions of the scholarship granting | ||||||
7 | organization shall be transferred to another scholarship | ||||||
8 | granting organization. All transferred funds must be deposited | ||||||
9 | by the receiving scholarship granting organization into its | ||||||
10 | scholarship accounts. | ||||||
11 | (l) Scholarship granting organizations shall make | ||||||
12 | reasonable efforts to advertise the availability of | ||||||
13 | scholarships to eligible students. | ||||||
14 | (Source: P.A. 102-699, eff. 4-19-22; 102-1059, eff. 6-10-22; | ||||||
15 | 103-154, eff. 6-30-23.) | ||||||
16 | (35 ILCS 40/65) | ||||||
17 | (Section scheduled to be repealed on January 1, 2025) | ||||||
18 | Sec. 65. Credit period; repeal. | ||||||
19 | (a) A taxpayer may take a credit under this Act for tax | ||||||
20 | years beginning on or after January 1, 2018 and ending before | ||||||
21 | January 1, 2035 January 1, 2024 . A taxpayer may not take a | ||||||
22 | credit pursuant to this Act for tax years beginning on or after | ||||||
23 | January 1, 2035 January 1, 2024 . It is the intent of the | ||||||
24 | General Assembly that the credit under this Act applies | ||||||
25 | continuously for all periods beginning on or after January 1, |
| |||||||
| |||||||
1 | 2018 and ending before January 1, 2035, including, but not | ||||||
2 | limited to, the period from January 1, 2024 through the | ||||||
3 | effective date of this amendatory Act of the 103rd General | ||||||
4 | Assembly. | ||||||
5 | (b) This Act is repealed on January 1, 2036 January 1, | ||||||
6 | 2025 . | ||||||
7 | (Source: P.A. 102-16, eff. 6-17-21.) | ||||||
8 | Section 99. Effective date. This Act takes effect upon | ||||||
9 | becoming law. |