Illinois would list scholarship groups for a federal tax credit

The State Board of Education would send the federal government and publish a list of eligible scholarship-granting organizations located in Illinois. The list would cover organizations that meet the federal requirements for scholarship-granting organizations under Internal Revenue Code Section 25f and are located in Illinois. The State Board would have to certify its authority to submit the list for Illinois. The Board would have to follow Section 25f, related federal rules, and federal guidance. The Board may set rules for organizations to show that they qualify and may work with other State agencies. The Act would take effect when it becomes law, and the listing duty would support participation in taxable years beginning after December 31, 2026.

Illinois would elect to participate in the federal tax credit for people who make qualifying donations to in-state scholarship groups, and the State Board would follow federal rules. The election would cover qualifying contributions to scholarship-granting organizations located in Illinois under Internal Revenue Code Section 25f. Participation would depend on compliance with Section 25f, its regulations, and federal guidance. The election would not itself guarantee that a donor receives a tax credit or that a student receives a scholarship. The Act would take effect when it becomes law, and the State would seek eligibility for taxable years beginning after December 31, 2026.

Qualifying scholarship groups on the State Board's list may provide scholarships for eligible elementary and secondary education expenses. Eligible expenses may include nonpublic school expenses and other expenses allowed under federal law for eligible students. Scholarship groups must be on the list submitted by the State Board. Scholarships must follow Internal Revenue Code Section 25f and applicable federal regulations and guidance. The scholarships may cover only expenses allowed under federal law. The provision would apply when the Act takes effect upon becoming law, subject to the federal program's rules and timing.