State of Illinois
2021 and 2022


Introduced 1/31/2022, by Rep. Angelica Guerrero-Cuellar


35 ILCS 40/5
35 ILCS 40/10
35 ILCS 40/40
35 ILCS 40/65

    Amends the Invest in Kids Act. Provides that non-public pre-kindergarten schools are considered qualified schools. Provides that the credit shall be in the amount of 100% (currently, 75%) of the contribution. Provides that the credit may not exceed $1,333,333 per taxpayer (currently, $1,000,000). Establishes priority groups for the awarding of scholarships. Makes other changes. Effective immediately.

LRB102 25142 HLH 34404 b





HB5461LRB102 25142 HLH 34404 b

1    AN ACT concerning revenue.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Invest in Kids Act is amended by changing
5Sections 5, 10, 40, and 65 as follows:
6    (35 ILCS 40/5)
7    (Section scheduled to be repealed on January 1, 2025)
8    Sec. 5. Definitions. As used in this Act:
9    "Authorized contribution" means the contribution amount
10that is listed on the contribution authorization certificate
11issued to the taxpayer.
12    "Board" means the State Board of Education.
13    "Contribution" means a donation made by the taxpayer
14during the taxable year for providing scholarships as provided
15in this Act.
16    "Custodian" means, with respect to eligible students, an
17Illinois resident who is a parent or legal guardian of the
18eligible student or students.
19    "Department" means the Department of Revenue.
20    "Eligible student" means a child who:
21        (1) is a member of a household whose federal adjusted
22    gross income the year before he or she initially receives
23    a scholarship under this program, as determined by the



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1    Department, does not exceed 300% of the federal poverty
2    level and, once the child receives a scholarship, does not
3    exceed 400% of the federal poverty level;
4        (2) is eligible to attend a pre-kindergarten school,
5    public elementary school, or high school in Illinois in
6    the semester immediately preceding the semester for which
7    he or she first receives a scholarship or is starting
8    school in Illinois for the first time when he or she first
9    receives a scholarship; and
10        (3) resides in Illinois while receiving a scholarship.
11    "Family member" means a parent, child, or sibling, whether
12by whole blood, half blood, or adoption; spouse; or stepchild.
13    "Focus district" means a school district which has a
14school that is either (i) a school that has one or more
15subgroups in which the average student performance is at or
16below the State average for the lowest 10% of student
17performance in that subgroup or (ii) a school with an average
18graduation rate of less than 60% and not identified for
20    "Jointly administered CTE program" means a program or set
21of programs within a non-public school located in Illinois, as
22determined by the State Board of Education pursuant to Section
237.5 of this Act.
24    "Necessary costs and fees" includes the customary charge
25for instruction and use of facilities in general and the
26additional fixed fees charged for specified purposes that are



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1required generally of non-scholarship recipients for each
2academic period for which the scholarship applicant actually
3enrolls, including costs associated with student assessments,
4but does not include fees payable only once and other
5contingent deposits that are refundable in whole or in part.
6The Board may prescribe, by rules consistent with this Act,
7detailed provisions concerning the computation of necessary
8costs and fees.
9    "Scholarship granting organization" means an entity that:
10        (1) is exempt from taxation under Section 501(c)(3) of
11    the Internal Revenue Code;
12        (2) uses at least 95% of the qualified contributions
13    received during a taxable year for scholarships;
14        (3) provides scholarships to students according to the
15    guidelines of this Act;
16        (4) deposits and holds qualified contributions and any
17    income derived from qualified contributions in an account
18    that is separate from the organization's operating fund or
19    other funds until such qualified contributions or income
20    are withdrawn for use; and
21        (5) is approved to issue certificates of receipt.
22    "Technical academy" means a non-public school located in
23Illinois that: (1) registers with the Board pursuant to
24Section 2-3.25 of the School Code; and (2) operates or will
25operate a jointly administered CTE program as the primary
26focus of the school. To maintain its status as a technical



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1academy, the non-public school must obtain recognition from
2the Board pursuant to Section 2-3.25o of the School Code
3within 2 calendar years of its registration with the Board.
4    "Qualified contribution" means the authorized contribution
5made by a taxpayer to a scholarship granting organization for
6which the taxpayer has received a certificate of receipt from
7such organization.
8    "Qualified school" means a non-public school, including a
9non-public pre-kindergarten school, located in Illinois and
10recognized by the Board pursuant to Section 2-3.25o of the
11School Code.
12    "Scholarship" means an educational scholarship awarded to
13an eligible student to attend a qualified school of their
14custodians' choice in an amount not exceeding the necessary
15costs and fees to attend that school.
16    "Taxpayer" means any individual, corporation, partnership,
17trust, or other entity subject to the Illinois income tax. For
18the purposes of this Act, 2 individuals filing a joint return
19shall be considered one taxpayer.
20(Source: P.A. 102-16, eff. 6-17-21.)
21    (35 ILCS 40/10)
22    (Section scheduled to be repealed on January 1, 2025)
23    Sec. 10. Credit awards.
24    (a) The Department shall award credits against the tax
25imposed under subsections (a) and (b) of Section 201 of the



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1Illinois Income Tax Act to taxpayers who make qualified
2contributions. For contributions made under this Act, the
3credit shall be equal to 100% 75% of the total amount of
4qualified contributions made by the taxpayer during a taxable
5year, not to exceed a credit of $1,333,333 $1,000,000 per
7    (b) The aggregate amount of all credits the Department may
8award under this Act in any calendar year may not exceed
10    (c) Contributions made by individuals, corporations
11(including Subchapter S corporations), partnerships, and
12trusts under this Act may not be directed to a particular
13subset of schools, a particular school, a particular group of
14students, or a particular student. Contributions made by
15individuals under this Act may be directed to a particular
16subset of schools or a particular school but may not be
17directed to a particular group of students or a particular
19    (d) (Blank). No credit shall be taken under this Act for
20any qualified contribution for which the taxpayer claims a
21federal income tax deduction.
22    (e) Credits shall be awarded in a manner, as determined by
23the Department, that is geographically proportionate to
24enrollment in recognized non-public schools in Illinois. If
25the cap on the aggregate credits that may be awarded by the
26Department is not reached by June 1 of a given year, the



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1Department shall award remaining credits on a first-come,
2first-served basis, without regard to the limitation of this
4    (f) Credits awarded for donations made to a technical
5academy shall be awarded without regard to subsection (e), but
6shall not exceed 15% of the annual statewide program cap. For
7the purposes of this subsection, "technical academy" means a
8technical academy that is registered with the Board within 30
9days after the effective date of this amendatory Act of the
10102nd General Assembly.
11(Source: P.A. 102-16, eff. 6-17-21.)
12    (35 ILCS 40/40)
13    (Section scheduled to be repealed on January 1, 2025)
14    Sec. 40. Scholarship granting organization
16    (a) Before granting a scholarship for an academic year,
17all scholarship granting organizations shall assess and
18document each student's eligibility for the academic year.
19    (b) A scholarship granting organization shall grant
20scholarships only to eligible students.
21    (c) A scholarship granting organization shall allow an
22eligible student to attend any qualified school of the
23student's choosing, subject to the availability of funds.
24    (d) In granting scholarships, beginning in the 2022-2023
25school year and for each school year thereafter, a scholarship



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1granting organization shall give priority to eligible students
2who received a scholarship from a scholarship granting
3organization during the previous school year. Second priority
4shall be given to the following priority groups:
5        (1) (blank); eligible students who received a
6    scholarship from a scholarship granting organization
7    during the previous school year;
8        (2) eligible students who are members of a household
9    whose previous year's total annual income does not exceed
10    185% of the federal poverty level;
11        (3) eligible students who reside within a focus
12    district; and
13        (4) eligible students who are siblings of students
14    currently receiving a scholarship.
15    (d-5) A scholarship granting organization shall begin
16granting scholarships no later than February 1 preceding the
17school year for which the scholarship is sought. Each The
18priority group groups identified in subsection (d) of this
19Section shall be eligible to receive scholarships on a
20first-come, first-served basis until the April 1 immediately
21preceding the school year for which the scholarship is sought
22starting with the first priority group identified in
23subsection (d) of this Section.. Applications for scholarships
24for eligible students meeting the qualifications of one or
25more priority groups that are received before April 1 must be
26either approved or denied within 10 business days after



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1receipt. Beginning April 1, all eligible students shall be
2eligible to receive scholarships without regard to the
3priority groups identified in subsection (d) of this Section.
4    (e) Except as provided in subsection (e-5) of this
5Section, scholarships shall not exceed the lesser of (i) the
6statewide average operational expense per student among public
7schools; or (ii) the necessary costs and fees for attendance
8at the qualified school; or (iii) the maximum scholarship
9amount set by the qualified school, if the qualified school
10chooses to set such an amount, which may not exceed the
11necessary costs and fees for attendance at the qualified
12school. The qualified school shall notify the scholarship
13granting organization of its necessary costs and fees as well
14as any maximum scholarship amount set by the school.
15Scholarships shall be prorated as follows:
16        (1) for eligible students whose household income is
17    less than 185% of the federal poverty level, the
18    scholarship shall be 100% of the amount determined
19    pursuant to this subsection (e) and subsection (e-5) of
20    this Section;
21        (2) for eligible students whose household income is
22    185% or more of the federal poverty level but less than
23    250% of the federal poverty level, the average of
24    scholarships shall be 75% of the amount determined
25    pursuant to this subsection (e) and subsection (e-5) of
26    this Section or in an amount set by the qualified school



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1    pursuant to subsection (e)(iii) of this Section; and
2        (3) for eligible students whose household income is
3    250% or more of the federal poverty level, the average of
4    scholarships shall be 50% of the amount determined
5    pursuant to this subsection (e) and subsection (e-5) of
6    this Section.
7    (e-5) The statewide average operational expense per
8student among public schools shall be multiplied by the
9following factors:
10        (1) for students determined eligible to receive
11    services under the federal Individuals with Disabilities
12    Education Act, 2;
13        (2) for students who are English learners, as defined
14    in subsection (d) of Section 14C-2 of the School Code,
15    1.2; and
16        (3) for students who are gifted and talented children,
17    as defined in Section 14A-20 of the School Code, 1.1.
18    (f) A scholarship granting organization shall distribute
19scholarship payments to the participating school where the
20student is enrolled.
21    (g) Each For the 2018-2019 school year through the
222021-2022 school year, each scholarship granting organization
23shall expend no less than 75% of the qualified contributions
24received during the calendar year in which the qualified
25contributions were received. No more than 25% of the qualified
26contributions may be carried forward to the following calendar



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2    (h) (Blank). For the 2022-2023 school year, each
3scholarship granting organization shall expend all qualified
4contributions received during the calendar year in which the
5qualified contributions were received. No qualified
6contributions may be carried forward to the following calendar
8    (i) A scholarship granting organization shall allow an
9eligible student to transfer a scholarship during a school
10year to any other participating school of the custodian's
11choice. Such scholarships shall be prorated.
12    (j) With the prior approval of the Department, a
13scholarship granting organization may transfer funds to
14another scholarship granting organization if additional funds
15are required to meet scholarship demands at the receiving
16scholarship granting organization. All transferred funds must
17be deposited by the receiving scholarship granting
18organization into its scholarship accounts. All transferred
19amounts received by any scholarship granting organization must
20be separately disclosed to the Department.
21    (k) If the approval of a scholarship granting organization
22is revoked as provided in Section 20 of this Act or the
23scholarship granting organization is dissolved, all remaining
24qualified contributions of the scholarship granting
25organization shall be transferred to another scholarship
26granting organization. All transferred funds must be deposited



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1by the receiving scholarship granting organization into its
2scholarship accounts.
3    (l) Scholarship granting organizations shall make
4reasonable efforts to advertise the availability of
5scholarships to eligible students.
6(Source: P.A. 100-465, eff. 8-31-17.)
7    (35 ILCS 40/65)
8    (Section scheduled to be repealed on January 1, 2025)
9    Sec. 65. Credit period; repeal.
10    (a) A taxpayer may take a credit under this Act for tax
11years beginning on or after January 1, 2018 and ending before
12January 1, 2024. A taxpayer may not take a credit pursuant to
13this Act for tax years beginning on or after January 1, 2024.
14    (b) This Act is exempt from the provisions of Section 250
15of the Illinois Income Tax Act repealed on January 1, 2025.
16(Source: P.A. 102-16, eff. 6-17-21.)
17    Section 99. Effective date. This Act takes effect upon
18becoming law.