State of Illinois
2023 and 2024


Introduced 2/17/2023, by Rep. Tim Ozinga


35 ILCS 5/224
35 ILCS 40/40
35 ILCS 40/65

    Amends the Illinois Income Tax Act and the Invest in Kids Act. Provides that the Invest in Kids credit applies permanently (currently, the credit applies for taxable years ending before January 1, 2023). Effective immediately.

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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 Illinois Income Tax Act is amended by
5changing 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,
92018 and ending before January 1, 2024, each taxpayer for whom
10a tax credit has been awarded by the Department under the
11Invest in Kids Act is entitled to a credit against the tax
12imposed under subsections (a) and (b) of Section 201 of this
13Act in an amount equal to the amount awarded under the Invest
14in Kids Act.
15    (b) For partners, shareholders of subchapter S
16corporations, and owners of limited liability companies, if
17the liability company is treated as a partnership for purposes
18of federal and State income taxation, the credit under this
19Section shall be determined in accordance with the
20determination of income and distributive share of income under
21Sections 702 and 704 and subchapter S of the Internal Revenue
23    (c) The credit may not be carried back and may not reduce



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1the taxpayer's liability to less than zero. If the amount of
2the credit exceeds the tax liability for the year, the excess
3may be carried forward and applied to the tax liability of the
45 taxable years following the excess credit year. The tax
5credit shall be applied to the earliest year for which there is
6a tax liability. If there are credits for more than one year
7that are available to offset the liability, the earlier credit
8shall be applied first.
9    (d) A tax credit awarded by the Department under the
10Invest in Kids Act may not be claimed for any qualified
11contribution for which the taxpayer claims a federal income
12tax deduction.
13    (e) This Section is exempt from the provisions of Section
15(Source: P.A. 102-699, eff. 4-19-22.)
16    Section 10. The Invest in Kids Act is amended by changing
17Sections 40 and 65 as follows:
18    (35 ILCS 40/40)
19    (Section scheduled to be repealed on January 1, 2025)
20    Sec. 40. Scholarship granting organization
22    (a) Before granting a scholarship for an academic year,
23all scholarship granting organizations shall assess and
24document each student's eligibility for the academic year.



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1    (b) A scholarship granting organization shall grant
2scholarships only to eligible students.
3    (c) A scholarship granting organization shall allow an
4eligible student to attend any qualified school of the
5student's choosing, subject to the availability of funds.
6    (d) In granting scholarships, beginning in the 2022-2023
7school year and for each school year thereafter, a scholarship
8granting organization shall give priority to eligible students
9who received a scholarship from a scholarship granting
10organization during the previous school year. Second priority
11shall be given to the following priority groups:
12        (1) (blank);
13        (2) eligible students who are members of a household
14    whose previous year's total annual income does not exceed
15    185% of the federal poverty level;
16        (3) eligible students who reside within a focus
17    district; and
18        (4) eligible students who are siblings of students
19    currently receiving a scholarship.
20    (d-5) A scholarship granting organization shall begin
21granting scholarships no later than February 1 preceding the
22school year for which the scholarship is sought. Each priority
23group identified in subsection (d) of this Section shall be
24eligible to receive scholarships on a first-come, first-served
25basis until April 1 immediately preceding the school year for
26which the scholarship is sought, starting with the first



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1priority group identified in subsection (d) of this Section.
2Applications for scholarships for eligible students meeting
3the qualifications of one or more priority groups that are
4received before April 1 must be either approved or denied
5within 10 business days after receipt. Beginning April 1, all
6eligible students shall be eligible to receive scholarships
7without regard to the priority groups identified in subsection
8(d) of this Section.
9    (e) Except as provided in subsection (e-5) of this
10Section, scholarships shall not exceed the lesser of (i) the
11statewide average operational expense per student among public
12schools or (ii) the necessary costs and fees for attendance at
13the qualified school. A qualified school may set a lower
14maximum scholarship amount for eligible students whose family
15income falls within paragraphs (2) and (3) of this subsection
16(e); that amount may not exceed the necessary costs and fees
17for attendance at the qualified school and is subject to the
18limitations on average scholarship amounts set forth in
19paragraphs (2) and (3) of this subsection, as applicable. The
20qualified school shall notify the scholarship granting
21organization of its necessary costs and fees as well as any
22maximum scholarship amount set by the school. Scholarships
23shall be prorated as follows:
24        (1) for eligible students whose household income is
25    less than 185% of the federal poverty level, the
26    scholarship shall be 100% of the amount determined



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1    pursuant to this subsection (e) and subsection (e-5) of
2    this Section;
3        (2) for eligible students whose household income is
4    185% or more of the federal poverty level but less than
5    250% of the federal poverty level, the average of
6    scholarships shall be 75% of the amount determined
7    pursuant to this subsection (e) and subsection (e-5) of
8    this Section; and
9        (3) for eligible students whose household income is
10    250% or more of the federal poverty level, the average of
11    scholarships shall be 50% of the amount determined
12    pursuant to this subsection (e) and subsection (e-5) of
13    this Section.
14    (e-5) The statewide average operational expense per
15student among public schools shall be multiplied by the
16following factors:
17        (1) for students determined eligible to receive
18    services under the federal Individuals with Disabilities
19    Education Act, 2;
20        (2) for students who are English learners, as defined
21    in subsection (d) of Section 14C-2 of the School Code,
22    1.2; and
23        (3) for students who are gifted and talented children,
24    as defined in Section 14A-20 of the School Code, 1.1.
25    (f) A scholarship granting organization shall distribute
26scholarship payments to the participating school where the



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1student is enrolled.
2    (g) Each For the 2018-2019 school year through the
32022-2023 school year, each scholarship granting organization
4shall expend no less than 75% of the qualified contributions
5received during the calendar year in which the qualified
6contributions were received. No more than 25% of the qualified
7contributions may be carried forward to the following calendar
9    (h) (Blank). For the 2023-2024 school year, each
10scholarship granting organization shall expend all qualified
11contributions received during the calendar year in which the
12qualified contributions were received. No qualified
13contributions may be carried forward to the following calendar
15    (i) A scholarship granting organization shall allow an
16eligible student to transfer a scholarship during a school
17year to any other participating school of the custodian's
18choice. Such scholarships shall be prorated.
19    (j) With the prior approval of the Department, a
20scholarship granting organization may transfer funds to
21another scholarship granting organization if additional funds
22are required to meet scholarship demands at the receiving
23scholarship granting organization. All transferred funds must
24be deposited by the receiving scholarship granting
25organization into its scholarship accounts. All transferred
26amounts received by any scholarship granting organization must



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1be separately disclosed to the Department.
2    (k) If the approval of a scholarship granting organization
3is revoked as provided in Section 20 of this Act or the
4scholarship granting organization is dissolved, all remaining
5qualified contributions of the scholarship granting
6organization shall be transferred to another scholarship
7granting organization. All transferred funds must be deposited
8by the receiving scholarship granting organization into its
9scholarship accounts.
10    (l) Scholarship granting organizations shall make
11reasonable efforts to advertise the availability of
12scholarships to eligible students.
13(Source: P.A. 102-699, eff. 4-19-22; 102-1059, eff. 6-10-22;
14revised 8-3-22.)
15    (35 ILCS 40/65)
16    (Section scheduled to be repealed on January 1, 2025)
17    Sec. 65. Credit period; repeal.
18    (a) A taxpayer may take a credit under this Act for tax
19years beginning on or after January 1, 2018 and ending before
20January 1, 2024. A taxpayer may not take a credit pursuant to
21this Act for tax years beginning on or after January 1, 2024.
22    (b) This Act is exempt from the provisions of Section 250
23of the Illinois Income Tax Act repealed on January 1, 2025.
24(Source: P.A. 102-16, eff. 6-17-21.)
25    Section 99. Effective date. This Act takes effect upon



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1becoming law.