Illinois General Assembly - Full Text of SB3243
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Full Text of SB3243  103rd General Assembly



State of Illinois
2023 and 2024


Introduced 2/6/2024, by Sen. Tom Bennett


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, 2024). Effective immediately.

LRB103 36639 HLH 66748 b





SB3243LRB103 36639 HLH 66748 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 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 taxable years ending before December 31, 2023, for
16partners, shareholders of subchapter S corporations, and
17owners of limited liability companies, if the liability
18company is treated as a partnership for purposes of federal
19and State income taxation, the credit under this Section shall
20be determined in accordance with the determination of income
21and distributive share of income under Sections 702 and 704
22and subchapter S of the Internal Revenue Code. For taxable
23years ending on or after December 31, 2023, partners and



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1shareholders of subchapter S corporations are entitled to a
2credit under this Section as provided in Section 251.
3    (c) The credit may not be carried back and may not reduce
4the taxpayer's liability to less than zero. If the amount of
5the credit exceeds the tax liability for the year, the excess
6may be carried forward and applied to the tax liability of the
75 taxable years following the excess credit year. The tax
8credit shall be applied to the earliest year for which there is
9a tax liability. If there are credits for more than one year
10that are available to offset the liability, the earlier credit
11shall be applied first.
12    (d) A tax credit awarded by the Department under the
13Invest in Kids Act may not be claimed for any qualified
14contribution for which the taxpayer claims a federal income
15tax deduction.
16    (e) This Section is exempt from the provisions of Section
18(Source: P.A. 102-699, eff. 4-19-22; 103-396, eff. 1-1-24.)
19    Section 10. The Invest in Kids Act is amended by changing
20Sections 40 and 65 as follows:
21    (35 ILCS 40/40)
22    (Section scheduled to be repealed on January 1, 2025)
23    Sec. 40. Scholarship granting organization



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



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



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1        (1) for eligible students whose household income is
2    less than 185% of the federal poverty level, the
3    scholarship shall be 100% of the amount determined
4    pursuant to this subsection (e) and subsection (e-5) of
5    this Section;
6        (2) for eligible students whose household income is
7    185% or more of the federal poverty level but less than
8    250% of the federal poverty level, the average of
9    scholarships shall be 75% of the amount determined
10    pursuant to this subsection (e) and subsection (e-5) of
11    this Section; and
12        (3) for eligible students whose household income is
13    250% or more of the federal poverty level, the average of
14    scholarships shall be 50% of the amount determined
15    pursuant to this subsection (e) and subsection (e-5) of
16    this Section.
17    (e-5) The statewide average operational expense per
18student among public schools shall be multiplied by the
19following factors:
20        (1) for students determined eligible to receive
21    services under the federal Individuals with Disabilities
22    Education Act, 2;
23        (2) for students who are English learners, as defined
24    in subsection (d) of Section 14C-2 of the School Code,
25    1.2; and
26        (3) for students who are gifted and talented children,



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1    as defined in Section 14A-20 of the School Code, 1.1.
2    (f) A scholarship granting organization shall distribute
3scholarship payments to the participating school where the
4student is enrolled.
5    (g) Each For the 2018-2019 school year through the
62022-2023 school year, each scholarship granting organization
7shall expend no less than 75% of the qualified contributions
8received during the calendar year in which the qualified
9contributions were received. No more than 25% of the qualified
10contributions may be carried forward to the following calendar
12    (h) (Blank). For the 2023-2024 school year, each
13scholarship granting organization shall expend all qualified
14contributions received during the calendar year in which the
15qualified contributions were received. No qualified
16contributions may be carried forward to the following calendar
18    (i) A scholarship granting organization shall allow an
19eligible student to transfer a scholarship during a school
20year to any other participating school of the custodian's
21choice. Such scholarships shall be prorated.
22    (j) With the prior approval of the Department, a
23scholarship granting organization may transfer funds to
24another scholarship granting organization if additional funds
25are required to meet scholarship demands at the receiving
26scholarship granting organization. All transferred funds must



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1be deposited by the receiving scholarship granting
2organization into its scholarship accounts. All transferred
3amounts received by any scholarship granting organization must
4be separately disclosed to the Department.
5    (k) If the approval of a scholarship granting organization
6is revoked as provided in Section 20 of this Act or the
7scholarship granting organization is dissolved, all remaining
8qualified contributions of the scholarship granting
9organization shall be transferred to another scholarship
10granting organization. All transferred funds must be deposited
11by the receiving scholarship granting organization into its
12scholarship accounts.
13    (l) Scholarship granting organizations shall make
14reasonable efforts to advertise the availability of
15scholarships to eligible students.
16(Source: P.A. 102-699, eff. 4-19-22; 102-1059, eff. 6-10-22;
17103-154, eff. 6-30-23.)
18    (35 ILCS 40/65)
19    (Section scheduled to be repealed on January 1, 2025)
20    Sec. 65. Credit period; repeal.
21    (a) A taxpayer may take a credit under this Act for tax
22years beginning on or after January 1, 2018 and ending before
23January 1, 2024. A taxpayer may not take a credit pursuant to
24this Act for tax years beginning on or after January 1, 2024.
25It is the intent of the General Assembly that the credit under



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1this Act applies continuously on and after January 1, 2018,
2including, but not limited to, during the period from January
31, 2024 through the effective date of this amendatory Act of
4the 103rd General Assembly.
5    (b) This Act is exempt from the provisions of Section 250
6of the Illinois Income Tax Act repealed on January 1, 2025.
7(Source: P.A. 102-16, eff. 6-17-21.)
8    Section 99. Effective date. This Act takes effect upon
9becoming law.