Section 1000.100  Definitions

 

"Act" means the Invest in Kids Act [35 ILCS 40].

 

"Authorized contribution" means the contribution amount that is listed on the contribution authorization certificate issued to the taxpayer.

 

"Board" means the State Board of Education.

 

"Certificate of receipt" or "COR" means a certificate issued by the scholarship granting organization to a taxpayer pursuant to Section 1000.500.

 

"Contribution" means a donation made by the taxpayer during the taxable year for providing scholarships as provided in the Act.

 

"Contribution authorization certificate" or "CAC" means a certificate issued by the Department to a taxpayer pursuant to Section 1000.400.

 

"Custodian" means, with respect to eligible students, an Illinois resident who is a parent or legal guardian of the eligible student or students.  In cases in which the parent or legal guardian is unwilling or unable to act for the eligible student for purposes of the Invest in Kids Act, the person with whom the eligible student is living, such as a foster parent, will be considered the custodian.

 

"Department" means the Department of Revenue.

 

"Eligible student" means a child who:

 

is a member of a household whose federal adjusted gross income the year before he or she initially receives a scholarship under this program, as determined by the Department, does not exceed 300% of the federal poverty level and, once the child receives a scholarship, does not exceed 400% of the federal poverty level;

 

is eligible to attend a public elementary school or high school in Illinois in the semester immediately preceding the semester for which he or she first receives a scholarship or is starting school in Illinois for the first time when he or she first receives a scholarship; and

 

resides in Illinois while receiving a scholarship. 

 

"Eligible student" also means foster children who are under the legal responsibility of a foster care agency or court.

 

"Family member" means a parent, child, or sibling, whether by whole blood, half blood, or adoption; spouse; or stepchild.

 

"Federal poverty level" means the poverty guidelines established each year by the U.S. Department of Health and Human Services under the authority of 42 U.S.C. 9902(2) and published in the Federal Register.

 

"Focus district" means a school district, as determined by the Illinois State Board of Education, which has a school that is either:

 

a school that has one or more subgroups in which the average student performance is at or below the State average for the lowest 10% of student performance in that subgroup; or

 

a school with an average graduation rate of less than 60% and not identified for priority. 

 

For purposes of this definition, "subgroups" means "subgroup of students" as defined in the Every Student Succeeds Act (P.L. 114-95). 

 

"Household" means an individual or group of individuals living together in a room or group of rooms as a housing unit.

 

"Household income" means the combined federal adjusted gross income of the members of a household.  Household income does not include the federal adjusted gross income of a child residing in a household who is under 18 years of age and attending an elementary or secondary school on a full time basis.  Foster children under the legal responsibility of a foster care agency or court are deemed to have a household income that does not exceed 185% of the poverty level.

 

"Jointly administered CTE program" means a program or set of programs within a non-public school located in Illinois, as determined by the State Board of Education pursuant to Section 7.5 of the Act.

 

"Necessary costs and fees" includes the customary charge for instruction and use of facilities in general and the additional fixed fees charged for specified purposes that are required generally of non-scholarship recipients for each academic period for which the scholarship applicant actually enrolls, including costs associated with student assessments, but does not include fees payable only once and other contingent deposits that are refundable in whole or in part.  Necessary costs and fees are determined by the Board pursuant to 23 Ill. Adm. Code 425.100.

 

"Participating qualified school" or "participating school" means a qualified school that has not been determined to be ineligible by the Board under Section 1000.700(c).

 

"Person" means an individual, corporation, company, association, partnership, unit of local government, state agency, federal agency, or other legal entity.

 

"Qualified contribution" means the authorized contribution made by a taxpayer to a scholarship granting organization for which the taxpayer has received a certificate of receipt from such organization.

 

"Qualified school" means a non-public school located in Illinois and recognized by the Board pursuant to Section 2-3.25o of the School Code [105 ILCS 5] or that is registered and becomes recognized by the Board pursuant to Section 2-3.25o of the School Code prior to receiving scholarship funds pursuant to the Act.  “Qualified school” includes technical academies as defined herein.

 

"Scholarship" means an educational scholarship awarded by an SGO to an eligible student to attend a qualified school of their custodians' choice in an amount not exceeding the lesser of the necessary costs and fees to attend that school or the statewide average operational expense per student among public schools, except as provided in Section 1000.600(f)(2).

 

"Scholarship granting organization" or "SGO" means an entity that:

 

is exempt from taxation under section 501(c)(3) of the Internal Revenue Code;

 

uses at least 95% of the qualified contributions received during a taxable year for scholarships;

 

provides scholarships to students according to the guidelines of the Invest in Kids Act;

 

deposits and holds qualified contributions and any income derived from qualified contributions in an account that is separate from the organization's operating fund or other funds until such qualified contributions or income are withdrawn for use; and

 

is approved to issue certificates of receipt.

 

"Taxpayer" means any individual, corporation, partnership, trust, or other entity subject to the Illinois income tax.  For purposes of the Act, 2 individuals filing a joint return shall be considered one taxpayer.  [35 ILCS 40/5]

 

"Technical academy" means a non-public school located in Illinois that: (1) registers with the Board pursuant to Section 2-3.25 of the School Code; and (2) operates or will operate a jointly administered CTE program as the primary focus of the school.  To maintain its status as a technical academy, the non-public school must obtain recognition from the Board pursuant to Section 2-3.25o of the School Code within 2 calendar years of its registration with the Board.

 

(Source:  Amended at 46 Ill. Reg. 10924, effective June 7, 2022)

 

Section 1000.200  Invest in Kids Act: Program Overview and Award of Credits

 

a)         Program Overview.  The Act authorizes taxpayers, subject to specific limitations and requirements, to receive an income tax credit for qualified contributions made to scholarship granting organizations.  Taxpayers wishing to make qualified contributions must first apply to the Department for approval to make qualified contributions.  Once approved, taxpayers are issued contribution authorization certificates by the Department, which must be provided to scholarship granting organizations by taxpayers when making their qualified contributions.  A scholarship granting organization must apply to the Department for approval before it can issue certificates of receipt to taxpayers making qualified contributions.  Certificates of receipt issued to the taxpayer by an SGO may be used to document the tax credit claimed by the taxpayer under subsection (b). 

 

b)         Award of Credits by the Department – Requirements and Limitations.  The Department shall award credits against the tax imposed under Section 201(a) and (b) of the Illinois Income Tax Act to taxpayers who make qualified contributions.  The credit shall be equal to 75% of the total amount of qualified contributions made by the taxpayer during a taxable year, not to exceed a credit of $1,000,000 per taxpayer (i.e., total qualified contributions made by a taxpayer for which a credit may be obtained may not exceed $1,333,333 during a taxable year). 

 

1)         The aggregate amount of all credits the Department may award in any calendar year may not exceed $75,000,000 (i.e., the total qualified contributions made by all taxpayers for which credits may be obtained may not exceed $100,000,000 in the aggregate during a taxable year).

 

2)         Contributions made by corporations (including subchapter S corporations), partnerships, and trusts may not be directed to a particular subset of schools, a particular school, a particular group of students, or a particular student. Contributions made by corporations (including subchapter S corporations), partnerships, and trusts must specify a region under subsection (b)(10) to which the contribution will be directed.  Contributions made to a scholarship granting organization without conditions will satisfy the requirements of this subsection (b)(2). An SGO may refuse contributions from corporations (including subchapter S corporations), partnerships, and trusts that, if accepted, may damage the SGO's reputation, cause the rescission of past contributions, or affect the SGO's ability to obtain future contributions.

 

3)         Contributions made by individuals may be directed to a particular subset of schools or a particular school but may not be directed to a particular group of students or a particular student.  Contributions made by individuals must specify a region under subsection (b)(10) to which the contribution will be directed. An SGO may refuse contributions from individuals that, if accepted, may damage the SGO's reputation, cause the rescission of past contributions, or affect the SGO's ability to obtain future contributions.

 

4)         To comply or remain in compliance with the requirements of this Part, SGOs are permitted to return all or any part of a contribution to an individual contributor that has made a contribution directed to a particular subset of schools or a particular school.  To avoid the possibility of the return of the taxpayer's contribution, a taxpayer may, at the time of making the contribution or upon notification a contribution will be returned to the taxpayer by the SGO, grant the SGO additional options for use of the contribution.  The taxpayer may allow the SGO, for example, to:

 

A)        use the contribution to award scholarships to eligible students to attend an alternative school or schools selected by the taxpayer in the same region;

 

B)        use the contribution to award scholarships to eligible students to attend any qualified school in the same region;

 

C)        transfer the funds to another SGO in the region, with the permission of the Department;

 

D)        on and after June 1, in addition to the options in subsections (b)(4)(A) through (C):

 

i)          use the contribution to award scholarships to eligible students to attend an alternative school or schools selected by the taxpayer in another region;

 

ii)         use the contribution to award scholarships to eligible students to attend any qualified school in another region; or

 

iii)        transfer the funds to an SGO in another region, with the permission of the Department.

 

5)         If an individual taxpayer has made a contribution directed to a particular subset of schools or a particular school and the individual taxpayer determines that the SGO has not received any applications for scholarships for the particular subset of schools or a particular school, or the SGO notifies the individual taxpayer that the SGO has not received any applications for scholarships for the particular subset of schools or a particular school, the taxpayer may:

 

A)        request the return of the contribution, provided that the SGO has not issued the taxpayer a COR;

 

B)        permit the SGO to use the contribution to award scholarships to eligible students to attend an alternative school or schools in the same region selected by the taxpayer;

 

C)        permit the SGO to use the contribution to award scholarships to eligible students to attend any qualified school in the same region;

 

D)        authorize the SGO to transfer the funds to another SGO in the region, with the permission of the Department;

 

E)        on and after June 1, in addition to the options in subsections (b)(5)(A) through (D):

 

i)          use the contribution to award scholarships to eligible students to attend an alternative school or schools selected by the taxpayer in another region;

 

ii)         use the contribution to award scholarships to eligible students to attend any qualified school in another region; or

 

iii)        authorize the SGO to transfer the funds to an SGO in another region, with the permission of the Department.

 

6)         If a taxpayer rescinds all or part of an authorized contribution for any reason, the SGO shall notify the Department of the name of the taxpayer who rescinded the contribution and the amount of the contribution that was rescinded.  (See Section 1000.400(j).)

 

7)         Two individuals filing a joint return or members of a unitary business group filing a combined return shall be considered one taxpayer for purposes of making qualified contributions.  For instance, if two married individuals at the time of applying for a CAC intend to file a joint return, the maximum CAC the two individuals collectively can apply for is $1,333,333, and the maximum credit allowed on the joint return is $1,000,000.  If two married individuals each contribute $1,333,333 intending at the time of the contribution to file separate returns but subsequently file a joint return, the maximum credit allowed on the joint return is $1,000,000.

 

8)         No credit shall be taken for any qualified contribution for which the taxpayer claims any portion as a federal income tax deduction.  

 

EXAMPLE:  A taxpayer makes a qualified contribution of $100,000.  The taxpayer takes an Invest in Kids credit on his State tax return in the amount of $75,000.  The taxpayer takes a federal income tax deduction for $25,000.  The Invest in Kids tax credit of $75,000 will be disallowed.

 

9)         A taxpayer that has received a CAC may not direct a donor advised fund to make a contribution to an SGO on behalf of the taxpayer.  A donor advised fund is a charitable organization exempt from income tax under Internal Revenue Code section 501(c)(3); a taxpayer receives a charitable deduction at the time a contribution is made by the taxpayer to the fund. 

 

10)         Credits shall be awarded in a manner that is geographically proportionate to enrollment in recognized non-public schools in Illinois.  [35 ILCS 40/10]  For purposes of awarding credits in a manner that is geographically proportionate to enrollment in recognized non-public schools, the State of Illinois shall be divided into 5 regions.  See Section 1000.APPENDIX A for a listing of counties in each region.

 

A)        On or before December 1 of each year, the State Board of Education shall provide the Department with a list of non-public schools that are recognized under Section 2-3.25o of the School Code.  Beginning December 1, 2021, the list shall contain registered and recognized technical academies.  This list shall contain enrollment numbers for each recognized non-public school, and shall be used by the Department to determine enrollment in recognized non-public schools in each region for purposes of calculating the geographic distribution of credits. The Department will not adjust the geographic distribution of credits during a calendar year to reflect the addition of non-public schools that are recognized under Section 2-3.25o of the School Code by the State Board of Education after December 1.

 

B)        For purposes of awarding credits in a manner that is geographically proportionate to enrollment in recognized non-public schools, the Department shall track the amount of qualified contributions designated in each region by taxpayers.  (See Section 1000.400(c)(3).)

 

C)        If the $75,000,000 cap in aggregate credits that can be awarded by the Department (i.e., $100,000,000 in qualified contributions made by taxpayers) is not reached by June 1 of a given year, the Department shall award contribution authorization certificates for the remaining credits on a first-come, first-served basis, without regard to the requirement that the credits be awarded in a manner that is geographically proportionate to enrollment in recognized non-public schools.

 

11)        Credits awarded for donations made to a technical academy shall be awarded without regard to subsection (b)(10), but shall not exceed 15% of the annual statewide program cap.  For the purposes of this subsection (b)(11), "technical academy" means a technical academy that is registered with the Board as of July 19, 2021.

 

(Source:  Amended at 46 Ill. Reg. 10924, effective June 7, 2022)

 

Section 1000.250  Electronic Notice and Filing Requirements; Books and Records

 

a)         Unless otherwise provided, all applications, notices, filings, certificates, or other documents required by this Part to be submitted to or issued by the Department shall be made by electronic means.

 

b)         Scholarship granting organizations and taxpayers shall maintain books and records under this Part and make them available upon request by the Department.

 

c)         Scholarship granting organizations shall maintain their books and records for no less than three years.  Taxpayers shall maintain their books and records in accordance with the Illinois Income Tax Act and regulations promulgated thereunder.

 

Section 1000.300  Scholarship Granting Organization: Approval to Issue Certificates of Receipt 

 

a)         No scholarship granting organization shall issue any certificates of receipt without first being approved by the Department to issue certificates of receipt.

 

b)         A scholarship granting organization shall submit an application for approval to issue certificates of receipt in the form and manner prescribed by the Department.  Applications for approval to issue CORs must be received by the Department no later than January 15 preceding the school year for which the scholarships will be granted.  Each application shall be submitted electronically, shall be signed and verified by a board member, officer, executive director, or employee with managerial authority of the scholarship granting organization, or a board member, officer, executive director, or employee with managerial authority of any entity retained by the scholarship granting organization to operate the scholarship granting organization, and shall include:

 

1)         a copy of the letter issued by the Internal Revenue Service to the scholarship granting organization demonstrating that the scholarship granting organization has been granted an exemption from taxation under section 501(c)(3) of the Internal Revenue Code;

 

2)         certification that all qualified contributions and any income derived from qualified contributions are or will be deposited and held in an account that is separate from the scholarship granting organization's operating or other funds until such qualified contributions or income are withdrawn for use;

 

3)         certification that the scholarship granting organization will use at least 95% of its annual revenue from qualified contributions for scholarships;

 

4)         certification that the scholarship granting organization will provide scholarships to eligible students;

 

5)         the region or regions in which it will grant scholarships;

 

6)         a list of the names and home addresses of all members of the governing board of the SGO;

 

7)         a list of the names, home addresses, and social security numbers of the officers, executive director, and employees with managerial authority of the scholarship granting organization, and the officers, executive director, and employees with managerial authority of any entity retained by the scholarship granting organization to operate the scholarship granting organization;

 

8)         certification that, in the last 7 years, no officers, executive director, board members involved in day-to-day operations of the scholarship granting organization, or employees with managerial authority of the scholarship granting organization, or officers, executive director, employees with managerial authority, and board members involved in day-to-day operations of any entity retained by the scholarship granting organization to operate the scholarship granting organization have filed for personal bankruptcy or corporate bankruptcy in a corporation of which they owned more than 20%.  An SGO that cannot make the certification required by this subsection (b)(8) shall not be eligible to provide scholarships;

 

9)         certification that the officers, executive director, board members involved in day-to-day operations of the scholarship granting organization, and employees with managerial authority of the scholarship granting organization, or the officers, executive director, employees with managerial authority, and board members involved in day-to-day operations of any entity retained by the scholarship granting organization to operate the scholarship granting organization are not board members or paid staff members of a participating school, do not own or operate a qualified school, and do not have a family member who is a board member or a paid staff member of a participating qualified school;

 

10)          certification that the scholarship granting organization is and will remain in compliance with the anti-discrimination provisions of 42 USC 2000d;

 

11)          the primary email address to which notices and other documents provided for under the Act shall be sent;  

 

12)          a copy of the most recent financial audit of the scholarship granting organization's accounts and records conducted by an independent certified public accountant in accordance with government auditing standards and auditing standards generally accepted in the United States.  For the initial application to be approved to issue CORs, an SGO registered under Section 2 of the Solicitation for Charity Act who is subject to the provisions of Section 4(b) of that Act and who files with the Attorney General a summary financial statement or written report in accordance with that subsection may satisfy the requirements of this subsection (b)(12) by submitting to the Department a copy of the most recent summary financial statement or written report.  No application will be approved unless the requirements of this subsection (b)(12) have been met; and

 

13)        the beginning and ending dates of the SGO's fiscal and taxable years.

 

c)         The Department shall review and either approve or deny each application to issue certificates of receipt pursuant to the Act.  Each SGO that has been approved will be assigned a unique identifier.  Applicants shall be notified of the Department's determination within 30 business days after the application is received. [35 ILCS 40/15] If the application is denied, the Department will notify the SGO of the reason for the denial of the application.

 

d)         An SGO whose application to issue CORs is denied by the Department may reapply subject to the deadlines in this Section. 

 

Section 1000.400  Taxpayer Contribution Authorization Certificates

 

a)         A taxpayer shall not be allowed a credit pursuant to the Act for any contribution to a scholarship granting organization that was made prior to the Department's issuance of a contribution authorization certificate for the contribution to the taxpayer.

 

b)         Prior to making a contribution to a scholarship granting organization, the taxpayer shall apply to the Department for a contribution authorization certificate.

 

c)         A taxpayer who makes more than one contribution to one or more scholarship granting organizations must make a separate application for each contribution authorization certificate. The application shall include:

 

1)         the taxpayer's name, address and email address;

 

2)         the amount the taxpayer will contribute;

 

3)         the region for which the contribution will be made;

 

4)         the SGO to which the contribution will be made;

 

5)         an acknowledgement that no credit may be taken for any qualified contribution for which the taxpayer claims any portion as a federal income tax deduction; and

 

6)         an option permitting the Department to send the taxpayer's name and email address to the SGO.

 

d)         Multiple applications for contribution authorization certificates cannot be made on the same form.

 

e)         Applications shall be reviewed by the Department and shall either be approved or denied.

 

f)         If approved, the Department shall issue contribution authorization certificates on a first-come, first-served basis based upon the date and time that the Department received the taxpayer's application for the certificate, subject to the requirement that credits must be awarded in a manner that is geographically proportionate to enrollment in recognized non-public schools in Illinois as determined under  Section 10(e) of the Act (see Section 1000.200(b)(10)).

 

g)         A taxpayer's aggregate authorized contribution amount as listed on one or more contribution authorization certificates issued to the taxpayer shall not exceed the aggregate of the amounts listed on the taxpayer's application or applications submitted in accordance with this Section.

 

h)         A separate CAC shall be issued for each application submitted in accordance with this Section.  Each contribution authorization certificate shall include:

 

1)         the name and address of the taxpayer as it appears on the application;

 

2)         the date the certificate was issued;

 

3)         the date by which the authorized contribution listed in the certificate must be made, which shall be 60 days from the date of the issuance of a contribution authorization certificate;

 

A)        Contributions may be made no later than the end of the taxable year in which the CAC was issued.

 

B)        For purposes of determining whether a contribution was made 60 days from the date of the issuance of a CAC, the Department will rely on:

 

i)          the date of receipt by the SGO if the contribution is physically delivered to the SGO by the taxpayer;

 

ii)         the postmark date, if deposited in the U.S. Mail; or

 

iii)        the date the contribution was received by, or deposited with, a common carrier for delivery to the SGO;

 

4)         the amount of the authorized contribution;

 

5)         the region for which the contribution authorization certificate is issued;

 

6)         the name and unique identifier of the SGO the taxpayer has designated as the recipient of the qualified contribution;

 

7)         a statement that no credit may be taken for any qualified contribution for which the taxpayer claims any portion as a federal income tax deduction; and

 

8)         a unique identifier for each CAC issued to the taxpayer.

 

i)          Each contribution authorization certificate shall be sent to the taxpayer within 3 business days after its issuance.

 

j)          A taxpayer may rescind all or part of an authorized contribution approved under the Act by providing notice to the Department.  Once a taxpayer has made a contribution to an SGO and has received a COR from the SGO, the taxpayer cannot rescind a CAC.  Amounts rescinded shall no longer be deducted from the caps prescribed in Section 10 of the Act.  (See Section 1000.200.)

 

k)         The Department shall maintain on its website a running total of the amount of credits, in the aggregate and by region, for which taxpayers may make applications for contribution authorization certifications. The running total shall be updated every business day.  [35 ILCS 40/25]

 

Section 1000.500  Scholarship Granting Organizations: Issuance of Certificates of Receipt

 

a)         No scholarship granting organization shall issue a certificate of receipt for any qualified contribution made by a taxpayer under the Act unless that scholarship granting organization has been approved to issue certificates of receipt pursuant to Section 15 of the Act.  (See Section 1000.300.)

 

b)         No scholarship granting organization shall issue a certificate of receipt for a contribution made by a taxpayer unless the taxpayer has been issued a contribution authorization certificate by the Department and the SGO has received a copy of the contribution authorization certificate.  The contribution must be made by the person whose name appears on the contribution authorization certificate.  If a check or credit card is used to make a contribution to the SGO, the name that appears on the check or credit card must be the name of the person whose name appears on the contribution authorization certificate.  If a contribution is made using stock or negotiable securities, the stock or negotiable securities must be in the name of, or held in the name of, the person whose name appears on the contribution authorization certificate.

 

EXAMPLE 1:  Individual A is the beneficiary of a trust. The trust obtains a CAC from the Department.  The individual instructs the trust to make a contribution to an SGO in the amount of $1,000. The SGO must issue the COR in the name of the trust.

 

EXAMPLE 2:  Individual A is the beneficiary of a trust. Individual A obtains a CAC from the Department.  The trust makes a contribution to an SGO in the amount of $1,000. The SGO shall not issue a COR to the trust because the CAC is in the name of Individual A.  The SGO shall not issue the COR to the individual because the contribution was made by the trust. The individual must make the contribution to receive the COR.

 

c)         Written Certificate of Receipt

 

1)         If a taxpayer makes a contribution to a scholarship granting organization on or before the date by which the authorized contribution is required to be made (see Section 1000.400(h)(3)), the scholarship granting organization shall, within 30 days after receipt of the authorized contribution, issue to the taxpayer a written certificate of receipt.  For purposes of determining the 30-day period for issuing a COR, the SGO shall use one the following dates as the receipt date:

 

A)        the date of receipt by the SGO if the contribution is physically delivered to the SGO by the taxpayer;

 

B)        the postmark date, if deposited in the U.S. Mail; or

 

C)        the date the contribution was received by, or deposited with, a common carrier for delivery to the SGO.

 

2)         Upon the issuance of a certificate of receipt, the issuing scholarship granting organization shall, within 10 days after issuing the certificate of receipt, provide the Department with notification of the issuance of the certificate.   SGOs shall issue CORs to taxpayers by means of electronically completing a COR on the Department's website, but only after payment is confirmed (e.g., the payment has cleared).  Online completion of the COR on the Department's website satisfies both the requirement to issue the COR to the taxpayer and to provide the Department with notification of the issuance of the COR.

 

d)         Each certificate of receipt shall state:

 

1)         the name and address of the issuing scholarship granting organization;

 

2)         the taxpayer's name and address;

 

3)         the date of each qualified contribution;

 

4)         the amount of each qualified contribution;

 

5)         the total qualified contribution amount;

 

6)         the unique identifier for the CAC provided to the SGO for the qualified contribution; and

 

7)         the region for which the COR is issued.

 

e)         The notification to the Department shall include:

 

1)         the taxpayer's name and address;

 

2)         the date of the issuance of a certificate of receipt;

 

3)         the date or dates on which the qualified contribution was made and the amounts contributed on those dates (see subsection (c));

 

4)         the total qualified contribution listed on the certificates;

 

5)         the issuing scholarship granting organization's name and address;

 

6)         the unique identifier for the CAC provided to the SGO for the qualified contribution; and

 

7)         the region for which the COR was issued.

 

f)         If a taxpayer fails to make all or a portion of an authorized contribution on or before the date by which the authorized contribution is required to be made (see Section 1000.400(h)(2)), the taxpayer shall not be entitled to a certificate of receipt for that portion of the authorized contribution not made.  In other words, each COR issued by an SGO may only be issued in the amount of the authorized contribution actually made by the taxpayer on or before the 60-day deadline.  (See Section 1000.400(h)(2).)

 

EXAMPLE:  A CAC in the amount of $1000 is issued by the Department to the taxpayer on January 20.  The taxpayer has 60 days from the date of the CAC to make the authorized contribution.  On January 21, the taxpayer sends the CAC and a check in the amount of $500 to an SGO.  The SGO receives the check on January 23.  The SGO must provide a COR to the taxpayer in the amount of $500 no later than February 22.  On February 25, the taxpayer sends a check in the amount of $250 to the same SGO.  The SGO receives the check on February 27.  The SGO must provide a COR to the taxpayer in the amount of $250 no later than March 29.  On March 23, the taxpayer sends a check in the amount of $250 to the SGO.   The SGO cannot issue the taxpayer a COR for the $250 payment because the payment was made more than 60 days after the issuance of the CAC.  

 

g)         Any portion of a contribution that a taxpayer fails to make by the date indicated on the contribution authorization certificate shall no longer be deducted from the caps prescribed in Section 10 of the Act.  [35 ILCS 40/30] (See Section 1000.200.)  The Department will restore the amounts previously deducted after the last date has passed by which the SGO must notify the Department of the issuance of the COR for any given CAC. 

 

h)         Taxpayers can make, and SGOs can receive, contributions in the form of cash, stocks, and negotiable securities.  If an SGO receives a contribution in stock or negotiable securities, the SGO must convert the stock and negotiable securities to cash and receive the cash proceeds prior to issuing the COR to the taxpayer.  The amount of the COR issued to the taxpayer shall not exceed the net amount received in cash from the sale and available to the SGO for awarding scholarships to eligible students.  The SGO must receive the proceeds from a sale from the broker before the SGO may issue a COR to the taxpayer. If an SGO maintains a brokerage account dedicated to receiving, selling and receiving the proceeds from the sale of stock and negotiable securities received from taxpayers as contributions, the funds are received when the proceeds from the sale of the stock or negotiable securities are placed in the dedicated brokerage account.  Prior to making a contribution to an SGO with stock or negotiable securities, the taxpayer must acknowledge that, if the amount received by the SGO from the sale of the stock or negotiable securities exceeds the amount of the CAC issued to the taxpayer by the Department, the SGO will issue a COR to the taxpayer in the amount of the CAC, the SGO will use the excess funds for a charitable purpose, and the taxpayer will not receive a tax credit under the Act for the excess funds.  The SGO must notify the taxpayer of the amount that exceeds the CAC. 

 

EXAMPLE 1:  A taxpayer has a CAC to contribute $100,000 to an SGO.  The taxpayer owns 100 shares of XYZ stock valued at $95 per share on the day the shares are contributed to the SGO.  The SGO has 30 days to issue a COR to the taxpayer.  (See subsection (c).)  On Day 28, the SGO's broker sells the stock.  After deducting his commission, he remits $90,000 to the SGO on Day 29.  The SGO issues the COR to the taxpayer in the amount of $90,000 on Day 30.

 

EXAMPLE 2:  A taxpayer has a CAC to contribute $100,000 to an SGO.  The taxpayer owns 100 shares of XYZ stock valued at $95 per share on the day the shares are contributed to the SGO.  The SGO has 30 days to issue a COR to the taxpayer.  (See subsection (c).)  On Day 17, the SGO's broker sells the stock.  After deducting his commission, he remits $105,000 to the SGO on Day 19.  The amount of the COR to be issued by the SGO to the taxpayer cannot exceed $100,000.  The SGO must notify the taxpayer that it received $5000 more than the CAC from the sale of the stock, that it will use the excess funds for a charitable purpose, and that the taxpayer will not receive a tax credit under the Act for the excess funds.

 

EXAMPLE 3:  A taxpayer has a CAC to contribute $100,000 to an SGO.  The taxpayer owns 100 shares of XYZ stock valued at $95 per share on the day the shares are contributed to the SGO.  The SGO has 30 days to issue a COR to the taxpayer. (See subsection (c).)  On Day 30, the SGO's broker sells the stock.  After deducting his commission, he remits $90,000 to the SGO on Day 31.  The CAC has lapsed and the SGO cannot issue a COR to the taxpayer for any amount realized from the sale of the stock.

 

i)          If a taxpayer makes a contribution to an SGO using a credit card and the credit card company charges the SGO a processing fee, the SGO shall issue a COR to the taxpayer in the amount of the contribution to the SGO, less the amount of the processing fee.  If an SGO is unable to determine the amount of the processing fee prior to issuing a COR to the taxpayer for the contribution, the SGO may use a reasonable method of allocating processing fees to contributions. 

 

1)         The SGO may collect an amount equal to the processing fee from the taxpayer. If the SGO collects the amount of the processing fee from the taxpayer, the SGO may issue the taxpayer a COR in the amount of the contribution received from the taxpayer.

 

EXAMPLE: The taxpayer has a CAC in the amount of $1,000 and makes a contribution of $1,000 using his credit card.  The credit card company remits $970 to the SGO. The taxpayer subsequently pays $30 to the SGO to cover the processing fees.  The SGO can issue CORs in the amount of $970 and $30 to the taxpayer. The taxpayer may treat the amount paid to the SGO in excess of $1,000 (e.g., the $30) to cover the cost of the processing fee as a regular charitable contribution.

 

2)         The SGO may issue a COR to the taxpayer in the amount of the contribution and treat the processing fees as an administrative expense.

 

            EXAMPLE: The taxpayer has a CAC in the amount of $1,000 and makes a contribution of $1,000 using his credit card.  The credit card company remits $970 to the SGO.  The SGO uses 95% of the funds ($950) for scholarships.  It uses 5% for administrative costs ($50) and pays the $30 processing fee out of the 5%. The SGO may issue a COR to the taxpayer in the amount of $1,000.

 

j)          Without the consent of a taxpayer, an SGO may not disclose to any person the contents of a taxpayer's contribution authorization certificate, the amount of contributions made to the SGO by the taxpayer, and the contents of a certificate of receipt issued to the taxpayer by the SGO.

 

Section 1000.600  Scholarship Granting Organizations: Issuance of Scholarships

 

a)         Before granting a scholarship for an academic year, all scholarship granting organizations shall assess and document each student's eligibility for the academic year.  For purposes of determining student eligibility for a school year, an SGO may use the most recently-available tax returns for purposes of determining a household's federal adjusted gross income.

 

b)         A scholarship granting organization shall grant scholarships only to eligible students.  Any eligible student may apply to an SGO for a scholarship.  An SGO may not impose any eligibility requirements to apply for or receive a scholarship beyond those contained in this Part or restrict the issuance of scholarships to any group of students.

 

c)         A scholarship granting organization shall allow an eligible student to attend any qualified school of the student's choosing, subject to the availability of funds and subject to the school being recognized by the Board pursuant to Section 2-3.25o of the School Code prior to the transfer of scholarship funds to the school.  Beginning January 1, 2022, a scholarship granting organization shall allow an eligible student to attend any registered technical academy of the student's choosing, subject to the availability of funds and subject to the school being registered by the Board pursuant to Section 2-3.25 of the School Code prior to the transfer of scholarship funds to the school.  The technical academy must obtain recognition from the Board pursuant to Section 2-3.25o of the School Code within 2 calendar years of its registration with the Board to remain eligible to receive scholarship funds on behalf of an eligible student.

 

d)         Priority Groups

 

1)         Through June 9, 2022, in granting scholarships, a scholarship granting organization shall give priority to the following priority groups:

 

A)        eligible students who received a scholarship from a scholarship granting organization during the previous school year;

 

B)        eligible students who are members of a household whose previous year's total annual income does not exceed 185% of the federal poverty level;

 

C)        eligible students who reside within a focus district determined by the Board; and

 

D)        eligible students who are siblings of students currently receiving a scholarship from a scholarship granting organization.

 

2)         Beginning in the 2022-2023 school year, and on and after June 10, 2022 (the effective date of P.A. 102-1059), and for each school year thereafter, in granting scholarships, a scholarship granting organization shall give first priority to eligible students who received a scholarship from a scholarship granting organization during the previous school year.  Second priority shall be given to the following priority groups:

 

A)        eligible students who are members of a household whose previous year's total annual income does not exceed 185% of the federal poverty level;

 

B)        eligible students who reside within a focus district determined by the Board; and

 

C)        eligible students who are siblings of students currently receiving a scholarship from a scholarship granting organization.

 

3)         All eligible students given second priority must be treated equally for purposes of awarding scholarships, and eligible students in the second priority group do not receive a preference when applying for a scholarship in a subsequent year.

 

EXAMPLE: Student A files his application on February 1, resides in a focus district and is applying for a scholarship for the first time.  Student B files her application on February 15, resides in a focus district and received a scholarship the previous school year. Student C files his application on February 17, is a sibling of Student D and is applying for a scholarship for the first time. Student D files her application on March 1 and received a scholarship from an SGO in the previous school year. Students B and D receive priority over Students A and C.  When awarding scholarships to Students B and D, the SGO must award scholarships based on the date and time their applications are received.  Subsequently, when awarding scholarships to Students A and C, the SGO must award scholarships based on the date and time their applications are received.

 

4)         An eligible student who received a scholarship from any SGO during the previous school year qualifies under subsection (d)(2).

 

EXAMPLE: Student A applies for a scholarship with SGO X.  Student A received a scholarship from SGO Y during the previous school year.  Student A qualifies as a priority student and will receive first priority for the coming school year.

 

e)         Granting of Scholarships by SGOs

A scholarship granting organization shall begin granting scholarships no later than February 1 preceding the school year for which the scholarship is sought. Each priority group identified in subsection (d) shall be eligible to receive scholarships on a first-come, first-served basis until April 1 immediately preceding the school year for which the scholarship is sought starting with the priority groups in accordance with subsection (d).  Applications for scholarships for eligible students meeting the qualifications of one or more priority groups that are received before April 1 must be either approved or denied within 10 business days after receipt.  The date of receipt for purposes of beginning the 10-day period during which the SGO must approve or deny an application shall be the date on which the SGO has sufficient information to determine if the applicant is an eligible student and is in a priority group.  Beginning April 1, all eligible students shall be eligible to receive scholarships without regard to the priority groups identified in subsection (d).

 

1)         For purposes of this subsection (e), "granting scholarships" means that the SGO has reviewed an application, determined the applicant is an eligible student, and notified the applicant that the applicant will receive a scholarship to attend the school chosen by the student, subject to availability of funds and subject to the school being recognized by the Board pursuant to Section 2-3.25o of the School Code prior to the transfer of scholarship funds to the school.

 

2)         An SGO may begin accepting applications after it has been approved by the Department to issue CORs.  (See Section 1000.300.)  An SGO may require each student applying for a scholarship to file the student's own application.  An SGO may allow a household to file one application for multiple students residing in the household.  If a household files an application for multiple students residing in the household, the application for each student shall be deemed received in the order the students appear in the application.

 

A)        On and after April 1, an SGO may suspend accepting or reviewing applications from students when the SGO determines that the funds that are or will be available for awarding scholarships is insufficient to meet demand based on the number of applications received.  Prior to suspending review of applications, the SGO shall review a reasonable number of applications in the event additional funds become available.

 

B)        Upon the request of, or with permission of, the student, an SGO may transfer a student's application to another SGO, subject to the approval of the receiving SGO.  The receiving SGO must stamp the application with the date and time it is actually received and process the application in accordance with this Section.  For example, within 10 days after receipt of the application, the SGO must verify the student's eligibility and determine whether the student should receive priority under subsection (d) due to the student's status as a member of a priority group. (See subsection (e).)  The transferring SGO no longer has any obligation to process the student's application.

 

3)         An applicant may file applications with more than one SGO.  However, an eligible student may accept only one scholarship provided for under the terms of the Act.  Nothing in the Act prohibits an eligible student from receiving other scholarships from an SGO or other source that are paid from funds not subject to the Act.

 

4)         An SGO must stamp all applications with the date and time they are actually received. An SGO may implement a two-stage application process if it is necessary to enable the SGO to accept and process a large number of applications. If an SGO implements a two-step application process:

 

A)        during the first step, the SGO shall obtain the name of the student and the student's home and email address, record the date and time when the information is received, and provide the student a unique identification number. If a custodian initiates the first step, the custodian must provide the names of all students who will be completing applications using the unique identification number; and 

 

B)        during the second step, the student or custodian must complete the application for scholarship.  The date this step is completed is the date that is used to determine if a student's application is received prior to April 1.

 

5)         For a student to receive priority under subsection (d) due to the student's status as a member of a priority group, the SGO must receive the student's application before April 1.  

 

6)         An SGO must review all applications to determine if an applicant is an eligible student and meets the qualifications of one or more priority groups identified in subsection (d).  Applicants who meet the qualifications of one or more priority groups shall be placed in Category 1.  Applicants who do not meet the qualifications of one or more priority groups will be placed in Category 2. 

 

A)        If the SGO determines the application does not contain sufficient information to determine whether the applicant is an eligible student or meets the qualification of one or more priority groups, it shall contact the applicant and request the information necessary to make these determinations. 

 

i)          If the applicant fails to provide the SGO, within 10 days, with the information necessary to determine if the applicant is an eligible student, the application is deemed rejected.  An applicant whose application has been rejected may file a new application.  The new application shall be stamped with the date and time received and processed accordingly.

 

ii)         If the applicant provides the SGO with the information necessary to determine that the applicant is an eligible student, but fails to provide, within 10 days, the information necessary to determine whether the applicant is in a priority group, the applicant shall be deemed not to be in a priority group.  If the applicant provides the information necessary to confirm that the applicant is in a priority group after the 10 days have expired and if funds are available or become available prior to April 1, the application shall be processed based on the date and time the application was first received.  If funds are not available prior to April 1, the application shall be placed in Category 2 and processed based on the date and time the application was received.

 

iii)        Applications filed before April 1 must contain sufficient information to enable the SGO to determine by April 1 whether the applicant is an eligible student or a priority student.  If the application does not contain sufficient information by April 1 to determine whether the applicant is an eligible student, the application is deemed rejected.  If the application contains sufficient information by April 1 to determine whether the applicant is an eligible student, but does not contain sufficient information by April 1 to determine whether the applicant is in a priority group, the application shall be placed in Category 2.

 

B)        Prior to April 1, an SGO may make an initial determination whether an applicant is a member of a priority group.  If it is determined the applicant is not a member of a priority group, the application may be placed in Category 2.  The SGO may complete review of applications from students that are determined to be members of a priority group prior to completing review of the applications from applicants that the SGO has confirmed are not members of a priority group. 

 

7)         Prior to April 1, SGOs shall grant scholarships to applicants in Category 1 in the order in which the applications were received.

 

8)         On and after April 1, SGOs shall grant scholarships to applicants in the following order based on the order in which they were received:

 

A)        Category 1 applications received prior to April 1;

 

B)        Category 2 applications received prior to April 1; and

 

C)        all applications received on or after April 1.

 

EXAMPLE:  Applications are received by an SGO in the following order: Student A on March 27.  Student B on March 28.  Student C on March 29.  Student D on March 30.  Student E on March 31.  Student F on April 1.  Student G on April 2.  Student H on April 3.  Student I on April 4.  Students A and C are in the first priority group identified in subsection (d)(2). E and G are in the second priority group identified in subsection (d)(2).  The SGO has 10 business days from receipt of application to notify priority Students A, C and E whether their applications are granted or denied.  Even though Student G fell within one of the priority groups identified in subsection (d), his application was received after April 1 and thus does not receive priority treatment (see subsection (e)(5)).  Scholarships must be granted in the following order:  A, C, E, B, D, F, G, H, I.

 

9)         For purposes of determining the eligibility of the student to receive a scholarship, an SGO may not impose any criteria or conditions in addition to those contained in the Act.

 

10)         An SGO may impose a deadline of not less than 10 days for a student to accept a scholarship if the scholarship notification sent to the student identifies the school and amount awarded to attend the school and states that funds are available for the student to attend the school.

 

f)         Determination of Scholarship Amounts by SGO

Except as provided in subsection (f)(2), scholarships shall not exceed the lesser of the statewide average operational expense per student among public schools or the necessary costs and fees for attendance at the qualified school.  A qualified school may set a lower maximum scholarship amount for eligible students whose family income falls within subsections (f)(3)(B) and (f)(3)(C); that amount may not exceed the necessary costs and fees for attendance at the qualified school and is subject to the limitations on average scholarship amounts set forth in subsections (f)(3)(B) and (f)(3)(C), as applicable. The qualified school shall notify the scholarship granting organization of its necessary costs and fees as well as any maximum scholarship amount set by the school [35 ILCS 40/40]. The necessary costs and fees for attendance at the qualified school shall be determined in the same manner for eligible students as they are for all other students.

 

1)         On or before January 15 each year, the Board shall provide to the Department the statewide average operational expense per student among public schools. 

 

2)         The statewide average operational expense per student among public schools shall be multiplied by the following factors:

 

A)        for students determined eligible to receive services under the federal Individuals with Disabilities Education Act (20 U.S.C. 1400 et seq.), 2;

 

B)        for students who are English learners, as defined in Section 14C-2(d) of the School Code, 1.2; and

 

C)        for students who are gifted and talented children, as defined in Section 14A-20 of the School Code, 1.1. 

 

3)         The statewide average operational expense per student among public schools shall be multiplied by the factors in subsections (f)(2)(A) through (C) for students who meet those factors, regardless of whether the school selected by the student provides defined programs for these students.  After determining the lesser of the statewide average operational expense per student among public schools (adjusted as necessary for each applicant in accordance with subsection (f)(2)) and the necessary costs and fees for attendance at the qualified school selected by an applicant, the SGO shall calculate the scholarship amount as follows:

 

A)        for eligible students whose household income is less than 185% of the federal poverty level, the scholarship shall be 100% of the amount determined by subsections (f)(2) and (f)(3).

 

B)        for eligible students whose household income is 185% or more of the federal poverty level but less than 250% of the federal poverty level, the average of scholarships shall be 75% of the amount determined.  An SGO is presumed to meet the requirements of this subsection (f)(3)(B) if it provides a scholarship to each eligible student meeting these income levels in the amount of 75% of the amount determined by subsections (f)(2) and (f)(3).

 

C)        for eligible students whose household income is 250% or more of the federal poverty level, the average of scholarships shall be 50% of the amount determined.  An SGO is presumed to meet the requirements of this subsection (f)(3)(C) if it provides a scholarship to each eligible student meeting these income levels in the amount of 50% of the amount determined.

 

g)         An SGO shall distribute scholarship payments to the participating school where the student is enrolled.  Payments must be made by the SGO directly to the participating school.  Prior to distributing payments to a school, the SGO shall verify that the school is recognized by the Board pursuant to Section 2-3.25o of the School Code.  An SGO may request verification from the school that an eligible student has met all the requirements for enrollment and has enrolled in the school prior to distribution of scholarship payments to the school.  An SGO may make payments to a participating school where an eligible student has enrolled under the same terms and conditions as similarly situated students that are not awarded scholarships under the Act.  (See Section 1000.700(a)(1)(A) through (D).)

 

h)         For the 2018-2019 school year through the 2022-2023 school year, each SGO shall expend no less than 75% of the qualified contributions received during the calendar year in which the qualified contributions were received. No more than 25% of the qualified contributions may be carried forward to the following calendar year.

 

i)          For the 2023-2024 school year, each SGO shall expend all qualified contributions received during the calendar year in which the qualified contributions were received, as well as any amount carried forward from the previous year.  No qualified contributions may be carried forward to the following calendar year.

 

j)          An SGO shall allow an eligible student to transfer a scholarship during a school year to any other participating school of the custodian's choice, subject to the availability of funds.  These scholarships shall be prorated.  (See Section 1000.700(e).)

 

EXAMPLE:  An eligible student selects School A and is awarded a scholarship by the SGO.  The SGO uses funds for the scholarship that were designated by an individual taxpayer for School A.  The student decides to transfer to School B mid-year.  The SGO does not have any available funds that were designated for School B, nor does it have any undesignated funds available for School B.  The student may attend School B but the student will lose the student's scholarship because the SGO does not have any funds that are available for the student to attend School B.

 

k)         With the prior approval of the Department, an SGO may transfer funds to another scholarship granting organization if additional funds are required to meet scholarship demands at the receiving scholarship granting organization or if necessary for the SGO seeking to transfer the funds to remain in compliance with the requirements of this Part.  Funds transferred before June 1 must be used for scholarships in the same region to which the funds were originally directed in the CAC issued to the taxpayer.  All transferred funds must be deposited by the receiving SGO into its scholarship accounts.  All transferred amounts received by any SGO must be separately disclosed to the Department.

 

l)          If the approval of an SGO is revoked as provided in Section 20 of the Act or the SGO is dissolved, all remaining qualified contributions of the SGO shall be transferred to another SGO.  An SGO is deemed dissolved when it no longer has approval from the Department to award scholarships.  This may occur when an SGO elects to voluntarily terminate its status as an SGO during a calendar year after having received approval of its application by the Department or when the SGO does not seek recertification pursuant to Section 1000.1000.  Funds must be transferred within 10 business days.  Within 3 business days after the transfer, the revoked SGO must notify the Department of the amount transferred and the name and address of the receiving SGO or SGOs.  Funds transferred before June 1 must be used for scholarships in the same region to which the funds were originally directed in the CAC issued to the taxpayer.  All transferred funds must be deposited by the receiving SGO into its scholarship accounts.

 

m)        SGOs shall make reasonable efforts to advertise the availability of scholarships to all eligible students.  SGOs may not limit those efforts to any one school or subset of schools.  [35 ILCS 40/40]

 

(Source:  Amended at 47 Ill. Reg. 5291, effective March 21, 2023)

 

Section 1000.700  Qualified Schools Responsibilities

 

a)         A qualified school that accepts scholarship students must do all of the following:

 

1)         provide to an SGO, upon request, but no later than April 1, all documentation required for the student's participation, including all necessary costs and fees.  A qualified school is permitted to establish the qualifications an eligible student must meet, the tuition (i.e., necessary costs and fees) an eligible student must pay, and the conditions a student must comply with to attend the school.  The qualifications, tuition, and conditions for an eligible student to attend the school may be no greater or more stringent than those established and maintained for other students attending the school.  The qualifications, tuition, and conditions must be applied to eligible students in a nondiscriminatory manner.  For example, a school may:

 

A)        provide a discount for tuition when more than one student in a household attends the school.  An eligible student receiving a scholarship under the Act must be eligible to receive the discount;

 

B)        require students to perform charity or volunteer work to be enrolled in the school.  The school shall impose the same hour requirements on an eligible student receiving a scholarship under the Act;

 

C)        establish a disciplinary code that students must abide by to attend the school.  The school shall impose the same disciplinary code on an eligible student receiving a scholarship under the Act;

 

D)        establish academic requirements to be enrolled at the school and to remain enrolled at the school.  The school shall impose the same academic requirements on an eligible student receiving a scholarship under the Act.

 

2)         be academically accountable to the custodian for meeting the educational needs of the student by:

 

A)        at a minimum, annually providing to the custodian a written explanation of the student's progress; and

 

B)        annually administering assessments required by Section 45(a) of the Act in the same manner in which they are administered at public schools pursuant to Section 2-3.64a-5 of the School Code, except for students who have been granted a scholarship under the Act to attend a technical academy. 

 

3)         provide notice to the student's custodian on occasions when an eligible student is not complying with the qualified school's published policies, for example, attendance requirements, volunteer work requirements, or the disciplinary code.

 

4)         report to the SGO, within 10 business days, the name of any student awarded a scholarship by the SGO who leaves the school during the school year.

 

b)         Except for students who have been granted a scholarship under the Act to attend a technical academy, students who have been granted a scholarship under this Act shall be annually assessed at the qualified school where the student attends school in the same manner in which students that attend public schools are annually assessed pursuant to Section 2-3.64a-5 of the School Code.  Such qualified school shall pay costs associated with this requirement.  [35 ILCS 40/45] The Board shall bill participating qualified schools for all costs associated with administering assessments required by this subsection.  The participating qualified schools shall ensure that all test security and assessment administration procedures are followed and must report individual student scores to the custodians of the students.  The independent research organization described in Section 45(b) of the Act shall be provided all student score data in a secure manner by the participating qualified school.

 

c)         The inability of a qualified school to meet the requirements of this Section shall constitute a basis for the ineligibility of the qualified school to participate in the scholarship program as determined by the Board.  [35 ILCS 40/50]

 

d)         A school that receives scholarship funds for a student from multiple SGOs shall notify the SGOs, the student's custodian and the student. Within 5 business days after receipt of the notice, the SGO shall notify the school whether the student has notified the SGO that the student has accepted a scholarship from the SGO. 

 

A)        If the student has accepted a scholarship from an SGO, the school shall retain the funds received from the SGO the student has notified and return the funds to the remaining SGOs within 10 business days. If the student notified multiple SGOs that the student has accepted a scholarship, the student shall be deemed to have selected the scholarship award in the greatest amount.  If the scholarship awards are of equal value, the student shall be deemed to have selected the award the school received first.  The school shall return the funds to the remaining SGOs within 10 business days.

 

B)        If the student has not notified any of the SGOs that the student has accepted a scholarship, the student shall, within 10 business days after receipt of the notice from the school, notify the SGOs and the school which scholarship awards the student has selected.  If the student fails to notify the SGOs and the school within 10 business days which scholarship award the student has selected, the student shall be deemed to have selected the scholarship award in the greatest amount.  If the awards are of equal value, the student shall be deemed to have selected the award from the SGO the school received funds from first, and the school shall return the funds received from the other SGO or SGOs.  The school shall return the funds to the SGO or SGOs that the student has not selected within 10 business days after the date by which the student is required to notify the school and the SGOs

 

e)         A school that receives scholarship funds for a student from an SGO must return unused funds to the SGO for any student who leaves the school during the school year.  The school may retain funds for necessary costs and fees that were expended or were due and payable, including tuition, for the period the student attended the school.  The school shall return the balance to the SGO within 10 business days after the student leaves the school.

 

(Source:  Amended at 46 Ill. Reg. 10924, effective June 7, 2022)

 

Section 1000.800  Custodian and Student Responsibilities

 

a)         The custodian must select a qualified school and apply for the admission of his or her child.

 

b)         Except for students who have been granted a scholarship under the Act to attend a technical academy, the custodian shall ensure that the student participating in the scholarship program takes the assessment required by Section 45(a) of the Act.

 

c)         Each custodian and each student has an obligation to comply with the qualified school's published policies.

 

d)         The custodian shall authorize the SGO to access information needed for income eligibility determinations.  [35 ILCS 40/55]

 

(Source:  Amended at 46 Ill. Reg. 10924, effective June 7, 2022)

 

Section 1000.900  Scholarship Granting Organizations: Reports

 

a)         Within 180 days after the end of its fiscal year, each SGO must provide to the Department a copy of a financial audit of its accounts and records conducted by an independent certified public accountant in accordance with auditing standards generally accepted in the United States, government auditing standards, and this Part.  

 

1)         The audit must include a report on financial statements presented in accordance with generally accepted accounting principles. 

 

2)         The audit must include evidence that no less than 95% of qualified contributions received were used to provide scholarships to eligible students. To qualify as an SGO, the SGO must use at least 95% of the qualified contributions received during an SGO's taxable year for scholarships.  (See definition of "scholarship granting organization" in Section 1000.100.)  An SGO is not required to distribute 95% of the funds during the taxable year in which the contributions were received.

 

EXAMPLE: An SGO's taxable year ends June 30.  The SGO receives contributions in the amount of $1,000,000 before June 30.  The SGO is not obligated to use 95% of the funds before June 30, the end of the SGO's taxable year. It is required to ultimately distribute 95% of the funds for scholarships.  In addition, the SGO is required to meet any other requirements contained in Section 1000.600(h) and (i).

 

3)         The audit must include an attestation that the SGO awarded scholarships in compliance with the definition of "eligible student" and the guidelines contained in Section 1000.600. 

 

4)         The Department shall review all audits submitted pursuant to this subsection (a)(4).  The Department shall request any significant items that were omitted in violation of this Part.  The items must be provided within 45 days after the date of request.  If a scholarship granting organization does not comply with the Department's request, the Department may revoke the scholarship granting organization's ability to issue certificates of receipt.

 

b)         An SGO that is approved to receive qualified contributions shall report to the Department, on a form prescribed by the Department, by January 31 of each calendar year beginning in the year 2019.  The report shall include:

 

1)         the total number of certificates of receipt issued during the immediately preceding calendar year;

 

2)         the total dollar amount of qualified contributions received, as set forth in the certificates of receipt issued during the immediately preceding calendar year;

 

3)         the total number of eligible students utilizing scholarships for the immediately preceding calendar year and the school year in progress and the total dollar value of the scholarships;

 

4)         the name and address of each qualified school for which scholarships using qualified contributions were issued during the immediately preceding calendar year, detailing the number, grade, race, gender, income level, and residency by Zip Code of eligible students and the total dollar value of scholarships being utilized at each qualified school by priority group, as identified in Section 40(d) of the Act; and [35 ILCS 40/35]

 

5)         a list of all transfers of funds made pursuant to Section 1000.600(k) and (l) and the names and addresses of the SGOs who received the funds.

 

Section 1000.1000  Scholarship Granting Organizations: Annual Recertification; Revocation

 

a)         Each SGO that receives approval to issue certificates of receipt shall file an application for recertification on an annual basis.  The application for recertification shall be in the form and manner prescribed in Section 1000.300 and shall include:

 

1)         certification from the Director or Chief Executive Officer of the organization that the organization has complied with and continues to comply with the requirements of the Act, including evidence of that compliance; and

 

2)         a copy of the organization's current financial statements.

 

b)         The Department may revoke the approval of an SGO to issue certificates of receipt upon a finding that the organization has violated the Act or this Part.  These violations shall include, but need not be limited to, any of the following:

 

1)         failure to meet the requirements of the Act;

 

2)         failure to maintain full and adequate records with respect to the receipt of qualified contributions;

 

3)         failure to supply these records to the Department; or

 

4)         failure to provide notice to the Department of the issuance of certificates of receipt pursuant to Section 35 of the Act.

 

c)         Within 5 days after the determination to deny recertification or to revoke approval, the Department shall provide notice of the determination to the SGO and information regarding the process to request a hearing to appeal the determination.  [35 ILCS 40/20]  An SGO whose recertification was denied or approval revoked may, within 20 days after notice of the determination, protest the Department's determination by making a written request for a hearing.  After receipt of the request for a hearing, the Department shall give notice to the SGO of the time and place fixed for the hearing, shall hold a hearing, and shall issue its final administrative decision to the SGO.  In the absence of a protest within 20 days, the Department's decision shall become final without any further determination being made or notice given. 

 

Section 1000.APPENDIX A   Invest In Kids: The Five Regions of the State of Illinois

 

This Appendix A sets forth the 5 regions into which the State of Illinois will be divided for purposes of awarding income tax credits under the Invest in Kids Act in a manner that is geographically proportionate to enrollment in recognized non-public schools.

 

a)         Region 1 consists of the following county:  Cook;

 

b)         Region 2 consists of the following counties:  Boone, Carroll, DeKalb, DuPage, Jo Daviess, Kane, Kendall, Lake, Lee, McHenry, Ogle, Stephenson and Winnebago;

 

c)         Region 3 consists of the following counties:  Bureau, Fulton, Grundy, Hancock, Henderson, Henry, Iroquois, Kankakee, Knox, LaSalle, Marshall, McDonough, Mercer, Peoria, Putnam, Rock Island, Stark, Tazewell, Warren, Whiteside and Will;

 

d)         Region 4 consists of the following counties:  Adams, Brown, Calhoun, Cass, Champaign, Clark, Coles, Cumberland, De Witt, Douglas, Edgar, Ford, Greene, Jersey, Livingston, Logan, Macon, Macoupin, Mason, McLean, Menard, Morgan, Moultrie, Piatt, Pike, Sangamon, Schuyler, Scott, Vermilion and Woodford; and

 

e)         Region 5 consists of the following counties:  Alexander, Bond, Christian, Clay, Clinton, Crawford, Edwards, Effingham, Fayette, Franklin, Gallatin, Hamilton, Hardin, Jackson, Jasper, Jefferson, Johnson, Lawrence, Madison, Marion, Massac, Monroe, Montgomery, Perry, Pope, Pulaski, Randolph, Richland, Saline, Shelby, St. Clair, Union, Wabash, Washington, Wayne, White and Williamson.

 

(Source:  Amended at 46 Ill. Reg. 10924, effective June 7, 2022)