State of Illinois
2023 and 2024


Introduced 2/17/2023, by Rep. Amy L. Grant


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 for taxable years ending before January 1, 2034 (currently, January 1, 2024). 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, 2034 January 1, 2024, each
10taxpayer for whom a tax credit has been awarded by the
11Department under the Invest in Kids Act is entitled to a credit
12against the tax imposed under subsections (a) and (b) of
13Section 201 of this Act in an amount equal to the amount
14awarded under the Invest in 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(Source: P.A. 102-699, eff. 4-19-22.)
14    Section 10. The Invest in Kids Act is amended by changing
15Sections 40 and 65 as follows:
16    (35 ILCS 40/40)
17    (Section scheduled to be repealed on January 1, 2025)
18    Sec. 40. Scholarship granting organization
20    (a) Before granting a scholarship for an academic year,
21all scholarship granting organizations shall assess and
22document each student's eligibility for the academic year.
23    (b) A scholarship granting organization shall grant
24scholarships only to eligible students.



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



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



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1        (2) for eligible students whose household income is
2    185% or more of the federal poverty level but less than
3    250% of the federal poverty level, the average of
4    scholarships shall be 75% of the amount determined
5    pursuant to this subsection (e) and subsection (e-5) of
6    this Section; and
7        (3) for eligible students whose household income is
8    250% or more of the federal poverty level, the average of
9    scholarships shall be 50% of the amount determined
10    pursuant to this subsection (e) and subsection (e-5) of
11    this Section.
12    (e-5) The statewide average operational expense per
13student among public schools shall be multiplied by the
14following factors:
15        (1) for students determined eligible to receive
16    services under the federal Individuals with Disabilities
17    Education Act, 2;
18        (2) for students who are English learners, as defined
19    in subsection (d) of Section 14C-2 of the School Code,
20    1.2; and
21        (3) for students who are gifted and talented children,
22    as defined in Section 14A-20 of the School Code, 1.1.
23    (f) A scholarship granting organization shall distribute
24scholarship payments to the participating school where the
25student is enrolled.
26    (g) For the 2018-2019 school year through the 2032-2033



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12022-2023 school year, each scholarship granting organization
2shall expend no less than 75% of the qualified contributions
3received during the calendar year in which the qualified
4contributions were received. No more than 25% of the qualified
5contributions may be carried forward to the following calendar
7    (h) For the 2033-2034 2023-2024 school year, each
8scholarship granting organization shall expend all qualified
9contributions received during the calendar year in which the
10qualified contributions were received. No qualified
11contributions may be carried forward to the following calendar
13    (i) A scholarship granting organization shall allow an
14eligible student to transfer a scholarship during a school
15year to any other participating school of the custodian's
16choice. Such scholarships shall be prorated.
17    (j) With the prior approval of the Department, a
18scholarship granting organization may transfer funds to
19another scholarship granting organization if additional funds
20are required to meet scholarship demands at the receiving
21scholarship granting organization. All transferred funds must
22be deposited by the receiving scholarship granting
23organization into its scholarship accounts. All transferred
24amounts received by any scholarship granting organization must
25be separately disclosed to the Department.
26    (k) If the approval of a scholarship granting organization



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1is revoked as provided in Section 20 of this Act or the
2scholarship granting organization is dissolved, all remaining
3qualified contributions of the scholarship granting
4organization shall be transferred to another scholarship
5granting organization. All transferred funds must be deposited
6by the receiving scholarship granting organization into its
7scholarship accounts.
8    (l) Scholarship granting organizations shall make
9reasonable efforts to advertise the availability of
10scholarships to eligible students.
11(Source: P.A. 102-699, eff. 4-19-22; 102-1059, eff. 6-10-22;
12revised 8-3-22.)
13    (35 ILCS 40/65)
14    (Section scheduled to be repealed on January 1, 2025)
15    Sec. 65. Credit period; repeal.
16    (a) A taxpayer may take a credit under this Act for tax
17years beginning on or after January 1, 2018 and ending before
18January 1, 2034 January 1, 2024. A taxpayer may not take a
19credit pursuant to this Act for tax years beginning on or after
20January 1, 2034 January 1, 2024.
21    (b) This Act is repealed on January 1, 2035 January 1,
23(Source: P.A. 102-16, eff. 6-17-21.)
24    Section 99. Effective date. This Act takes effect upon
25becoming law.