Illinois Gives Tax Credit Act: a new state income tax credit program for Illinois donors
CFNIL is proud to be a Qualified Community Foundation (QCF) as required for the Illinois Gives Tax Credit Act, a 25% state tax credit on qualified gifts, providing significant benefits to taxpayers, nonprofits, and the communities of Illinois!
Effective for tax years ending on or after December 31, 2025, the Illinois Gives Tax Credit Act creates an income tax credit for taxpayers who make a qualified contribution to a permanent endowment fund during the taxable year. The endowment funds provide charitable grants exclusively for the benefit of residents of the State or charities and charitable projects located in the State.
Eligible endowment funds must be held by Qualified Community Foundations (QCFs) who must be approved by the Illinois Department of Revenue (IDOR) before accepting contributions eligible for income tax credits or issuing Certificates of Receipts (CORs) to donors.
Click through the steps for a simplified explanation of how taxpayers may take advantage of this program.
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CURIOUS ABOUT YOUR POTENTIAL BENEFIT?
Enter your intended gift and federal tax bracket in the Tax Credit Calculator to see the potential savings thanks to Illinois Gives!
For ease of illustration, this calculator does not factor in the federal/state net tax effect, and assumes the donor plans to claim a charitable deduction on their federal tax return. Actual total credit may vary based on multiple factors; provided for illustrative purposes only.
Frequently Asked Questions
THE BASICS
- What is a Qualified Community Foundation (QCF)?
- Is the Community Foundation of Northern Illinois a QCF?
- What is a permanent endowment fund?
- How are the Illinois Gives tax credits awarded?
- How many credits are available?
- What benefits do taxpayers receive by making a qualified contribution?
- What do all these acronyms mean?
THE SPECIFICS
- How do I get approved for the Illinois Gives tax credit?
- When can I submit an application for approval?
- What are the eligibility requirements to claim a credit?
- When should I make the approved contribution to the QCF?
- How do I claim my tax credit?
- Can I apply for a Contribution Authorization Certificate for a donation I already made?
- My spouse and I file a joint individual income tax return. How do we claim the credit?
- If I don't use all the credit in one year, can I get a refund or carry forward the unclaimed credits?
- I have more questions. Who do I contact?
THE BASICS
What is a Qualified Community Foundation (QCF)?
A community foundation that meets the standards established by Community Foundations National Standards and is authorized to receive Illinois Gives charitable contributions. QCFs are registered with IDOR as non-profit organizations. After approval by IDOR, QCFs can receive qualified Illinois Gives contributions to their permanent endowment funds from individuals and businesses.
Is the Community Foundation of Northern Illinois a QCF?
Yes! CFNIL has applied for and received Qualified Community Foundation status.
What is a permanent endowment fund?
A permanent endowment is a fund that is kept in perpetuity, with only its earnings providing regular operating support and funding for charitable projects. Other than investing, the holding foundation may not use any of the money from the initial donations (or from property that was liquidated). The foundation uses the investment earnings to support projects as directed by the fund agreement.
To qualify for the Illinois Gives Tax Credit Program, the permanent endowment funds must:
- provide charitable grants exclusively for the benefit of residents of Illinois or charities and charitable projects located in Illinois,
- exist in perpetuity,
- have an annual spending rate based on the foundation spending policy (not to exceed 7%), and
- not be a donor advised fund.
How are the tax credits awarded?
Generally, credits shall be awarded on a first-come, first-served basis. However, 25% of the annual credit amount is reserved for contributions considered “small gifts”. For the purpose of the Illinois Gives Tax Credit Program, “small gifts” are gifts of $25,000 or less. If you are trying to make a “large gift” donation but 75% of the total eligible contributions for the year have already been made in gifts larger than $25,000, your request will not be accepted. Only “small gifts” contributions will be accepted at that time (unless the total credit maximum has been reached - $5 million).
How many credits are available?
The Illinois Department of Revenue (IDOR) may issue tax credits up to 25% of the total allowed annual donations at both the statewide, single QCF, and individual taxpayer levels. The maximum allowed donations and related credits are as follows:
| MAXIMUM PROGRAM TOTAL ANNUAL DONATIONS ALLOWED | $20,000,000 |
| MAXIMUM PROGRAM TOTAL ANNUAL TAX CREDITS ISSUED | $5,000,000 |
| MAXIMUM DONATIONS TO ANY SINGLE QCF ALLOWED | $3,000,000 |
| MAXIMUM TAX CREDITS VIA ANY SINGLE QCF ISSUED | $750,000 |
| MAXIMUM DONATION PER TAXPAYER ALLOWED | $400,000 |
| MAXIMUM TAX CREDIT PER TAXPAYER ISSUED | $100,000 |
What benefits do taxpayers receive by making a qualified contribution?
Beginning with tax years ending on or after December 31, 2025, Illinois taxpayers who are approved to participate in the Illinois Gives Tax Credit Program can receive a state income tax credit in the amount of 25 percent (25%) of their total qualified contributions made to one or more permanent endowment funds held by Qualified Community Foundations (QCFs) during a taxable year. Income tax credits cannot exceed $100,000 per taxpayer, per year.
Example: A taxpayer makes a qualified contribution of $10,000 to an approved QCF. The taxpayer will be eligible to claim a $2,500 income tax credit.
What do all these acronyms mean?
- IDOR = Illinois Department of Revenue: The department that oversees and administers the Illinois Gives Tax Credit Act process
- CAC = Contribution Authorization Certificate: Approval issued from IDOR provided to taxpayers who have filed an online application for their intended contribution(s) to QCF(s).
- CFNIL = Community Foundation of Northern Illinois
- COR = Certificate of Receipt: After QCF confirms they have received the contribution, a COR is automatically created and issued to the taxpayer through MyTax Illinois. Once the taxpayer receives a COR, the taxpayer must claim the credit on that year’s income tax return regardless of whether or not the taxpayer has an income tax liability that year.
- QCF = Qualified Community Foundation: A community foundation that meets the standards established by Community Foundations National Standards and is authorized to receive Illinois Gives charitable contributions. QCFs are registered with IDOR as non-profit organizations. After approval by IDOR, QCFs can receive qualified Illinois Gives contributions to their permanent endowment funds from individuals and businesses.
THE SPECIFICS
How do I get approved for the Illinois Gives tax credit?
Taxpayers with an active income tax account must apply online to IDOR for approval to make contributions through the free online tax portal, MyTax Illinois. Approval is granted automatically as long as the thresholds outlined in the Illinois Gives Tax Credit Program have not been met. Taxpayers will choose the Qualified Community Foundation (QCF) to which they intend to make their contribution when applying for the credit. See the step-by-step process with screenshots from My Tax Illinois below!
Example: A taxpayer files an online application intending to contribute $100,000 to the Community Help Foundation, which is a registered QCF with IDOR. As long as Community Help Foundation has not met its maximum donation amount ($3 million in donations which equates to $750,000 in credit) or the donation would not make the “large gift” donation total exceed the maximum ($15 million in donations which equates to $3.75M in credit), the taxpayer will receive a Contribution Authorization Certificate (CAC) from IDOR authorizing the $100,000 contribution to the QCF, which equates to a $25,000 tax credit.
Important: You must have a registered MyTax Illinois account to apply for the credit. You are encouraged to create a MyTax Illinois account as soon as possible to avoid processing delays. For individual taxpayers, it can take between 7-10 days for your MyTax Illinois account to be set up.
When can I submit an application to be approved for the Illinois Gives tax credit?
The Illinois Gives tax credit application for individual and business taxpayers opened January 1, 2025, for tax year 2025. The application will open on January 1 of each subsequent tax year until the Illinois Gives Tax Credit Act sunsets (2029) or later if the act's end date is extended by the state legislature.
Income tax credits are generally awarded on a first-come, first-served basis, provided that certain thresholds established in the Illinois Gives Tax Credit Act have not been met. Remember, you must have a MyTax Illinois account in order to apply for the credit. To receive a tax credit for your contribution, the payment must be received by the QCF by the last day of your filing period, and the QCF must confirm receipt of the contribution.
What are the eligibility requirements to claim a credit?
After a taxpayer has applied and been approved for an Illinois Gives tax credit, taxpayers are issued a CAC by IDOR via their MyTax Illinois account. Within 10 business days, the taxpayer must provide the QCF with their contribution to earn a valid credit.
Please note:
- If a CAC is requested with fewer than 10 business days left in the year, the payment must be received by the QCF by December 31st.
- To receive and use a new Illinois Gives tax credit, you must apply for a CAC for each new donation.
- Taxpayers must have a MyTax Illinois account to apply for and receive a CAC for the credit.
When should I make the approved contribution to the QCF?
IDOR will electronically issue a Contribution Authorization Certificate (CAC) to your MyTax Illinois account within three business days after your application has been approved. You must make your contribution to the QCF within 10 business days after the date of the issuance of the CAC. Be sure to provide a copy of the CAC to the QCF. Within 30 business days of receiving your contribution, the QCF will issue you a Certificate of Receipt (COR).
Please note: You must apply for a CAC for each new donation to receive and use a new Illinois Gives tax credit.
How do I claim my tax credit?
After receiving the contribution, the QCF must confirm the contribution within 30 business days of receiving it for the income tax credit to be valid. After confirmation, a COR is automatically created and issued to the taxpayer through MyTax Illinois. Once the taxpayer receives a COR, the taxpayer must claim the credit on that year’s income tax return regardless of whether the taxpayer has an income tax liability that year or not.
For purposes of this credit, a combined filing group is considered one taxpayer and would be subject to the $100,000 Illinois Gives tax credit cap per combined return, not per each individual member. Members of a combined filing group shall be treated as one taxpayer for purposes of any return or amended return.*
*86 Ill. Adm. Code 100.5270(d)
Can I apply for a Contribution Authorization Certificate for a donation I already made?
Yes. You may apply for a CAC up to 15 business days after donating to a QCF. However, the donation and the CAC must be in the same calendar year.
Important: Making a contribution before applying for a CAC does not guarantee an income tax credit. Multiple factors may result in the donation not being eligible for the credit, including: the Illinois Gives tax credit limit has been met; donor has earned the maximum amount of Illinois Gives tax credits; QCF has reached its maximum amount of eligible contributions.
Please note: You must apply for a CAC for each new donation to receive and use a new Illinois Gives tax credit.
My spouse and I file a joint individual income tax return. How do we claim the Illinois Gives tax credit?
Individuals filing a joint return are each allowed to claim a credit they themselves have received, which may not exceed $100,000. A jointly filed return may not claim more than $200,000 in Illinois Gives credit.
Example: Two married individuals contribute money to a fund. One of the married individuals, Individual 1, contributes $500,000 while their spouse, Individual 2, only contributes $200,000. The couple decides to file a joint return. Only $400,000 of Individual 1’s contributions are eligible for a credit, which equates to a credit of $100,000 (the maximum amount a taxpayer may earn in a year). The maximum credit allowed to be claimed on their joint return would be $150,000, which consists of the $100,000 of credit for Individual 1 and Individual 2’s credit of $50,000 ($200,000 multiplied by 25%). The extra $100,000 in contributions that Individual 1 made to a fund was not eligible for an income tax credit under this Act and, therefore, could not be claimed on the joint filed return.
If I don't use all my tax credits, can I get a refund or carry forward the unclaimed credits?
You cannot receive a refund for any unused tax credits. Any income tax credit amount that exceeds your tax liability for the year in which you claimed the credit may be carried forward and applied to your tax liability in the subsequent five taxable years. Income tax credits are applied to the earliest year for which there is a tax liability. Credits cannot be carried back to a tax year prior to the issuance of the Contribution Authorization Certificate (CAC).
Please note: You must apply for a CAC for each new donation to receive and use a new Illinois Gives tax credit. If you are claiming unused income tax credits from a prior year, approval is not required.
Questions? Contact Dan!
