Illinois State Tax Credit for Schools 2017

How Do You Want Your Money Spent?

or… “Have you heard about the Illinois Tax Credit Scholarship?”

A lot has been said in the media over the last few weeks about changes to the Federal Tax Code. Have you been made aware however of the change to the Illinois State Tax Credit program? Passed in August of 2017 during the compromise that helped restore an actual budget to the State of Illinois, for the next five years, it allows you to make a donation to scholarships for students in Illinois through a Scholarship Granting Organization (SGO) and receive a 75% tax credit on your Illinois State Tax Bill. While legitimate concerns have been raised about how this law effects funding in a state that was already doing a poor job funding education, it is currently the law of the land for five years and there is no benefit to be found in not educating ourselves on how it works and using the tax-credit where appropriate

As an example of how it works, if you typically owe $5,000 in state taxes, a donation of $5,000 to an SGO to be used in accord with the donor’s intention may lower your state tax bill to $1,250 while directly impacting Catholic Education in the State of Illinois. This isn’t a deduction, this is an actual tax credit. There are however restrictions and you will need to act on January 2, 2018 to take advantage of this. More information is on our website at www.saintandrewchicago.com and the website of the Archdiocese of Chicago www.archchicago.org
Amongst some of the restrictions are that the state only allows for $75 million worth of credits to be applied. This means all the use of this credit will likely be filled by all applicants on or nearly after January 2, 2018.

Will Saint Andrew benefit from this? That depends on how you look at it. The use of the funds from SGO scholarships is restricted to those within 300% of the poverty rate. That amounts to a family of four making less than $73,800. A donation to an SGO in the name of Saint Andrew would be restricted and could only be used at our school. We believe there are some families within our parish who will qualify. Another choice for a potential donor is to make a donation that is directed toward our sister schools that we support (Saint Thomas of Canterbury and Saint Mary of the Lake) where numerous families qualify for support.

Another good choice could be a scholarship gift to the Archdiocese of Chicago School System. The Archdiocese of Chicago currently subsidizes the Archdiocesan Schools in excess of $30 million dollars per year. This tax credit initiative has the potential of replacing the Archdiocesan subsidy with $40 million dollars or more in scholarships. That could free up $30 million dollars for the Archdiocese which in turn alleviates stress on the contributions that we pay towards administrative support from both the Archdiocese of Chicago and the Archdiocesan School System. These funds can then be reallocated to the mission of the Archdiocese including Evangelization, building up communities racked by gun violence and poverty, restoring crumbling infrastructure, support for seminarian and lay ministry formation, etc.

Freeing up of funds in the larger administration also ensures that there is the proper human resources from the Archdiocese to support Saint Andrew School. So the impact toward Saint Andrew may not be felt as directly as a donation to our parish or school, but in tandem with your financial stewardship of Saint Andrew, the tax credit serves as a way to maximize the good you can do with the money with which God has blessed you. Please pray and consider how this may impact your charitable giving in the year ahead and read up on this tax credit at www.archchicago.com/tax-credit-scholarships

 

 

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