Is your family eligible for Illinois’ tax credit scholarships?
The tax credit scholarship program included in the school funding proposal passed by the General Assembly would be the first of its kind in Illinois, and one of the largest of such programs in the nation.
Senate Bill 1947 passed out of the Senate on Aug. 29, clearing both chambers of the General Assembly. This bill is an education-funding proposal based on Senate Bill 1, and also includes a tax credit scholarship program. The Senate is now expected to send SB 1947 to the governor to sign into law.
The tax credit scholarship program – which would be the first of its kind in Illinois and one of the nation’s largest such programs – would empower thousands of low-income students to escape failing public schools.
How the credit works
Beginning Jan. 1, 2018, individuals and corporations may donate money to the scholarship program. The donor will receive a credit of 75 cents for every dollar donated, up to a maximum tax credit of $1 million.
Individuals may direct their donations to particular schools or groups of schools, but not to particular students or groups of students. Corporations, however, may not direct their contributions to particular schools, groups of schools, students or groups of students.
The money will be managed by nonprofit scholarship-granting organizations that will be responsible for granting and distributing the scholarships to eligible students.
The organizations will also be responsible for issuing receipts to donors within 30 days of donation, as well as notifying the Department of Revenue of the donations.
How the scholarships work
The scholarships may be awarded to families whose income does not exceed 300 percent of the federal poverty level. For example, a family of four earning $73,800 or less would qualify. In addition, the bill refers to “focus districts,” defined as districts that have at least one school with one or more subgroups in the lowest 10 percent of student performance for those subgroups, or districts that have at least one school with a graduation rate of less than 60 percent.
The program prioritizes students who have received a scholarship in previous years, families whose income is below 185 percent of the federal poverty level, students who live in focus districts, and students who are siblings of students currently receiving a scholarship.
The amount of the scholarship also depends on family income. For example, for a family whose income is less than 185 percent of the federal poverty level, or $45,510 for a family of four, the student may receive a scholarship to a school of his or her choice that would be worth either the school’s tuition or an amount equal to what the state pays per student for public schools, whichever is less. But a family with a higher income will receive less scholarship money. For example, families who make 250 percent or more of the federal poverty level, or $61,500 for a family of four, may receive a partial scholarship. There are also instances where the scholarship could be worth more, such as for students with disabilities or English learners.
A step forward
Creating the scholarship program is a step in the right direction. However, there is still work to be done.
Under the program, Illinois parents and students wouldn’t enjoy automatic ownership of scholarship money, but rather must rely on an intermediary to award a limited number of students money to attend a school of their choice.
Additionally, the program is set to automatically repeal Jan. 1, 2024. Five years is a good start for the program, but its automatic repeal also creates uncertainty for families whose children are receiving scholarships.
The General Assembly should stop restricting students to their ZIP codes and continue to enact changes to allow for more school choice.