Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart B - CREDITS › Section 100.2175 - Invest in Kids Credit (IITA 224)

Current through Register Vol. 48, No. 28, July 12, 2024
a)
				For taxable years beginning on and after January 1, 2018, and ending before
				January 1, 2023, a taxpayer may claim a credit against the income tax imposed
				under IITA Section 201(a) and (b) in an amount equal to 75% of the qualified
				contribution amount awarded under the Invest in Kids Act that is shown on the
				Certificate of Receipt issued by an approved scholarship granting organization
				under 86 Ill. Adm. Code
				1000.500. The
				credit may not be applied against the personal property replacement tax imposed
				under IITA Section 201(c) and (d).
b) The credit allowed under this Section may
				be taken in the taxable year that includes the date of the Certificate of
				Receipt issued by an approved scholarship granting organization under 86 Ill.
				Adm. Code 1000.500. The credit may not be transferred.
The credit may
				not be carried back and may not reduce the taxpayer's liability to less than
				zero. If the amount of the credit exceeds the tax liability for the year, the
				excess may be carried forward and applied to the tax liability of the 5 taxable
				years following the excess credit year. The credit shall be applied to the
				earliest year for which there is a tax liability. If there are credits from
				more than one tax year that are available to offset a liability, the earlier
				credit shall be applied first
. (IITA Section 224(c))
c) In the case of a credit earned by a
				partnership or subchapter S corporation, the credit passes through to the
				owners as provided in the partnership agreement under IRC section 704(a) or in
				proportion to their ownership of the stock of the subchapter S corporation
				under IRC section 1366(a). The credit earned by a partnership or subchapter S
				corporation will be treated as earned by its owners as of the last day of the
				taxable year of the partnership or subchapter S corporation in which the
				Certificate of Receipt is issued by an approved scholarship granting
				organization under 86 Ill. Adm. Code 1000.500, and shall be allowed to each
				owner in the taxable year of the owner in which the taxable year of the
				partnership or subchapter S corporation ends.
d)
A credit awarded under the Invest
				in Kids Act may not be claimed for any qualified contribution for which the
				taxpayer claims a federal income tax deduction
. (IITA Section
				224(d))
e) A taxpayer shall retain
				and provide at the request of the Department the Certificate of Receipt issued
				by an approved scholarship granting organization and, in the case of a partner
				in a partnership or shareholder of a subchapter S corporation that earned the
				credit, a Schedule K-1-P or other written statement from the partnership or
				subchapter S corporation stating the portion of the total credit shown on the
				Certificate of Receipt that is allowed to that partner or shareholder and the
				taxable year of the partnership or subchapter S corporation in which the
				Certificate of Receipt was issued.
f) EXAMPLE 1: Individual A contributes $5,000
				to an approved scholarship granting organization on January 25, 2018.
				Individual A receives a Certificate of Receipt in the amount of $5,000. On
				April 1, 2019, Individual A files a 2018 U.S. Form 1040 with Schedule A
				Itemized Deductions. Individual A does not include any part of the $5,000
				contribution under Gifts to Charity on Schedule A. Individual A is entitled to
				claim an Invest in Kids tax credit in the amount of $3,750 on Individual A's
				2018 Form IL-1040, Schedule 1299-C.
EXAMPLE 2: Individual B contributes $5,000 to an approved
				  scholarship granting organization on January 25, 2018. Individual B receives a
				  Certificate of Receipt in the amount of $5,000. On April 1, 2019, Individual B
				  files a 2018 U.S. Form 1040 with Schedule A Itemized Deductions. Individual B
				  includes $1,250 (25% of the qualified contribution) under Gifts to Charity on
				  Schedule A. Individual B is not entitled to claim any Invest in Kids tax credit
				  on Individual B's 2018 Form IL-1040, Schedule 1299-C.
EXAMPLE 3: Corporation C contributes $1 million to an
				  approved scholarship granting organization on January 5, 2018. Corporation C
				  receives a Certificate of Receipt in the amount of $1 million. On October 15,
				  2019, Corporation C files a 2018 U.S. Form 1120 and excludes the $1 million
				  from the charitable contributions line of the return. Corporation C is entitled
				  to claim an Invest in Kids tax credit in the amount of $750,000 on Corporation
				  C's 2018 Form IL-1120, Schedule 1299-D.
EXAMPLE 4: Corporation D contributes $5 million to an
				  approved scholarship granting organization on January 5, 2018. Corporation D
				  receives a Certificate of Receipt in the amount of $1,333,333 (the maximum
				  qualified contribution). On October 15, 2019, Corporation D files a 2018 U.S.
				  Form 1120 and includes $3,666,667 ($5 million less the maximum qualified
				  contribution) on the charitable contributions line of the return. Corporation D
				  is entitled to claim an Invest in Kids tax credit in the amount of $1 million
				  on Corporation D's 2018 Form IL-1120, Schedule 1299-D.