A new state tax credit program for Illinois Donors.

The Community Foundation for McHenry County is excited to announce the Illinois Gives Tax Credit Act which incentivizes up to $100 million in new charitable giving over the next five years by authorizing a 25% state income tax credit for charitable donations to eligible permanent endowments held by dozens of qualified community foundations across Illinois. The program began on January 1, 2025. The Community Foundation for McHenry County looks forward to working with donors who would like to participate in this new tax credit.

What is the official name of the legislation?
Illinois Gives Tax Credit Act
HB4951/Public Act 103-0592, Article 170

What does it do?
Provides a 25% State of Illinois charitable income tax credit to donors who contribute to a permanent endowed fund at a qualified community foundation in Illinois. The Community Foundation for McHenry County is qualified to accept gifts.

Who qualifies as a donor?
Illinois taxpayers, including individual and joint filers along with businesses.

Do I have to be an Illinois resident?
No, as long as you pay Illinois income tax.

What is an eligible gift?
A donation to a permanent endowed fund at a qualified Illinois community foundation.

What is a permanently endowed fund?
A permanently endowed fund is a fund in which the principal is kept intact and only a certain amount of earnings are available to grant to charitable organizations. Endowments are a powerful tool to support long-term sustainability and can also be a very meaningful way for individuals and organizations to secure their legacy.

Are donor advised funds eligible endowments?
No.

Can a donor create a new endowed fund at The Community Foundation to be the recipient of these eligible gifts?
Yes. A donor can choose to donate to an existing endowment or create a new endowed fund.

Can I donate to directly support the work of The Community Foundation?
Yes. We have several existing funds available that support our work and we would be happy to discuss these with you.

Are there limits or caps on the credit?
Yes. Tax credits shall be awarded on a first come first serve basis. The Illinois Department of Revenue can issue up to $5 million in tax credits per calendar year and $1.25 million of those credits are reserved for gifts of $25,000 or less. The program will sunset after 5 years (at the end of 2029) unless it is extended beyond that date by the IL General Assembly.

Can these endowed funds benefit charities outside of Illinois?
No. Each endowed fund that receives gifts eligible under this Act must award grants to charities for their operations and programming that occur within the State of Illinois.

Are all charitable gifts to any charitable organization eligible for this tax credit?
No. Only gifts to permanent endowments at qualified community foundations are eligible for the state tax credit (until we reach the statewide cap of $5M). Donor-advised funds are not eligible.