Understanding the Illinois Gives Tax Credit Act

Posted on March 25, 2026

The Illinois Gives Tax Credit Act aka Illinois Gives provides a state income tax credit for certain charitable contributions.

Individuals and businesses can make qualified contributions to qualifying permanent endowment funds that Qualified Community Foundations (QCFs) manage.[1]

What Is The Illinois Gives Credit?

Under Illinois Gives, an eligible contributor may receive an Illinois income tax credit equal to 25 percent of a qualified contribution to a permanent endowment fund held by a QCF.

For example, a $10,000 qualifying contribution generates a $2,500 Illinois income tax credit. Credits are available for tax years ending on or after December 31, 2025, and on or before December 31, 2029. At the state level, there is an annual statewide cap of $5 million of credits per calendar year.

To generate a credit, a contribution must be made to a permanent endowment fund that satisfies program requirements:

• The fund must be maintained in perpetuity so that only investment earnings may be used for grants, with the principal preserved.
• it must benefit Illinois residents or charitable projects located in Illinois.
• it must have a spending rate not exceeding 7 percent; and it cannot be a donor advised fund.
• The endowment fund must be held by a QCF that has been approved and registered with the Illinois Department of Revenue (IDOR) through MyTax Illinois before accepting Illinois Gives-eligible contributions.

For individual taxpayers, several limits apply:

• Each taxpayer may claim up to $100,000 of Illinois Gives credit per tax year.
• Married individuals filing a joint return are each treated as separate taxpayers for this purpose, allowing up to $200,000 of credit per joint return if each spouse has sufficient qualifying contributions.

At the foundation level, each QCF may be allocated up to $750,000 of credits per calendar year. In addition, 25 percent of the statewide annual credit allocation is reserved for “small gifts” of $25,000 or less, preserving capacity for smaller contributions even when large donations are present.

Obtaining The Illinois Gives Credit

The Illinois Gives credit is obtained through a specific authorization and certification process administered by IDOR. Beginning January 1, 2025, a prospective contributor must apply for a Contribution Authorization Certificate (CAC) through a MyTax Illinois account before making a qualifying contribution in most circumstances. The application identifies, among other items, the intended amount of the contribution and the QCF and permanent endowment fund that will receive it. If the statewide cap, the small-gift reservation, and the applicable QCF cap have not been exceeded, IDOR generally issues the CAC within three business days.

After receiving the CAC, the contributor must make the authorized contribution to the designated permanent endowment fund within ten business days and must provide the CAC to the QCF at the time of the contribution so the foundation can associate the payment with the authorization. The QCF then has thirty business days to confirm receipt of the contribution in MyTax Illinois. Once the contribution is confirmed, MyTax Illinois generates a Certificate of Receipt (COR) for the contributor. The COR serves as the official record necessary to claim the Illinois Gives credit on the Illinois income tax return for the year of contribution.

The program also permits a limited “after-the-fact” process. If a qualifying contribution is made before applying for a CAC, the contributor may request a CAC up to fifteen business days after the contribution date, provided that both the contribution and the CAC request occur within the same calendar year. Approval is not guaranteed in this circumstance; if the statewide or QCF-level caps have already been met, the CAC may be denied, and no credit will be available for that contribution.

Claiming The Illinois Gives Credit

A contributor claims the Illinois Gives credit on the Illinois income tax return for the tax year in which the qualifying contribution is made, referencing the COR issued through MyTax Illinois. The credit is non-refundable, i.e., it can reduce Illinois income tax liability to zero, but any excess credit for the year cannot generate a refund. Instead, any unused credit may be carried forward for up to five subsequent taxable years and carried-forward credits are applied to the earliest year with a liability first.

Federal Charitable Deduction Impact

At the federal level, charitable contribution deductions are governed by IRC § 170. Under that section and long-standing IRS guidance, a deduction is generally allowed only for the excess of the amount contributed over the value of any goods, services, or other benefits received in return, i.e., the “quid pro quo” principle.

In 2019, the IRS issued final regulations addressing contributions made to organizations described in IRC § 170(c) where the contributor receives or expects to receive a state or local tax credit. The regulations provide that the federal charitable contribution deduction under IRC § 170 must be reduced by the amount of any state or local tax credit received or expected to be received as a result of the contribution.[2] The state or local tax credit is treated as a return benefit, similar in concept to receiving goods or services, and thus reduces the net amount of the federal charitable contribution.

For Illinois Gives, this means that if an individual makes a qualifying contribution of $X and, in return, receives a 25 percent Illinois income tax credit, the federal charitable deduction under IRC § 170 is, in general, limited to 75 percent of the contribution amount, assuming the individual otherwise itemizes deductions and satisfies the applicable adjusted gross income limitations. The 25 percent credit is treated as the value of a benefit received and therefore is not part of the deductible charitable payment.

For example, assume a taxpayer in the 37 percent federal marginal tax bracket makes a $10,000 cash contribution and otherwise itemizes. If the donation is made directly to a qualifying charity (outside the Illinois Gives program), the taxpayer’s federal charitable deduction would be $10,000, producing a $3,700 federal income tax benefit (ignoring AGI-based percentage limitations and other applicable limitations). By contrast, if the same $10,000 contribution is made through Illinois Gives and generates a 25 percent Illinois income tax credit, the taxpayer receives a $2,500 Illinois tax benefit and, under the above federal rules, a reduced federal charitable deduction of $7,500. At a 37 percent rate, the federal tax benefit on that reduced deduction is $2,775, for a combined federal and state tax benefit of $5,275. In this simplified example, using Illinois Gives increases the taxpayer’s overall tax benefit by $1,575 compared to making the same $10,000 gift outside the program. On a $100,000 Illinois Gives contribution, the same mechanics would yield an additional $15,750 of combined tax benefit compared to a direct charitable gift.

Illinois Gives offers an opportunity to support long-term charitable endowments benefiting Illinois communities while receiving a state income tax credit. Illinois Gives contributions should be evaluated in the context of broader federal charitable planning, given that the Illinois credit both reduces Illinois income tax liability and, under federal quid pro quo rules, reduces the amount of the federal charitable deduction.

Consult with your Topel Forman advisor if you have any questions on the Illinois Gives tax credit. 

[1] For a current list of QCFs one can visit https://tax.illinois.gov/programs/illinoisgives/qcf.html and under the “Resources” section click on the link entitled “Approved Qualified Community Foundations and Annual Program Activity.” This was last confirmed and referenced on March 18, 2026.

[2] Because the Illinois credit is 25%, it is too large for the 15% de minimis exception in Treas. Reg. § 1.170A-1(h)(3)(vi).