Section 1050.100  Definitions

 

"Act" means the Illinois Gives Tax Credit Act [35 ILCS 60].

 

"Business entity" means a corporation (including a Subchapter S corporation), trust, estate, partnership, limited liability company, or sole proprietorship.

 

"Credit-eligible endowment gift" means an endowment gift for which a taxpayer intends to apply for an income tax credit under this Part.

 

"Department" means the Department of Revenue.

 

"Donor advised fund" has the meaning given to that term in subsection (d) of Section 4966 of the Internal Revenue Code of 1986.

 

"Endowment gift" means an irrevocable contribution to a permanent endowment fund held by a qualified community foundation.

 

"Permanent endowment fund" means a fund that (i) is held by a qualified community foundation, (ii) provides charitable grants exclusively for the benefit of residents of the State or charities and charitable projects located in the State, (iii) exists into perpetuity, (iv) has an annual spending rate based on the foundation spending policy, but not to exceed 7%, and (v) is not a donor advised fund.

 

"Qualified community foundation" means a community foundation or similar publicly supported organization described in Section 170(b)(1)(A)(vi) of the Internal Revenue Code of 1986 that is organized or operating in this State and that complies with the national standards for U.S. community foundations established by the Community Foundations National Standards, as determined by the Department.

 

"Taxpayer" means any individual or any business entity subject to the tax imposed under subsections (a) and (b) of Section 201 of the Illinois Income Tax Act. [35 ILCS 5]

 

Section 1050.150  Overview of Illinois Gives Tax Credit Act

 

The Act authorizes taxpayers, subject to specific limitations and requirements, to receive an income tax credit for qualified contributions made to a permanent endowment fund.  Taxpayers wishing to make qualified contributions must first apply to the Department for approval to make qualified contributions.  Once approved, taxpayers are issued contribution authorization certificates by the Department, which must be provided to the qualified community foundation by taxpayers when making their qualified contributions.  A qualified community foundation must apply to the Department for approval before it can issue certificates of receipt to taxpayers making qualified contributions.  Certificates of receipt issued to the taxpayer by a qualified community foundation may be used to document the tax credit claimed by the taxpayer on the income tax return for the taxable year in which the qualified contribution is made.

 

Section 1050.200  Tax Credit Awards

 

a)         For taxable years ending on or after December 31, 2025 and ending before January 1, 2030, the Department shall award, in accordance with this Act, income tax credits to taxpayers who provide an endowment gift to a permanent endowment fund during the taxable year and receive a certificate of receipt under Section 1050.350 for that gift. Subject to the limitations in this Section, the amount of the credit that may be awarded to a taxpayer by the Department under this Act is an amount equal to 25% of the endowment gift.

 

b)         The aggregate amount of all Illinois Gives tax credits awarded by the Department under this Act in any calendar year may not exceed $5,000,000.

 

c)         The aggregate amount of all Illinois Gives tax credits that the Department may award to any taxpayer under this Act in any calendar year may not exceed $100,000. Taxpayers filing a joint return may each receive a credit of up to $100,000. Corporations filing a combined return may not be awarded more than $100,000 in credits in the aggregate.

 

d)         The amount of contributions to any specific qualified community foundation that are eligible for Illinois Gives tax credits under this Section in any calendar year shall not exceed $3,000,000.

 

e)         Of the annual amount available for tax credits, 25% must be reserved for endowment gifts that do not exceed the small gift maximum set forth in this subsection. The small gift maximum is $25,000. For purposes of determining if a donation meets the small gift maximum, the amount of the contribution authorization certificate under Section 250 shall be used.

 

f)          For the purpose of this Section, a credit is considered to be awarded on the date the Department issues an approved contribution authorization certificate under Section 250. [35 ILCS 60/170-100]

 

Section 1050.250  Contribution Authorization Certificates

 

a)         The taxpayer shall apply to the Department using the electronic application form on the MyTax Illinois webpage for a contribution authorization certificate. A taxpayer who makes more than one credit-eligible endowment gift must make a separate application for each contribution authorization certificate. Applications under this subsection shall be reviewed by the Department and shall either be approved or denied. Each approved contribution authorization certificate shall be sent to the taxpayer within 3 business days after the certificate is approved. The Department shall maintain on its website a running total of:  (i) the total amount of credits remaining under this Act for which taxpayers may apply for a contribution authorization certificate issued in the calendar year; (ii) the total amount of credits allocated during the calendar year for each specific community foundation; and (iii) the total amount remaining for the calendar year under the small gift maximum set forth in Section 200. Those running totals shall be updated every business day.

 

b)         The taxpayer shall make the endowment gift to the permanent endowment fund either within 15 business days prior to or within 10 business days after the taxpayer receives the approved contribution authorization certificate under subsection (a). The qualified community foundation shall, within 30 business days after receipt of an endowment gift for which a contribution authorization certificate has been approved by the Department under subsection (a), issue to the taxpayer a written certificate of receipt as provided in Section 1050.350. No receipt shall be issued for amounts that are not actually received by the qualified community foundation within 10 business days after the taxpayer receives the approved contribution authorization certificate. [35 ILCS 60/170-15]

 

Section 1050.300  Approval to Issue Certificates of Receipt

 

a)         A qualified community foundation shall submit an application for approval to issue certificates of receipt. Each application shall be submitted electronically and shall be signed and verified by an officer or board member. Each application shall include:

 

1)         a copy of the letter issued by the Internal Revenue Service to the qualified community foundation that it has been granted an exemption from taxation under Section 501(c)(3) of the Internal Revenue Code;

 

2)         a copy of the certificate of accreditation from the Community Foundations National Standards Board or certification that the qualified community foundation meets the standards established by Community Foundations National Standards;

 

3)         certification that the qualified community foundation holds a permanent endowment fund meeting the criteria in Section 1050.100;

 

4)         a list of the names and addresses of all members of the governing board of the qualified community foundation;

 

5)         a copy of the most recent financial audit of the qualified community foundation's accounts and records conducted by an independent certified public accountant in accordance with auditing standards generally accepted in the United States, government auditing standards, and rules adopted by the Department;

 

6)         the primary email address to which notices and other documents provided for under the Act shall be sent; and

 

7)         the beginning and ending dates of the qualified community foundation's fiscal and taxable years.

 

b)         The Department shall review and either approve or deny each application to issue certificates of receipt. Applicants shall be notified of the Department's determination within 30 business days after the application is received. [35 ILCS 60/170-20(b)] Applications for renewal shall be made on an annual basis. If the application is denied, the Department will notify the qualified community foundation of the reason for the denial of the application. Any defects may be cured by submitting a new application.

 

1)         An applicant that has a certificate of accreditation from or is listed as an accredited community foundation on the website maintained by the Community Foundation National Standards Board will be deemed eligible for the program.

 

2)         An applicant that is not accredited by the Community Foundation National Standards Board will be considered to be in substantial compliance with the national standards if it is a tax-exempt, nonprofit, autonomous, nonsectarian philanthropic institution supported by the public with long-term goals of:

 

A)        Building permanent, component funds established by many separate donors to carry out their charitable interests;

 

B)        Supporting the broad-based charitable interests and benefitting the residents of a defined geographic area; and

 

C)        Serving in leadership roles on important community issues.

 

3)         An applicant that only operates an endowment fund designed to fund its own operations or programs is not eligible for the program because the fund does not benefit other organizations in the community.

 

4)         An applicant that issues grants to one particular religious sect or denomination, or to a particular charitable cause, such as a children's hospital or an institution of higher education, is not eligible for the program because the fund does not benefit a wide variety of charitable causes throughout this State.

 

Section 1050.350  Certificates of Receipt

 

a)         No qualified community foundation shall issue a certificate of receipt for any qualified contribution made by a taxpayer unless that qualified community foundation has been approved to issue certificates of receipt pursuant to Section 1050.300.

 

b)         No qualified community foundation shall issue a certificate of receipt for a contribution made by a taxpayer unless the taxpayer has been issued a contribution authorization certificate by the Department and the qualified community foundation has received a copy of the contribution authorization certificate.  The contribution must be made by the person whose name appears on the contribution authorization certificate.  If a check or credit card is used to make a contribution, the name that appears on the check or credit card must be the name of the person whose name appears on the contribution authorization certificate. If a contribution is made using stock or negotiable securities, the stock or negotiable securities must be in the name of, or held in the name of, the person whose name appears on the contribution authorization certificate.

 

EXAMPLE 1:  Individual A is the beneficiary of a trust. The trust obtains a contribution authorization certificate from the Department.  Individual A instructs the trust to make a contribution to a qualified community foundation in the amount of $1,000. The qualified community foundation must issue the certificate of receipt in the name of the trust.

 

EXAMPLE 2:  Individual A is the beneficiary of a trust. Individual A obtains a contribution authorization certificate from the Department. The trust makes a contribution to a qualified community foundation in the amount of $1,000. The qualified community foundation shall not issue a certificate of receipt to the trust because the contribution authorization certificate is in the name of Individual A. The qualified community foundation shall not issue the certificate of receipt to Individual A because the contribution was made by the trust. The individual must make the contribution to receive the certificate of receipt.

 

c)         If a taxpayer makes a contribution to a qualified community foundation within the timeframe by which the authorized contribution shall be made as provided in Section 1050.250, the qualified community foundation shall, within 30 business days after receipt of the contribution authorization certificate, issue to the taxpayer a written certificate of receipt.

 

d)         If a taxpayer fails to make all or a portion of a contribution within the timeframe by which such authorized contribution is required to be made, as provided in Section 1050.250, the taxpayer shall not be entitled to a certificate of receipt for that portion of the authorized contribution not made.

 

EXAMPLE:  A contribution authorization certificate in the amount of $1000 is issued by the Department to the taxpayer on April 1. The taxpayer has 10 business days from the date of the contribution authorization certificate to make the authorized contribution. On April 7, the taxpayer sends the contribution authorization certificate and a check in the amount of $500 to the qualified community foundation. The qualified community foundation receives the check on April 9. The qualified community foundation must provide a certificate of receipt to the taxpayer in the amount of $500 no later than May 21 (excluding weekends). On April 16, the taxpayer sends another check in the amount of $250 to the qualified community foundation. The qualified community foundation cannot issue the taxpayer a certificate of receipt for the $250 contribution because the payment was made more than 10 business days after the issuance of the contribution authorization certificate.

 

e)         Each certificate of receipt shall state:

 

1)         the name and address of the issuing qualified community foundation;

 

2)         the taxpayer's name and address;

 

3)         the taxpayer's identification number (SSN or FEIN);

 

4)         the date of each qualified contribution;

 

5)         the amount of each qualified contribution;

 

6)         the total qualified contribution amount; and

 

7)         the certificate number for the contribution authorization certificate provided to the qualified community foundation for the qualified contribution.

 

f)          Upon issuance of a certificate of receipt, the issuing qualified community foundation shall notify the Department within 10 business days that a certificate of receipts has been issued. The notification shall be made electronically and shall contain the following information:

 

1)         the taxpayer's name and address;

 

2)         the taxpayer's identification number (SSN or FEIN);

 

3)         the date of the issuance of a certificate of receipt;

 

4)         the date and amount of each qualified contribution;

 

5)         the total qualified contribution listed on such certificates;

 

6)         the issuing qualified community foundation's name and address; and

 

7)         the certificate number for the contribution authorization certificate provided to the qualified community foundation for the qualified contribution.

 

g)         Any portion of a contribution that a taxpayer fails to make by the date indicated on the contribution authorization certificate shall no longer be deducted from the cap prescribed in Section 170-10 [35 ILCS 60/170-25] (See Section 1050.200.) The Department will restore the amounts previously deducted after the last date has passed by which the qualified community foundation must notify the Department of the issuance of a certificate of receipt for any given contribution authorization certificate.

 

h)         Taxpayers may make, and qualified community foundations may receive, contributions in the form of cash, real property, stocks, and negotiable securities.

 

1)         If a contribution consists of real property, it must be accompanied by an appraisal performed by a licensed real estate appraiser within 60 days prior to making the contribution. The qualified community foundation will issue a certificate of receipt in the amount of the appraisal or the contribution authorization certificate, whichever is less.

 

2)         If a qualified community foundation receives a contribution in stock or negotiable securities, the qualified community foundation will issue a certificate of receipt in an amount equal to the average price between the highest and lowest quoted selling prices on the date of delivery as provided in IRS Publication 561.

 

i)          If a taxpayer makes a contribution to a qualified community foundation using a credit card and the credit card company charges a processing fee, the qualified community foundation shall issue a certificate of receipt to the taxpayer in the amount of the contribution, irrespective of which party bears the burden of the processing fee.

 

j)          Without the consent of the taxpayer, a qualified community foundation may not disclose to any person the contents of a taxpayer's contribution authorization certificate, the amount of contributions made by the taxpayer, nor the contents of a certificate of receipt issued to the taxpayer.

 

k)         If a taxpayer rescinds a contribution, the qualified community foundation shall notify the Department within 10 business days, and the certificate of receipt shall be canceled.

 

Section 1050.400  Electronic Notice and Filing Requirements; Books and Records

 

a)         Unless otherwise provided, all applications, notices, filings, certificates, or other documents required by this Part to be submitted to or issued by the Department shall be made by electronic means.

 

b)         Permanent endowment funds and taxpayers shall maintain books and records under this Part and make them available upon request by the Department.

 

c)         Permanent endowment funds shall maintain their books and records for no less than three years. Taxpayers shall maintain their books and records in accordance with the Illinois Income Tax Act and regulations promulgated thereunder.

 

Section 1050.450  Annual Recertification; Revocation

 

a)         Each qualified community foundation that receives approval to issue certificates of receipt shall file an application for recertification on an annual basis. The application for recertification shall be in the form and manner prescribed in Section 1050.300 and shall include:

 

1)         certification that the qualified community foundation has complied with and continues to comply with the requirements of the Act; and

 

2)         a copy of the organization's current audited financial statements.

 

b)         The Department may revoke the approval of a qualified community foundation to issue certificates of receipt upon a finding that the organization has violated the Act or this Part.  These violations shall include any of the following:

 

1)         failure to meet the requirements of the Act;

 

2)         falsifying any information on the application to issue certificates of receipt;

 

3)         failure to maintain full and adequate records with respect to the receipt of qualified contributions;

 

4)         failure to supply these records to the Department;

 

5)         failure to provide notice to the Department of the issuance of certificates of receipt pursuant to Section 170-25 of the Act; or

 

6)         failure to provide notice to the Department that a contribution has been rescinded pursuant to subsection (k) of Section 1050.350.

 

c)         Within 5 business days after the determination to deny recertification or to revoke approval, the Department shall provide notice of the determination to the qualified community foundation and information regarding the process to request a hearing to appeal the determination. A qualified community foundation whose recertification was denied or approval revoked may, within 20 days after the notice of the determination, protest the Department's determination by making a written request for a hearing as provided in 86 Ill. Adm. Code 200.120. After receipt of the request for a hearing, the Department shall give notice to the qualified community foundation of the time and place fixed for the hearing, shall hold a hearing, and shall issue its final administrative decision to the qualified community foundation.  In the absence of a protest within 20 days, the Department's decision shall become final without any further determination being made or notice given.