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Illinois Gives Tax Credit Act – Key Takeaways for 501(c)(3) Organizations

Written by Mike Dertz | Jul 3, 2025 7:00:00 AM

As of January 1, 2025, Illinois taxpayers can claim a 25% charitable income tax credit for gifts made to qualified community foundations' permanent endowments under the Illinois Gives Tax Credit Act.

With this new incentive, here are some key takeaways for organizations to be aware of:

What Is a Qualified Community Foundation (QCF)?

According to the Illinois Department of Revenue, “Qualified Community Foundations (QCFs) are non-profit organizations that receive qualified contributions from individuals and businesses and then use the funds to provide charitable grants for the benefit of residents of Illinois or charities and charitable projects located in Illinois.”

Note: A Qualified Community Foundation must be a 501(c)(3) tax-exempt organization and be approved by the Illinois Department of Revenue (IDOR) before accepting contributions eligible for tax credit under the Illinois Gives Tax Credit Program.

Once approved to be a QCF by the Illinois Department of Revenue, QCFs may begin accepting contributions to the permanent endowment fund eligible for the tax credit. Once the QCF confirms receipt of qualified contributions, a Certificate of Receipt (COR) will be issued to taxpayers, which can be used to claim an Illinois income tax credit (25% of the eligible contribution amount).

Eligibility of Permanent Endowment Funds

Any nonprofit can establish a permanent endowment by contacting their local community foundation. In order for a permanent endowment fund to qualify for the credit, the endowment funds must:

  1. Provide charitable grants exclusively for the benefit of Illinois residents or charities, and charitable projects in Illinois;
  2. Exist into perpetuity;
  3. Have an annual spending rate based on the foundation spending policy (not exceeding 7%); and
  4. Is not a donor advised fund.

How Can Organizations Register for Qualified Community Foundation (QCF) Status?

If your organization meets the requirements of a Qualified Community Foundation, but is not already approved as such by the Illinois Department of Revenue, applications must be submitted electronically at: mytax.illinois.gov

Requirements During the Application Process

If your organization is applying for Qualified Community Foundation status, there are several requirements that must be included in the online application:

  1. A copy of the letter issued by the Internal Revenue Service to the QCF that it has been granted an exemption from taxation under Section 501(c)(3) of the Internal Revenue Code;
  2. Certification that the QCF meets the qualifications under Section 170(b)(1)(A)(vi) and meets the standards established by Community Foundations National Standards;
  3. Certification that the QCF holds permanent endowment funds meeting the criteria in Section 1050.100;
  4. A list of the names and addresses of all members of the governing board of the QCF;
  5. The primary email address to which notices and other documents provided for under the Act shall be sent;
  6. The beginning and ending dates of the QCF's fiscal and taxable years; and
  7. A copy of the most recent financial audit of the QCF’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 IDOR.

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