Decatur, IL (WAND) – Illinois families could gain access to a new source of educational funding under a federal scholarship tax credit program set to begin Jan. 1, 2027, but only if Gov. JB Pritzker chooses to enroll the state.
The Federal Scholarship Tax Credit Program, signed into law last year, allows individual taxpayers to receive a dollar-for-dollar federal tax credit of up to $1,700 annually for donations made to qualified Scholarship Granting Organizations (SGOs). Those organizations then award scholarships that families can use for a variety of K-12 educational expenses, including tuition, tutoring, special education services, books, technology and other qualifying costs.
Supporters have said the program has often been described simply as a “school choice” initiative, but they argue its reach extends well beyond private school tuition.
“It serves nearly all children in K-12 education, regardless of where they go to school… public, private, religious or charter,” said Peter Murphy, vice president of the Invest in Education Foundation. “About 85% of students in the country are in public school, and they stand to be the largest beneficiaries of this type of program.”
Murphy said scholarships could help families pay for tutoring, specialized instruction, educational supplies and technology, giving students access to services that schools may not otherwise be able to provide.
“This is not about keeping a private school from closing or filling a budget gap in a public school district,” Murphy said. “It’s parent-directed education.”
Unlike many federal education programs, the scholarship tax credit requires each state to opt in before students can receive scholarships. While taxpayers nationwide may still make qualifying donations, families can only benefit if their governor authorizes participation.
Murphy said states that decline participation could see their residents’ tax-credit donations support students elsewhere.
“You’re shooting yourselves in the foot,” Murphy said. “You’re denying your children benefits, and other states’ children will get more from your taxpayers.”
According to the Invest in Education Foundation, participating states must identify qualified scholarship organizations before taxpayers can claim the federal credit. The scholarships are available to students in households earning up to 300% of their area’s median family income, and scholarship amounts are determined by the organizations administering the funds.
State Rep. Regan Deering, R-Decatur, is among Illinois lawmakers encouraging Pritzker to move forward.
“I’m a big supporter of the federal tax credit scholarship program and really encourage the governor, as I have already on multiple occasions, to opt the state of Illinois into the program,” Deering said. “It has a wonderful opportunity to benefit students who attend all kinds of educational settings, and it’s at no cost to Illinois.”
A former educator and owner of a tutoring company in Decatur, Deering said the program could expand educational opportunities for families across central Illinois.
“Any opportunity that our families may have to access these scholarship dollars that can be used for books, additional tutoring services, career technical education programming and additional resources, I think it’s a great opportunity,” she said.
Illinois has until the program takes effect in January 2027 to opt in, though federal guidance has encouraged states to make their decisions in advance so scholarship organizations can prepare for implementation.
Deering said she hopes Illinois does not miss the opportunity.
“It would be a real shame for donors from Illinois to give and then not be able to apply those dollars to our students right here in Illinois,” she said. “I think it’s a great opportunity for wide access across the state for those tax credit dollars.”
