Illinois Gives Tax Credit: How Chicago Donors Can Save on State Taxes in 2025–2026
For the Chicago professional, impact is everything. We give to our local foundations not just for the tax break, but to see our city thrive. However, for the 2025 and 2026 tax years, the State of Illinois has introduced a powerful new incentive that many high-net-worth individuals are completely overlooking: The Illinois Gives Tax Credit. This Illinois Gives Tax Credit is especially valuable for Chicago professionals and high-income households who expect to owe Illinois state income tax in 2025 or 2026.
What is it?
The Illinois Give Act provides a 25% state income tax credit for donations made to permanent endowment funds at “Qualified Community Foundations” (QCFs) within Illinois.
Why this is different from a standard deduction:
A standard charitable deduction only lowers your taxable income. A tax credit reduces your tax bill dollar-for-dollar.
- The Math: If you donate $40,000 to a qualified endowment, you could receive a $10,000 direct credit against your Illinois state taxes.
Who Qualifies for the Illinois Gives Tax Credit?
Eligible donors include Illinois residents and businesses who contribute to approved permanent endowment funds at Qualified Community Foundations and receive an approved Contribution Authorization Certificate before donating.
The “Catch” (and why you need to act fast):
This credit is first-come, first-served. The state has a limited annual cap of $5 million in total credits. Once that cap is hit, the credit is gone for the year. Furthermore, you cannot just write a check–you must apply for a Contribution Authorization Certificate (CAC) through MyTax Illinois before making the gift.
How Jacobwise & Co Helps:
Navigating the MyTax Illinois portal and ensuring a foundation is “Qualified” can be a bureaucratic headache. At Jacobwise & Co, we help our clients:
- Verify the eligibility of the chosen community foundation.
- Manage the application for the CAC to “lock in” your credit.
- Ensure the donation is documented correctly to survive any future state audit.
At Jacobwise & Co, we provide tax preparation, bookkeeping, and advisory services for individuals and small businesses across multiple states. Our approach focuses on clarity, compliance, and proactive planning so clients can make confident financial decisions year-round.
Book an appointment with our team →book.jacobwiseco.com
For more information, please visit our Chicago page.