The proposed bill seeks to amend the Income Tax Act of 1967 by adding a new section, Sec. 261, which introduces a tax credit for contributions made to endowment funds of community foundations. Starting from tax years beginning on or after January 1, 2026, taxpayers can claim a credit equal to 50% of their contributions, with specific maximum limits based on the taxpayer's status. For individual taxpayers, the maximum credit is capped at $100 for single filers and $200 for joint filers, while resident estates or trusts can claim up to 10% of their tax liability or $5,000, whichever is less. To qualify for the credit, taxpayers must obtain a gift acknowledgment from the community foundation.

Additionally, the bill stipulates that any credit exceeding the taxpayer's tax liability cannot be refunded. It also mandates that the Department of Treasury report the total amount of tax credits claimed under this section to relevant legislative committees annually. The bill defines a "community foundation" as an organization that meets specific certification requirements, including having at least $1,000,000 in assets, and must apply for certification by May 15 of the tax year in which the credit is claimed.

Statutes affected:
Substitute (S-1): 206.1, 206.847
Senate Introduced Bill: 206.1, 206.847
As Passed by the Senate: 206.1, 206.847