House Bill 4126: Improvements to Tax Credit Scholarships
August 16, 2022
In 2022, Empower Illinois and Illinois’ tax credit scholarship community pursued legislation to improve Illinois’ Tax Credit Scholarship Program. This broad coalition of supporters and advocates helped advance House Bill 4126—the first-ever stand-alone bill on the Invest in Kids Act Tax Credit Scholarship Program in Illinois history.
In April 2022, House Bill (HB) 4126 passed unanimously. Even more remarkable, these changes unanimously passed the Illinois House 114-0 and the Illinois Senate 55-0, a near impossible feat. With 42 Democratic and 23 Republican bill sponsors, the legislation also continued the tradition of strong bipartisan support for education investments seen when the Invest in Kids Act passed originally in 2017.
HB4126 introduces two key changes to the Invest in Kids Act: year-over-year (YOY) Scholarship priority and partial scholarships. This bill was signed into law in June 2022, successfully adding these improvements to the Invest in Kids Act to provide greater education stability and increase scholarship access.
The first addition outlined in HB4126 is year-over-year scholarship priority. This means students who received a tax credit scholarship for the previous school year become first in-line for a scholarship in the next school year, so long as they remain eligible and submit their application before April 1. This improvement helps students remain in their best-fit school each year, providing stability and reliability that will help families make critical educational and financial decisions. Empower Illinois implemented a new application category for these students, Category 0, which was implemented as of July 6, 2022.
The second addition to the law is partial scholarships. This provision, which enables schools to offer partial scholarships to families in income tiers above 185% of the federal poverty level, expands the need-based, tiered scholarship distribution model, while also protecting scholarships for students in the lowest-income tier. Therefore, families who qualify for 100% scholarship will not be impacted and will continue to receive 100% aid. By offering the option of additional partial scholarships, more students could receive a scholarship, increasing the number of students who can attend their best-fit school. Partial scholarships, however, will not go into effect until 2023. More information on Empower Illinois’ implementation of partial scholarships will be provided later in 2022.
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