As noted earlier, the Illinois tax credit law is distinct from the Arizona or Pennsylvania laws because the Illinois law provides benefits to taxpayers for their own children’s school expenses.
Illinois’ law allows parents to claim a tax credit on tuition, books and lab fees at public, private and parochial schools. Taxpayers can annually claim a 25 percent credit on qualified educational expenses they incur over and above $250, up to a maximum of $500 per family.11 In order to claim the maximum credit of $500, parents would therefore have to spend $2,250 on qualified educational expenses. To claim a $100 credit, parents have to spend $650 on qualified educational expenses. Tax credits can be claimed for any full-time student enrolled in a K-12 school, who is a resident of Illinois and is under 21 years of age.12
While the Illinois law is written to potentially benefit taxpayers whose children attend public schools, a closer look reveals that, in practice, public school parents receive very little in the form of tax credits. Since only private schools charge tuition—which can be a significant expense—the tax credit serves primarily as a reward for Illinois parents with children in private schools. Indeed, the law’s inclusion of public schools may simply have served as the “spoonful of sugar” that helped “the medicine go down.”