Hi There,

IL 529 plan accepts contributions from third party contributors like grandparents. In order to take deduction, you don't have to be account owner. therefore, anyone who contributes can take a deduction. 

In your case, grandparents should have invested directly to 529 plan instead of giving a gift check to parents. They can still claim deduction as far as there is no duplication of deduction! All you need is the 529 account number and $$ contributed.