Community Investment Tax Credit by MichaelChoate


									                                                                                      Pyramid atlantic, inc.

              Community Investment
                Tax Credit Program
              Sample Contribution Summary
                tax savings to donor
                                                      total tax                                                                                                           Tax Credit
contribution        maryland           federal         savings
                                                                                                                       Montgomery County

                                                                       Pyramid Atlantic used $15,250 in tax credits to raise matching
Cash                  $10,000          $10,000                         funds for a National Endowment for the Arts grant to support
                                                                       visiting artists working with Maryland high school students
Tax Rate*                  7%              39%                         and teachers.                                                                                      State Tax Credits for Maryland’s
Taxes Saved                                                                                                                                                               Community-Minded Businesses
 on donation          $   700          $ 1,677         $ 2,237                 sandtown Habitat for Humanity

                   benefits to donor

Initial cash gift by donor                              $10,000

Maryland tax savings achieved on donation                  (700)

Federal tax savings achieved on donation                 (1,677)

CITC awarded (Based on 50% of donation)                  (5,000)

Net cost to donor of contribution                      $ 2,623
                                                                                                                              Baltimore City
                                                                      Sandtown Habitat’s $50,000 in tax credits are raising contribu-
                                                                      tions to construct homes for purchase by low- and very low-
                                                                      income families in the Sandtown-Winchester neighborhood.
*Note: Tax rates shown are for illustrative purposes only. Actual
rates will vary based on each business’ particular income and       Maryland Department of Housing and Community Development
legal structure.                                                               Division of Neighborhood Revitalization
                                                                                  Community Investment Tax Credit
                                                                                         100 Community Place
                                                                                      Crownsville, Maryland 21032
                                                                         F 1-800-756-0119

                                                                                                                                                                                 Brought to you by the
                                                                                                                                                                               Maryland Department of
                                                                                                                                                                       Housing and Community Development
                                                                                                                                                                      Division of Neighborhood Revitalization
                                                                                                                                                   DHCD-NR 03.11.09

Revitalization at Work!                                             Martin O’Malley   Anthony G. Brown   Raymond A. Skinner   Clarence J. Snuggs
                                                                      Governor           Lt. Governor       Secretary          Deputy Secretary
     Community Investment Tax Credits support 501(c)(3) nonprofit organizations by awarding allocations of State tax
     credits to use as incentives for business contributions.
How does the program work?                                           new beginnings youtH center                                 Businesses that make charitable contributions
As part of a competitive application process,                                                                                    benefit by:
501(c)(3) nonprofit organizations apply to the                                                                                       n Reducing their Maryland tax liability
Maryland Department of Housing and Community                                                                                         n Helping a local nonprofit organization
Development for tax credit allocations. Nonprofit                                                                                      achieve an essential community goal
organizations utilize the tax credits as incentives
                                                                                                                                     n Making a targeted community impact
for businesses to donate money, goods or real
property to support operational and programmatic                                                                                     n Improving community relations and
costs associated with specific, approved projects                                                                                      increasing their visibility
delivering services to communities across Maryland.
                                                                                                                                 What types of contributions are eligible?
Businesses that donate to a qualified organization’s                                                                             Contributions of money, goods or real property
approved project can earn tax credits equal to 50                                                                                worth $500 or more. Contributions of services or
percent of the value of the money, goods or real                                                                                 labor are not eligible for tax credits. Businesses
                                                                                                             Dorchester County
property contribution. These tax credits are in            New Beginnings received $130,000 in tax credits which raised
                                                                                                                                 may claim a maximum of $250,000 in tax credits
addition to deductions on both Federal and State           funds to support activities that focus on social skills, character    per year, representing $500,000 in contributions.
taxes as a result of the charitable contribution.          building and academics for at-risk youth and their parents.
Based on the income and tax structure of the                                                                                     Businesses making donations are required to
individual business, the net cost of the donation                                                                                complete a simple one-page form and submit
                                                            n Job and Self-Sufficiency Training
could be as low as $0.27 for every $1.00 contributed.                                                                            it to the nonprofit organization receiving the
                                                            n Enhancing Neighborhoods and                                        contribution, along with documentation of the
                                                              Business Districts                                                 value of the contribution. Businesses that wish
Businesses must use the tax credits against taxes
owed for the year in which the contribution was             n Arts, Culture and Historic Preservation                            to donate real property must contact the
made and may not be used retroactively for taxes            n Economic Development and                                           Maryland Department of Housing and
from a prior year. Any business contemplating                 Tourism Promotion                                                  Community Development/Community
making a donation, that has questions about their           n Technical Assistance and Capacity Building                         Investment Tax Credit Program for approval
specific tax advantages, is encouraged to consult                                                                                prior to making the donation.
                                                            n Services for At-Risk Populations
with their accountant or tax professional.
                                                                                                                                 For more information contact:
                                                        What types of businesses are eligible for the                            Reginald Stanfield
What types of projects are eligible for
                                                        tax credits?                                                             Director
                                                        Any entity conducting a trade or business in the                         Community Investment Tax Credit
Over the past ten years, the Community Investment
                                                        State and is subject to: the State income tax on                         410-514-7209
Tax Credit Program has leveraged up to $19.8
                                                        individuals or corporations; the public service                
million in charitable contributions to 296 nonprofit
                                                        company franchise tax or the insurance premiums
projects. Projects must be located in or serve
                                                        tax. These types of entities generally include
residents of a Priority Funding Area and typically
                                                        corporations, public utility companies, insurance
involve activities such as:
                                                        companies, financial institutions, S corporations,
    n Education and Youth Services                      partnerships, sole proprietorships and limited
    n Housing and Community Development                 liability corporations.                                                  Revitalization at Work!

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