COMMUNITY INVESTMENT TAX CREDITS (CITC) support 501(c)(3) nonprofit
organizations by awarding allocations of State tax credits to use as incentives
for business contributions.
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New Beginnings received tax credits to raise funds to support activities that focus on
social skills, character building and academics for at-risk youth and their parents.
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As part of a competitive application process, 501(c)(3) nonprofit organizations
apply to the Maryland Department of Housing and Community Development for tax
credit allocations.
Nonprofit organizations utilize the tax credits as incentives for businesses to
donate money, goods or real property to support operational and programmatic
costs associated with specific, approved projects delivering services to
communities across Maryland.
These tax credits are in addition to the deductions on both Federal and State
taxes as a result of the charitable contribution. Based on the income and tax
structure of the individual business, the net cost of the donation could be as
low as $0.27 for every $1.00 contributed.
Businesses must use the tax credits against taxes owed for the year in which
the contribution was made and may not be used retroactively for taxes from a
prior year. Any business contemplating making a donation is encouraged to
consult with their accountant or tax professional for information about their
specific tax benefits.
Over the past ten years, the Community Investment Tax Credit Program has
leveraged almost $19.8 million in charitable contributions for 296 nonprofit
projects.
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WHO CAN APPLY
Nonprofit organizations designated a 501(c)(3) organization by the IRS are
eligible to apply for CITCs for a project or activity that is either located in
or serving a community in a Priority Funding Area. Community Investment Tax Credits
are awarded annually through a competitive application process. Nonprofits
applying for CITC must maintain "good standing" with the
Maryland Department of Assessment and Taxation, as well as, maintain
their charitable organization status with the Office of the Secretary of State Charitable Organization
Division for the duration of the project.
Training is mandatory for those who have either never applied to the Community Investment Tax Credit Program before or for those who
have never applied electronically. Anyone wishing to attend the training as a refresher course is welcome to attend.
Click here to Register.
Sample Application (PDF)
Note: This application is for reference only. Applications must be submitted
electronically and only after attending the application training.
Once awarded tax credits, nonprofit organizations are required to
submit a semi-annual report (PDF)
(MS WORD)
detailing:
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Project activity
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Use of tax credits/contributions received
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Description of how the organization is marketing the tax credits
In an effort to assist nonprofits with a marketing strategy, DHCD Catalyst
offers a “How to Market Tax Credits” workshop prior to each funding round.
Nonprofits should consider using Community Investment Tax Credits to complement
other State funding programs which offer resources to assist
communities with revitalization efforts.
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ELIGIBLE PROJECTS & DIRECTORY OF
CURRENT PROJECTS
Projects must be located in or serve residents of a Priority Funding Area and typically involve activities
such as:
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Education and Youth Services
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Housing and Community Development
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Job and Self-Sufficiency Training
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Enhancing Neighborhoods and Business Districts
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Arts, Culture and Historic Preservation
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Economic Development and Tourism Promotion
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Technical Assistance and Capacity Building
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Services for At-Risk Populations
CITC 2007 Directory of Projects(PDF)
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Sandtown Habitat’s tax credits are raising contributions to
construct homes for purchase by low and very low-income
families in the Sandtown-Winchester neighborhood of
Baltimore City. |
Contributions of money, goods or real property worth $500 or more
are eligible for Tax Credits.
Contributions of services or labor are not eligible for tax credits. Businesses
may claim a maximum of $250,000 in tax credits per year, representing $500,000
in contributions.
Any entity that conducts a trade or business in the State and is subject to:
the State income tax on individuals or corporations; the public service company
franchise tax or the insurance premiums tax can make a contribution. These
types of entities generally include corporations, public utility companies,
insurance companies, financial institutions, S corporations, partnerships, sole
proprietorships and limited liability corporations.
Businesses making donations are required to
complete a simple one-page form(PDF)
(MSWORD) and
submit it to the nonprofit organization receiving the contribution, along with
documentation of the value of the contribution. Businesses that wish to donate
real property must contact the Maryland Department of Housing and Community
Development/Community Investment Tax Credit Program for approval prior to
making the donation.
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Businesses that make charitable contributions benefit by:
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Reducing their Maryland tax liability
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Helping a local nonprofit organization achieve an essential community goal
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Making a targeted community impact
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Improving community relations and increasing their visibility
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USEFUL LINKS
The following documents and links may be useful to both businesses making
contributions as well as nonprofit participants with the Community Investment
Tax Credit Program. This information is for reference only and any business
contemplating making a donation, that has questions about their specific tax
advantages, is encouraged to consult with their accountant or tax professional:
FOR MORE INFORMATION
Dayna Harris
Project Manager
410-514-7241
1-800-756-0119, Ext: 7281
Or Email
harrisd@mdhousing.org
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Pyramid Atlantic used tax credits to raise matching
funds for a National Endowment for the Arts grant
to support visiting artists working with Maryland high school students and teachers.
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