Community Investment Tax Credits support 501(c)(3) nonprofit organizations by awarding allocations of State tax credits for use as incentives to attract contributions from individuals and businesses to benefit local projects and services.
Community Investment Tax Credits complement other State funding programs which offer resources to assist communities with revitalization efforts. As part of an annual, competitive application process, 501(c)(3) nonprofit organizations apply to the Maryland Department of Housing and Community Development for tax credit allocations. The Community Investment Tax Credit program has leveraged nearly $27 million in charitable contributions to approximately 700 projects across the State.
Nonprofit organizations utilize the tax credits as incentives for individuals and 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.
Businesses and individuals that donate to qualified organization’s approved project(s) can earn tax credits equal to 50% of the value of the money, goods or real property contribution. These tax credits are in addition to the deductions on both Federal and State taxes as a result of the charitable contribution. Visit GIVE Maryland for information on specific projects and donate now to nonprofits that have available tax credits.
Individuals and businesses must use the tax credits against taxes owed for theyear in which the contribution was made and may not be used retroactively for taxes from a prior year. Any individual or business contemplating making a donation is encouraged to consult with their accountant or tax professional for information about their specific tax benefits.
Nonprofit organizations, designated a 501(c)(3) organization by the Internal Revenue Service, are eligible to apply for Community Investment Tax Credits to support a project or activity that is either located in or serving a community in a Priority Funding Area.
Organizations soliciting charitable contributions in Maryland are generally required to register with the Office of the Secretary of State as a charitable organization. Nonprofits must maintain their charitable registration status with the Office of the Secretary of State of Maryland. As well as, provide an official Certificate of Status from the Maryland Department of Assessment and Taxation.
Once awarded tax credits, nonprofit organizations are required to submit a Semi-Annual Report in January and July providing information on:
After the initial tax credit award has been made, an organization may make a request for an additional allocation of tax credits no more than twice during the time period of their award agreement. The Community Investment Tax Credits program reviews requests for additional allocations in February and August of each calendar year. Current awardees seeking additional tax credits must complete the Community Investment Tax Credits Request for Additional Allocation Form. For February consideration requests must be received by February 28 and for August consideration by August 31.
Individuals and businesses making donations are required to obtain from the nonprofit a Certification of Contribution Form, complete and submit it to the nonprofit organization receiving the contribution, along with documentation of the value of the contribution.
Individuals or businesses that wish to donate real property must contact the nonprofit and the Maryland Department of Housing and Community Development’s Community Investment Tax Credit Program for approval prior to making the donation.
Projects must be located in or serve residents of a Priority Funding Area.
Projects typically involve activities such as:
Visit GIVE Maryland for information on specific projects in your community funded by Community Investment Tax Credits and how you can donate to nonprofits that have available tax credits.
Contributions of money, goods or real property worth $500 or more are eligible for tax credits. Contributions of services or labor are not eligible. Individuals and businesses may claim a maximum of $250,000 in tax credits per year, representing $500,000 in contributions.
Individuals and businesses making donations are required to complete a simple two-page form and submit it to the nonprofit organization receiving the contribution, along with documentation of the value of the contribution. Individuals or businesses that wish to donate real property must contact the Maryland Department of Housing and Community Development’s Community Investment Tax Credit Program for approval prior to making the donation.
GIVE Maryland provides an opportunity for individual donors to connect directly with nonprofits that have available tax credits. Search by county for a nonprofit organization working in your community to give.
Businesses: 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. These types of entities generally include corporations, public utility companies, insurance companies, financial institutions, S corporations, partnerships, sole proprietorships and limited liability corporations.
Individuals: An individual is a natural person or fiduciary having personal tax liability in the State of Maryland.
The following information may be useful to both individuals and businesses making contributions, as well as nonprofit participants in the Community Investment Tax Credit program. This information is for reference only and any individual or business contemplating making a contribution, that has questions about their specific tax advantages, is encouraged to consult with their accountant or tax professional.
CONTACT: Karen Forbes
Community Access and Partnership