Community Investment Tax Credits Program
Community Investment Tax Credits are currently available through Habitat for Humanity of Worcester County by awarding allocations of State tax credits for use as incentives to attract contributions towards our Jefferson St. Project.
The Community Investment Tax Credit program has leveraged nearly $27 million in charitable contributions to approximately 700 projects across the State.
Businesses and individuals that donate can qualify to 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. The tax credits are deducted directly from the taxes you owe. This program allows you to leverage your contribution to Habitat for Humanity by using the dollars you would have spent on your Maryland taxes to increase your contribution. You will effectively direct your tax dollars back home at a small out-of-pocket cost.
This program is the best charitable tax planning opportunity available to Maryland taxpayers. I’ve personally contributed myself this year . The math varies a little depending on your tax bracket and county of residence. A taxpayer in the highest tax brackets can almost get all their contribution back in tax benefits. Below is an example of a $1,500 donation for someone in the 25% federal bracket, it only really costs them $257.- Ryan Bergey, Bergey & Company
|MD Tax Deduction (7.9%)||$59|
|FED Tax Deduction (25%)||$187|
|MD Tax Credit||$750|
|Net Donation Amount||$504|
The example above is based on a $1,500 donation for those in the 25% tax bracket. Individuals and businesses must use the tax credits against taxes owed for the year in which the contribution is 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.
How to Qualify
Contributions of money, goods or real property worth $1000 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 credits per year, representing a contribution of no more than $500,000.
For any tax year, the sum of all credits, including any carryover credits, may not exceed the lesser of $250,000 or the total amount of tax otherwise payable by the individual and/or business for the tax year. Excess credits may be carried over for five (5) years.