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Community Investment Tax Credit Program
Downtown Frederick Partnership participates in the Community Investment Tax Credit Program (CITC), which offers State tax credits to Maryland businesses that contribute to nonprofit organizations that are working to address critical needs in the State’s communities. Through the program, businesses that make a donation to qualified nonprofit organizations receive a valuable State tax credit.
Click here for a printable PDF flyer describing the program.
How does the program work?
Nonprofit organizations apply for tax credit allocations competitively awarded by the Maryland Department of Housing and Community Development. Downtown Frederick Partnership has sold all available 2005 tax credits (valued at $30,000) and recently was awarded a second allocation of tax credits (valued at $60,000) that now are available to the Maryland business community.
Business entities that donate directly to nonprofits receive tax credits equal to 50 percent of the value of the donation. These tax credits may be claimed in addition to State and Federal deductions for charitable contributions, which may make the net cost of a contribution 27 cents or less for each dollar contributed.
A business must start using the credits against taxes owed for the year in which the contribution is made. If the credits exceed the taxes owed, the excess credits may be carried over for up to five years following the tax year in which the contribution was made. Credits may not be used retroactively against taxes owed for years prior to the year in which the contribution is made.
Downtown Frederick Partnership is utilizing the tax credits to fund a Facade Improvement Project. This Project provides matching funds to assist with painting and other facade improvements to buildings located along Market Street in Downtown Frederick.
What businesses are eligible for the program?
Any entity conducting business or operating a trade in Maryland is eligible. Eligibility includes S corporations, partnerships, sole proprietorships, limited liability corporations, corporations, public utility companies, insurance companies and financial institutions.
How does my business participate?
- Contact Kara Norman, Downtown Frederick Partnership Executive Director, at
301-698-8118 or karanorman@downtownfrederick.org
- Complete a one page form & provide the contribution check
Sample Summary* |
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Initial business contribution |
$10,000 |
MD tax savings (assumes 7% tax rate) |
(700) |
Federal tax savings (assumes 39% tax rate) |
(1,677) |
CITC award (50% of contribution) |
(5,000) |
Net cash outlay by donor |
$2,623 |
*Notes: Tax rates shown are for illustrative purposes only. Actual rates will vary based on each business’ particular income and legal structure. Provided by MD DHCD.
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