Tax Credits

In some cases, donors are eligible to receive a state tax credit, which is different than a tax deduction and received in addition to any applicable charitable deductions. A tax deduction reduces your taxable income, so the value depends on your income tax bracket. A tax credit lowers your state tax bill dollar for dollar, no matter your tax bracket.

Kentucky and West Virginia each have tax credit programs, but the details of the programs are quite distinct.

Kentucky

The Endow Kentucky tax credit enables a Kentucky tax payer to receive a credit of 20% of their gift to an endowed fund at a certified community foundation.  Gifts may be in the form of cash or appreciated stock.

Tax Credit Example: You make a gift of $5,000 to an endowment fund at the Foundation.  You may apply a $1,000 credit (20% of $5,000) directly to your Kentucky tax bill.  If your tax bill is less than $1,000, you may carry forward any unused portion of the credit for up to five years

This credit is limited to $10,000 per taxpayer (for a $50,000 contribution), and Kentucky has allocated only $500,000 in credits.  The credits become available on July 1, and they are available until they run out.

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West Virginia

The Neighborhood Investment Program (NIP) was established by the West Virginia Legislature to encourage giving to non-profit organizations that are serving distressed neighborhoods, low-income families, and other needy individuals in West Virginia.  These tax credits are apportioned to the Foundation annually, and we are able to distribute the tax credit vouchers to businesses and individuals who make qualifying gifts.  Donors using the NIP program may receive a 50% tax credit for their gift.

Tax Credit Example: You make a gift of $5,000 to a qualified fund at the Foundation.  You may apply a $2,500 credit (50% of $5,000) directly to your West Virginia tax bill.  If your tax bill is less than $2,500, you may carry forward any unused portion of the credit for up to five years

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