The Community Investment Tax Credit (CITC) promotes partnerships between businesses and nonprofit organizations by allocating $1 million in Maryland tax credits to support projects serving communities in Priority Funding Areas.
CITC supports initiatives to revitalize older communities throughout the State through projects such as Community services, including child care and recreational services; Redevelopment assistance, supporting physical improvements to upgrade areas; Employment training and job placement services for individuals of limited income; Education and literacy training; and Community crime prevention.
CITC complements other State programs which offer resources to assist communities in their revitalization efforts.
How the Community Investment Tax Credit Program Works:
Tax credits are awarded annually by the Maryland Department of Housing and Community Development on a competitive basis to nonprofit organizations that sponsor community activities in Priority Funding Areas.
Nonprofit organizations must have IRS 501(c)(3) status to be eligible.
Nonprofit organizations market the tax credits to Maryland businesses in exchange for contributions of cash or goods to support the nonprofits’ approved projects. Maryland businesses may claim a State tax credit equal to 50 percent of their contributions. This credit is in addition to deductions for charitable contributions, which they may claim on their federal and State tax returns.
Approximately 200 nonprofit projects have been awarded tax credit allocations since the program was authorized in 1996. The applicant organizations competed for the allocations of credits, and those who were successful were able to demonstrate that their proposed projects were well conceived, consistent with public purpose, and needed in the target areas they served. They also were selected based on organizational capacity to carry out the projects and successfully market the tax credits.
Annually DHCD awards tax credits to projects described in applications which are submitted in early fall. Prospective applicants should monitor the DHCD web site for information about the date for pre-application training and the deadline for application submission.
Advantages of the Community Investment Tax Credit Program:
CITC tax credits of $1 million generate $2 million in private contributions to support worthy projects in priority funding areas (PFAs).
As noted above, any Maryland business may claim the tax credits in addition to State and Federal deductions for charitable contributions. Based on the income and tax structure of the business, the net cost of a contribution may be less than 27 cents for each dollar contributed.
CITC promotes and strengthens public-private partnerships essential to community revitalization. Experience in other states with similar programs demonstrates that, as a result of the tax credit, businesses establish long-term partnerships with nonprofits to revitalize neighborhoods.
For More Information About the Program:
Call 410-514-7280, 1-800-756-0119 x7280, email CITC@hdcd.state.md.us, or write:
Maryland Department of Housing and Community Development
Division of Neighborhood Revitalization
Community Investment Tax Credit
100 Community Place
Crownsville, MD 21032