Endow Kentucky Tax Credit

To Kentucky Residents:

For tax years 2011 and 2012, the Endow Kentucky Tax Credit allows taxpayers (individuals and businesses) to reduce their state tax bill by 20% of the value of certain charitable gifts (up to a maximum state tax credit of $10,000).  For example, a Kentucky resident who donates $50,000 to a qualified charity would receive a state tax credit of $10,000.  In addition to the $50k itemized deduction that could potentially be used to reduce federal taxes, the taxpayer could offset their Kentucky tax dollar for dollar by the amount of the credit.  If a taxpayer can not use the entire credit in one year, they will be allowed to carry forward the excess credit for up to five years.

• What can I gift? 
• Cash or appreciated stock
• Who are qualified recipients?
• Qualified community foundations.  For a list of Community Foundations certified by the Endow Kentucky Commission click here: http://dlg.ky.gov/Endow+Kentucky.htm.  One you may recognize is the Northern Kentucky Fund/Greater Cincinnati Foundation: www.gcfdn.org/CommunityLeadership/NorthernKentuckyFund.  Gifts must benefit Kentucky nonprofit organizations.
• When is the deadline?
• Applications must be submitted by June 30, 2012 to Kentucky’s Department of Revenue.  Gifts will be deductible in the year they are made.  Up to $500k of total credits will be granted on a first come, first serve basis.
• How do I make a gift?
• Taxpayers must apply with Kentucky’s Department of Revenue for preliminary approval of the intended gift.  Upon approval, the taxpayer has 30 days to make the gift.  10 days from the date of the gift, it must be reported as completed to the Department of Revenue.  They will issue a final state tax credit approval letter that should be given to your tax preparer.  We encourage anyone interested to contact us or the Community Foundation before beginning the process. 

For more information, please see the detailed sheet attached to this email.  Please feel free to contact us if you find this of interest or if you have any questions. 

Thank you,