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A
re you or your clients Kentucky residents who are char-
itably inclined? Is there a particular Kentucky-based
nonprofit organization that is close to the heart? The
Endow Kentucky Tax Credit presents a unique, tax-saving oppor-
tunity for gifts to endowments that provide everlasting support for
Kentucky nonprofits.
Through Endow Kentucky, Kentucky taxpayers (both busi-
nesses and individuals) may receive a state tax credit of up to
20% of their charitable gifts to permanent endowments held at
a qualified community foundation that are designated to benefit
Kentucky-based charities.
The Details
• The tax credit may total up to 20% of the value of the taxpay-
er’s endowment gift, up to a credit of $10,000 per individual
or $20,000 per married couple (reflecting endowment gifts of
up to $50,000 or $100,000, respectively).
• An application must be completed and submitted (see below)
for approval by the Department of Revenue.
• Only gifts made to endowments at qualified community foun-
dations are eligible.
• The community foundation’s endowment must be exclusively
designated to support a Kentucky-based nonprofit organi-
zation.
• The 2016-2017 tax credit opportunit y will begin on
July 1, 2016.
• Tax credits totaling $1,000,000 are available for the fiscal year
ending on June 30, 2017, or until the credits are exhausted.
(Note: These tax credits may be depleted well before June 30.
In fact, during the last two years, when $500,000 in tax cred-
its were available, the tax credits were exhausted in the first
week.)
• Any approved tax credit not used by the taxpayer during a
particular taxable year may be carried forward for use in a
subsequent year, for a period of up to five years.
The Benefit for Donors
The Endow Kentucky Tax Credit presents a highly tax-advan-
tageous opportunity for philanthropic individuals and families.
Unlike a tax deduction, a tax credit is taken off the tax bill dol-
lar-for-dollar. At the same time, these gifts also qualify for both
federal and state tax deductions, allowing donors to make gen-
erous contributions without the full out-of-pocket expense.
Additionally, taxpayers who make gifts of appreciated stock, or
who leverage the Charitable IRA Rollover, may reap additional
tax benefits.
Most importantly, the tax credit helps donors make a perma-
nent gift that will provide continuous support to the Kentucky
organizations about which they care most. This may help them
reach their charitable goals and advance their ambitions for leav-
ing a philanthropic legacy.
By Suzanne M. Rohlfs
Endow Kentucky
A Generous Charitable Tax Credit
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May 2016 CBA REPORT
Feature Article
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