What is Endow Kentucky Tax Credit Program?
Authorized by the general assembly in 2010, the Endow Kentucky Tax Credit Program offers taxpayers an opportunity to help their community and receive a tax credit toward their Kentucky Income Tax! For a contribution to endowed permanent funds at a qualified community foundation, a taxpayer may receive a 20% tax credit up to $10,000 per donor per taxable year.
What was the Catalyst for the Legislation?
The purpose of the legislation is to spur the development and growth of philanthropy, particularly in underserved, rural parts of the Commonwealth. The Transfer of Wealth study that was published in 2010 that revealed the following:
“Over the next 50 years, Kentuckians will likely transfer $707 billion to the next generation. This intergenerational Transfer of Wealth offers an unprecedented opportunity to create a profound legacy – if we count our communities among our heirs.”
What does this mean for Henderson?
$3.725 Million Dollars in Yearly Grants.
Over the next 20 years, if the $1.49 billion Transfer of Wealth opportunity could be realized at just 5% ($74.5 million), a permanent yearly payout of $3.725 million could address economic and quality of life priorities in Henderson County.
What's the process for receiving the TAX CREDIT?
2 Simple Forms begin with the Application.
To apply, a Kentucky taxpayer must file an application for preliminary authorization of the tax credit with the Kentucky Department of Revenue. Instructions and an application for preliminary approval are available online at https://revenue.ky.gov/Business/Pages/Endow-Kentucky-Tax-Credit.aspx. For questions or more information about the Endow Kentucky Tax Credit, call Tony Watkins at the Community Foundation 270-442-8622 or the Department of Revenue at 502-564-8139.
To determine the impact of a tax credit, a donor should consult his/her financial advisor/consultant.
Donors, including individuals and corporations, who contribute to a permanent endowment fund at the Community Foundation of Henderson may be eligible for a 20% tax credit up to $10,000 per donor per taxable year. The credit may be taken against individual income tax, corporate income tax, and the limited liability entity tax, in addition to the federal charitable tax deduction value of the gift. This tax credit may be carried forward for up to five years. The tax credit benefit is in addition to the federal charitable tax deduction value of the gift.
How Should an Interested Donor Proceed?
The tax credit for donations to endowed charitable funds can be obtained by the following ways at the Community Foundation Henderson:
• Establish or add to an Endowed Charitable Fund such as a Donor Advised Endowment Fund
• Establish or add to an Endowed Scholarship Fund
• Establish or add to a designated endowment fund for a Kentucky Non-Profit that addresses the causes you care about most
• Donate to one of the Community Foundation’s existing Endowment Funds
The Endow Kentucky Tax Credit Program offers a very unique incentive to charitable giving. Combined with the benefits of your charitable tax deduction, the tax credit ensures that your philanthropic dollars and tax benefits are maximized!