This article was written by Laura Menge, Senior Philanthropic Advisor at Greater Cincinnati Foundation.
Generosity deserves some credit. Are you a Kentucky taxpayer who enjoys supporting Kentucky nonprofits? Are your clients? Is your company?
The Endow Kentucky Tax Credit presents a unique, highly tax-advantageous opportunity for charitable gifts to endowments that provide permanent support for nonprofit organizations in the Commonwealth.
Kentucky is one of only a few states that offer such a special tax incentive for charitable gifts. Individuals and businesses that pay Kentucky income taxes may receive a state tax credit of up to 20% of their donations to endowed funds held at a qualified community foundation for the benefit of any Kentucky-based 501(c)3 public charity, including schools and religious institutions. These endowment beneficiaries receive annual support from the community foundation in perpetuity, so families and companies make enduring gifts to their favorite organizations.
Quick Facts about Endow Kentucky
- Beginning July 1, $1 million of state tax credits will be available until exhausted – typically within one week
- Tax credits may be taken against individual income tax, corporate income tax and limited liability entity tax
- Tax credits may be carried forward for up to five years
- Tax credits for individuals may be up to $10,000 (for endowment gifts of up to $50,000); married couples filing jointly may receive tax credits of up to $20,000 (for endowment gifts of up to $100,000)
- There is no minimum gift amount
- The tax credit is in addition to federal and state tax deductions for qualified charitable gifts
- Gifts may be cash or stock
- Before the gift is made, a single-page application must first be filed with and approved by the Kentucky Department of Revenue. Applications, found at revenue.ky.gov, should be submitted July 1 – 7.
- Only gifts to endowments held at qualified community foundations are eligible
“As local business owners, we believe in investing in the future of Northern Kentucky. Endow Kentucky is a perfect way to provide long-term support for the charitable organizations making a difference in our community, while also receiving an added tax benefit. The philanthropic environment in our region is a central pillar to our long-term economic growth,” said Holly and Louis Mazzocca, owners of Mazzocca Bros. Furniture and Antiques in Newport. Holly is also President of Bartlett Wealth Management.
A qualified community foundation since 2011, Greater Cincinnati Foundation (GCF) has helped donors leverage this tax credit through gifts totaling $7 million to nearly 30 GCF endowments supporting Kentucky nonprofits. These endowed gifts provide a permanent stream of funding for these organizations and everlasting support for the people they serve.
“At GCF, our mission to inspire and amplify generosity, and the Endow Kentucky Tax Credit is a terrific tool for that. Because the tax-savings can be so high, we help donors make legacy contributions in the Northern Kentucky community that are significant to them,” said Laura Menge, Senior Philanthropic Advisor at GCF.
For more details on the Endow KY Tax Credit, visit www.gcfdn.org/endowky or contact Laura Menge, at 513-768-6170 or laura.menge@gcfdn.org.
