Kentucky Tax Benefits for Endowments

Endow Kentucky – Tax Credit Program

$1,000,000 In Tax Credits Are Available July 1!

WHAT IS ENDOW KENTUCKY?

The Endow Kentucky Tax Credit Program offers you a unique opportunity to receive a state tax credit toward foundations. Endowment funds are for those who want to give today and long into the future. These funds are your Kentucky income tax after making a contribution to permanent endowment funds at qualified community held in perpetuity and produce an annual payout.

A total of $1,000,000 is available to taxpayers, individuals and corporations through the Endow Kentucky Tax Credit Program. You are eligible to receive up to a 20 percent income tax credit (not to exceed $10,000) per taxable year. A new allotment of tax credits is available on July 1 each year.

IMPACT OF THE TAX CREDIT

To determine the personal impact of receiving your tax credit, you should consult your financial advisor or accountant. Any tax credit that cannot be used in the current tax year may be carried forward for five years. This is a tax credit, not a deduction. A tax credit lowers your tax bill dollar for dollar regardless of your tax bracket.
GIVE AND YOU SHALL RECEIVE: Tax Bracket Examples

39.6% Tax Bracket

 Qualifying Donation (What Charity Gets)  $10,000.00  $   20,000.00  $   50,000.00
 Federal Deduction*  39.60%  $(3,960.00)  $   (7,920.00)  $(19,800.00)
 State Deduction* 6%  $    (600.00)  $   (1,200.00)  $   (3,000.00)
 Tax Credit* 20%  $(2,000.00)  $   (4,000.00)  $(10,000.00)
 Net Cost of Donation* (What It Costs You)  $   3,440.00  $     6,880.00  $(17,200.00)

28.0% Tax Bracket  

 Qualifying Donation (What Charity Gets)  $10,000.00  $   20,000.00  $   50,000.00
 Federal Deduction*  39.60%  $(3,960.00)  $   (5,600.00)  $(14,000.00)
 State Deduction* 6%  $    (600.00)  $   (1,200.00)  $   (3,000.00)
 Tax Credit* 20%  $(2,000.00)  $   (4,000.00)  $(10,000.00)
 Net Cost of Donation* (What It Costs You)  $   3,440.00  $     9,200.00  $   23,000.00

* Every individual’s tax situation is different. This illustration is to be viewed as a hypothetical example of a cash donation only and is in no way meant to provide tax, legal or financial advice. Please consult your financial advisor or accountant regarding your eligibility for charitable tax deductions and/or tax credits.
WHAT GIFTS QUALIFY FOR THE ENDOW KENTUCKY TAX CREDIT?

Gifts can be cash or appreciated assets and must be made to a qualified community foundation.
Gifts to non-endowed funds do not qualify for the Endow Kentucky Tax Credit.

The minimum contribution to open an endowed charitable fund is $10,000 for an individual and $2,500 for a nonprofit organization. The minimum to establish an endowed scholarship fund is $50,000.

APPLYING FOR THE ENDOW KENTUCKY TAX CREDIT

Applying for your Endow Kentucky Tax Credit is simple. Please use the following steps to ensure you
receive your Endow Kentucky Tax Credit.

ONE:  You must file an application for preliminary authorization of the tax credit with the
Department of Revenue (DOR). For additional information visit:
www.revenue.ky.gov/endowedkytaxcredit.htm or call 502.564.8139. We are also happy to
assist you with any questions you may have.

TWO:  After receiving the approved preliminary authorization form,please mail, fax or email a
copy to Blue Grass Community Foundation (859.243.0770) or Brian Dineen
(bdineen@bgcf.org). Please keep a copy for your records.

THREE:  Within 30 days of receiving the approval letter from the Department of Revenue, you must
make the contribution to an endowment fund at the Community Foundation.

FOUR:  Within 10 days of making the gift, Blue Grass Community Foundation will send proof of the
gift to the Department of Revenue by filing the Notice of Endow Kentucky Tax Credit and
Certification form. The Department of Revenue will then review the provided proof and
issue a letter of final approval.