Enterprise Zone Tax Credit and Children’s Hospital Colorado
AMOUNT IN $
$150,000
$100,000
25% EZ CREDIT 4.63% STATE TAXES 35% FEDERAL TAXES
35% FEDERAL TAXES
The case for Children’s Hospital Colorado is a strong one. Who among us wouldn’t want to play a role in helping children live long, healthy lives? Through gifts to research at Children’s Hospital Colorado, donors can make an immediate difference while advancing the state of pediatric healthcare.
Example: Your are in the 35% Federal tax bracket and decide to make $50,000 a qualifying contribution of $10,000 to research at Children’s NET COST NET COST Colorado. Your tax benefit may be calculated as follows: $60,370 $60,370 $0
Physicians and researchers at Children’s Colorado are responsible for numerous nationally and internationally recognized milestones in research. Their discoveries have been translated into improved diagnostics and treatments that allow us to provide cutting-edge therapies to our patients and share these advances with the world.
Federal tax deduction benefit (35%) State tax deduction benefit (4.63%) Tax benefit, regular contribution Plus: Enterprise Zone Tax Credit Total tax benefits
WHAT IS THE ENTERPRISE ZONE TAX CREDIT? The state of Colorado provides an incentive to encourage job creation in certain areas of the state known as “Enterprise Zones.” Children’s Colorado on the Anschutz Medical Campus is part of one of these zones. As a result, our donors are eligible to receive a generous state income tax credit when they make qualifying gifts to research at Children’s Colorado. WHAT KIND OF GIFTS QUALIFY FOR THE TAX CREDIT? Gifts of $10,000 and higher toward research at Children’s Colorado currently qualify for the Enterprise Zone Tax Credit. TAX BENEFIT DETAILS Qualifying contributions entitle the donor to a 25% state income tax credit. This is over and above the normal tax benefits of a charitable contribution. A tax credit is money that you may use to directly offset any state tax expense you would have otherwise paid, on a one to one, dollar per dollar basis.
$10,000 $100,000 $3,500 gift 463 3,963 2,500 $6,463
Net cost to donor
$3,537
TA X SAVINGS $7,000 $6,000 AMOUNT IN $
There are already so many reasons to give to Children’s Colorado. Now, there is yet another one: the Enterprise Zone Tax Credit. This substantial tax credit is available for Colorado residents who support research at Children’s Hospital Colorado.
Gift Amount
$5,000 $4,000 $3,000 $2,000 $1,000 $0 WITHOUT EZ CREDIT WITH EZ CREDIT
Limitations: 1) Cash contributions qualify for the full 25% Enterprise Zone Tax Credit. Gifts of stock qualify for 12.5% credit. 2) The amount of credit taken in one year cannot exceed the donor’s state tax liability. Excess credit may be carried forward to offset subsequent years’ tax liability for up to five years. 3) The maximum credit a donor can claim per tax year is $100,000. At a 25% credit rate, this translates into $400,000 in total qualifying cash gifts for each year. 4) The availability of the Enterprise Zone Tax Credit is subject to change at any time. There is no guarantee it will continue to be available. 5) To qualify, the donation must be a minimum of $10,000 and must be made to Children’s Hospital Colorado Foundation. 6) Additional restrictions or qualifications may apply.
$170,681 gift
With EZ Credit
20000 10000 0 Tax Savings
A LARGER GIFT AT NO EXTRA COST
State Tax Benefit Federal Tax Benefit Net Cost
Gift Amount State tax benefit Federal tax benefit Plus: Enterprise Zone Tax Credit Net Cost
$100,000 4,630 35,000
$150,000
$60,370
AMOUNT IN $
Gift Amount
$170,681 7,903 59,738 42,670 $60,370
25% EZ CREDIT 4.63% STATE TAXES
$100,000
35% FEDERAL TAXES
$50,000 $0
The Enterprise Zone Tax Credit can help you stretch to make an even larger gift than you might have thought possible. In the two examples shown here (see chart), the net cost to you is the same but, with the Enterprise Zone Tax Credit, the actual benefit to children is 71% larger.
35% FEDERAL TAXES
NET COST $60,370
NET COST $60,370
$100,000 gift
$170,681 gift
Answers to Frequently Asked Questions
Q: Are there situations where I might not realize the full
Q: Do I need to be at a certain income level to use the credit?
Q: Are Federal taxes affected by taking the credit? A: No. The deductibility of the contribution at the Federal tax level is not impacted by your charitable Enterprise Zone Tax Credit, which is a credit against Colorado state income taxes.
benefit of the 25% credit? TAtax X advisor SAVINGS A: Your will help you determine the extent to which you may take advantage of this opportunity. For $7,000 most people, claiming this credit is easy and straightforward. $6,000
AMOUNT IN $
A: You must have Colorado state tax liability to claim the credit. There is no minimum income amount required, but the credit may only be used to offset your Colorado State tax liability. If you cannot use the entire credit on your 2012 state tax return, you may carry the credit forward for up to five years.
$5,000 Q: If I support an event with a $10,000 gift, will I qualify for
the credit? $4,000 A: No, $3,000 payments where you receive any tangible benefit (tickets to an event, dinner, etc.) in return for the payment $2,000 are not eligible. Only direct contributions from which $1,000 you receive no benefit will be considered as qualifying Enterprise Zone contributions. $0 WITHOUT EZ CREDIT WITH EZ CREDIT
The information represented in this document is of a general nature and should not be construed as legal, accounting or tax advice. This material may not be applicable, or suitable, to the reader’s specific circumstances and could require the consideration of other tax and non-tax factors. Prospective donors should always consult an appropriate tax advisor prior to taking any action based on this information.
Anschutz Medical Campus • 13123 E. 16th Avenue, Box 045 • Aurora, CO 80045 • 720.777.1700 • www.childrenscoloradofoundation.org