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Community Economic Development Fund News

Web Site: http://www.cedf.com
965 East Main Street, Meriden, CT 06450
Tel: (203) 235-2333 Fax: (203) 235-2913

CEDF serves Connecticut small business owners, primarily in the low-to-moderate income communities, who are not able to obtain traditional bank financing. We offer loans, business advice, education and more.

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CEDF Seeks Businesses for 2011 Connecticut Neighborhood Assistance Act (NAA) Program

September 29, 2011

Eligible entities can receive a credit of 60% of approved contributions. The minimum contribution on which a credit can be based is $250. Thanks to recent changes in NAA legislation, the maximum available credit has been increased from $75,000 to $150,000.

About the Program: The program provides a state tax credit to eligible business firms that make cash donations to qualifying not-for-profit community programs. CEDF has been approved to receive tax credits on up to $150,000 in donations received from one or multiple sources. The credit is equal to 60% of the amount donated. The minimum donation that a corporation can make to receive a tax credit is $250 (representing a $150 tax credit). The maximum contribution that a corporation can make to this program is $150,000 (or $90,000 in tax credits). The total charitable contribution from the business must equal or exceed its prior year's amount. There are also federal tax savings that accompany this program.

Eligible Businesses: C Corporations remain eligible to purchase NAA tax credits, however, the Connecticut General Assembly voted this year to make the NAA tax credit available to Subchapter S Corporations, LLCs, and LLPs.

Example: A charitable contribution to CEDF of $10,000, for example, results in a state tax credit worth $6,000 which in turn shelters the company from Connecticut tax on up to $80,000 of taxable income. The donor may also receive favorable federal tax savings as a result of the donation. On average, depending on your tax situation, this represents a 15% federal tax savings. Again, depending upon the specifics of your tax situation, the company may realize up to 75% or more of the donation in tax savings.

Summary: In summary, the cost to you of a $10,000 donation is on average $2,500.

This is a wonderful and cost-effective way for your business to support economic activities for the community while stimulating Connecticut's economy for the benefit of all.

Business firms wishing to make a cash contribution to CEDF in amounts between $250 and $150,000 should first contact CEDF to be included in the program. You will be asked to complete a one page simple form (Form NAA-02) to reserve the amount of the tax credit you anticipate using. This form needs to be returned to CEDF for forwarding to the Connecticut Department of Revenue Services. You cannot increase the amount of your tax credit after October 3, 2011. There is a legislative effort being made to extend this deadline.

This will reserve your tax credit. Since it may difficult to calculate your tax credit in September, you may defer the calculation of your actual tax credit and the donation until December. Should you get to the end of the year and find that your actual tax liability is less than anticipated, you may reduce the actual amount of your donation accordingly.

The actual donation must be received by CEDF no later than December 30, 2011 in order to be eligible for the tax credit.

Any interested business owners should contact Gregory Lewis at (860)918-2934 (including weekends) for immediate consideration.

Member News is provided as a service of the Midstate Chamber of Commerce and is also featured in the monthly "Chamber News" newsletter mailed to members.