Enterprise Zone

 

The purpose of the Enterprise Zone contribution tax credit is to encourage taxpayers to assist local enterprise zones that have been established by the state of Colorado. The state works with governmental and non-profit partners in these zones to implement economic development plans "directly related to job creation and job preservation." Among the agencies who can receive this credit are centersthat provide employment-related services.

There may be a substantial tax benefit for donations made to the Volunteers of America through the Enterprise Zone. The net after-tax benefit for a gift of $1,000 is $626. In this way a gift of $1,000 costs only $374 after taxes (see example on right). Specific net after-tax benefit for the same gift will differ based on individual tax situations.

The Process:

  • Donors make a contribution by check  $500 minimum amount to $400,000 maximum amount.
  • Donors must indicate Enterprise Zone on the memo line of the check OR select Enterprise Zone on the donation page before submitting.
  • Donors send check to Volunteers of America, 2660 Larimer Street, Denver, CO 80205.
  • Within 60 days, Volunteers of America sends the donor the appropriate paperwork for tax purposes.

Program Benefits:

  • Decreases donor's state tax liability through a 25% state tax credit for cash gifts and 12.5% for in-kind contributions such as stocks, vehicles, furniture, etc. (there must be a state tax liability).
  • Decreases the net cost of the contribution through potential federal pre-tax deductions and state tax credits.
  • Provides the opportunity to help more people in need by increasing the level of the gift. Donors are able to increase the level of their gift without increasing the cost of the gift.

For questions regarding Enterprise Zone please contact Clare at 303.297.0408

EXAMPLE:

The impact on income tax costs given the scenario of a contributor in the 33 percent federal tax bracket who gives a gift of $1,000:

Donation $1,000
CO State Income Tax Savings ($46)
State Tax Credit at 25% ($250)
Tax Deduction at 33% ($330)
Combination of Reduced Federal and State Tax Liability $626
After Tax Cost of Giving $374