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Q. Why should I consider making a donation to the North Central Kansas Community Network Co., a 501(c)3 organization, in exchange for state tax credits whose effective value is 67.5%?
A. Most businesses and many households pay some form of state income tax every year to the Kansas Department of Revenue with the taxpayer having little control over just how that money is subsequently applied or invested. Donations in exchange for state tax credits gives the tax payer the alternative of redirecting some of their state tax obligation to North Central Kansas as a means of helping advance the economic growth of their home region.
Q: What is the minimum amount I or my company must contribute in order to participate in the initiative?
A: $ 250.00 is the minimum. There is no maximum limit.
Q: Who is eligible to access and utilize the credits?
A: Any person, business or organization obligated to pay Kansas state income tax.
Q: How do I or my company benefit from making the donation other than through the economic growth of North Central Kansas?
A: The best way of answering that is by example. Assuming you make a $1,000.00 donation to North Central Kansas Community Network, Inc., a 501(c)3, you automatically reduce your state tax obligation by $675.00. Then, if you itemize your deductions on your federal tax return, an additional amount may be recovered from the IRS specific to the charitable donation itself. The following table provides illustration.
Tax Bracket |
Actual Tax Credit |
Estimated Tax
Deduction on $1,000 |
Estimated Total Dollars
Recovered |
Estimated
Out-of-Pocket
(Expense) / Gain |
10% |
$ 675.00 |
$ 100.00 |
$ 775.00 |
($ 225.00) |
15% |
$ 675.00 |
$ 150.00 |
$ 825.00 |
($ 175.00) |
25% |
$ 675.00 |
$ 250.00 |
$ 925.00 |
$ 75.00 |
28% |
$ 675.00 |
$ 280.00 |
$ 955.00 |
$ 45.00 |
33% |
$ 675.00 |
$ 330.00 |
$ 1,005.00 |
$ 5.00 |
35% |
$ 675.00 |
$ 350.00 |
$ 1,025.00 |
$ 25.00 |
NOTE: It is important that all donors check with their personal financial planner or accountant to ensure they have the correct numbers. The table above is just an example of how things might work.
Q: Do the credits carry forward into the next tax year if the contributor's state tax obligation in the current year does not equal the amount of credits received?
A: No.These credits cannot be carried forward. However, the state will issue you a check for any portion of the acquired credits that go unneeded in the current tax year. For example, if you donate $1,000.00, you receive tax credits valued at $675.00. If your state tax obligation for the current year is $500.00, you are allowed to offset that obligation by $500.00 through use of the credits. The state will then issue you a $175.00 check so you recover the entire $675.00.
Q: How will the North Central Regional Planning Commission (NCRPC) use my donation to foster economic development in North Central Kansas?
A: First, you need to know the NCRPC is acting on behalf of nineteen counties in this initiative. Those counties are: Chase, Clay, Cloud, Dickinson, Ellsworth, Geary, Jewell, Lincoln, Lyon, Marshall, Mitchell, Morris, Ottawa, Pottawatomie, Republic, Riley, Saline, Wabaunsee and Washington. Our charge is to create a program that has regional impact and yet remains equally accessible to all. In order to do that the NCRPC will use any funds raised in one or more of the following ways:
Leadership Development Five percent (5.0%) of the monies will be devoted to leadership development. We will underwrite research and sponsor the cost of outside speakers if the focus and subject matter contributes to or improves the understanding of the regions dynamics.
Business Service Development One key to rural economic development is the creation of an environment that not only offers existing businesses access to new ideas and external markets, but also provides the services they need to take advantage of those opportunities. Twenty-five percent (25%) of the funds raised will therefore focus on this subject.
Technology Acquisition Also included in the above 25.0% is access to technology so often needed in today's business environment to enhance or maintain production capabilities or to improve the competitive advantage of the region's business community.
Job Creation / Retention Finally, a minimum of sixty percent (60%) of the funds will be used to underwrite the creation or retention of jobs in North Central Kansas. It is in this arena we will work most closely with the local economic development groups, looking to them to identify businesses of less than 100 employees that need equity investment or gap financing. Due diligence will be performed on all such requests with proper business plans being required before any investment or loan is made. Again, we are looking for businesses that have a positive impact on not only the local economy, but that of neighboring cities and counties as well.
Administration A maximum of ten percent (10%) of the funds raised will be used to cover all administrative and management expense.
For more information, please contact John Cyr at (785) 738-2218 or by e-mail jcyr@nckn.com. You can also visit the NCRPC's website at www.ncrpc.org to find more information on the subject as well as the forms needed to make a contribution.
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