Income Tax Credit For Endowment Contributions

The bill creates the 'Nonprofit Sustainability Act of 2018'. For income tax years commencing on or after January 1, 2019, but prior to January 1, 2022, the bill allows an individual taxpayer to claim an income tax credit for a contribution of money to an eligible endowment fund that is equal to 25% of the contribution. An 'eligible endowment fund' is defined in the bill as an endowment fund that is managed in accordance with the 'Uniform Prudent Management of Institutional Funds Act'.

A Colorado charitable organization that receives the donation is required to provide a credit certificate to the taxpayer, who must submit the certificate to the department of revenue along with his or her tax return. The maximum credit an individual may claim for an income tax year is $5,000. Unused credits are not refunded and may not be carried forward. A taxpayer may not claim the credit if he or she claims any other state income tax credit for the same charitable contribution. The department of revenue is required to track all the credits claimed in each income tax year and, when the total amount of credits claimed equals twelve million dollars per income tax year, is required to disallow all subsequent credits claimed in that income tax year.

(Note: This summary applies to this bill as introduced.)