DOR Finalizes CITC Regulations

DOR Finalizes CITC Regulations

July 2014

Recently, the Massachusetts Department of Revenue finalized its regulations for the Community Investment Tax Credit (CITC) program. These regulations define qualified donations (investments) to a Community Development Corporation or the Community Partnership Fund. The regulations also explain the benefits of the program and highlight some important key points for donors:

  • Donors can choose to donate directly to a CDC designated as a community partner (i.e., a CDC with tax credits to allocate to donors) or they can choose to donate to the Community Partnership Fund, for which the United Way of Massachusetts Bay provides administrative support.
  • Donors do not need to live in Massachusetts or have any Massachusetts income tax liability in order to make a donation and receive the tax credits. If a nonresident makes a qualified donation, he or she can file a MA nonresident tax return to claim the refund.
  • Nonprofits registered as 501c3 organizations may contribute to a community partner and receive a tax credit (if the organization has unrelated business income) or a refund.
  • Contributions to CDCs through a Donor-Advised Fund (DAF) are allowed. However, the tax credit or refund would be applied to the nonprofit or foundation administering the DAF, not the individual or family who established the DAF. The nonprofit or foundation managing the DAF can put the money back into the DAF, but cannot give it back to the individual or family that set up the account.

Please make sure you consult your tax advisor.

For more information on the CITC program, please visit MACDC's CITC website.