Community Investment Tax Credits

Are you a resident of Maryland or a business that pays Maryland state taxes? If so, HIP can help you boost your charitable contribution by reducing your tax liability using Maryland’s Community Investment Tax Credit program!

HIP has received an allocation of Community Investment Tax Credits from the Maryland Department of Housing and Community Development to support its Rapid Rehousing and Housing Stability Programs for formerly homeless clients. Individuals and businesses that donate $500 or more, in $50 increments, to HIP are eligible to earn 50% of the value of their contribution in state tax credits. Community Investment Tax Credits are usable in addition to the federal and state tax deductions for charitable giving.

The combination of the tax credits and tax deductions significantly reduces the actual out of pocket spend per dollar donated which allows for larger donations and greater impact! The below table shows how HIP and businesses at various tax rates (not including any Maryland income tax deductions to which a donor may also be entitled) can benefit from Community Investment Tax Credits.

Moderate-Income               High-Income               Corporate

     Individuals                        Individuals               

Federal Tax Rate                     22%                                       35%                               21%

Donation to HIP                   $1,000                                  $1,000                            $1,000

Federal Tax

Deduction                             ($220)                                   ($350)                             ($210)

Tax Credit on

State Return                          ($500)                                   ($500)                             ($500)

Total Tax Benefit                  ($720)                                   ($850)                              ($710)

Net Out-of-Pocket

Cost                                       $280                                      $150                                $290

Eligible businesses include any entity that conducts a trade or business in Maryland and is subject to the state income tax, the public service company franchise tax, or the insurance premiums tax. These types of entities generally include corporations, public utility companies, insurance companies, financial institutions, S corporations, partnerships, sole proprietorships, and limited liability corporations.

Eligible individuals include residents of Maryland. Residents are defined as individuals who are living in Maryland on the last day of the taxable year, or individuals who live in Maryland for more than 6 months of the taxable year and are physically present in the state for 183 or more days during the taxable year.