When a donor makes a donation to an organization that is set up for Child Care, Enterprise Zone or Homeless Contribution Income Tax (HCTC) state tax credits, ColoradoGives.org handles issuing the tax receipt to donors to substantiate the donor’s federal charitable tax deduction.
Government websites for info on tax benefits for donors: HCTC | Child Care | Enterprise Zone
You as the nonprofit are responsible for determining the extent to which a donation designated for you through the website is eligible for the applicable enterprise zone, child care, or child care tax credit. You are responsible for issuing the required tax credit document(s) to any donor who has designated a gift to you. If you have any questions, please consult the local agency responsible for overseeing these tax credits.
Reminder: Contributions made with e-cards may not be eligible for a state tax credit. Your donation report has a Payment Method field you can reference to see what the donor used to make the donation.
How do I indicate donations to my nonprofit are eligible for Colorado State Tax Credits?
When you are logged in to your account, go to your Organization Page. At the bottom you will see your Organization Data. Here you click on Tax Credits to add or modify information related to additional state tax credits that you offer.
For each of the tax credits, you have the opportunity to inform the donor if there is a minimum gift amount (and, if there is, specify what the one time or cumulative minimum gift amounts are) and note any other qualifying factors or instructions. To have this information show to the donor, click the toggle to "enable tax credit".
This means the information you entered will display and donors can see specific language that will appear on the tax receipt letting them know their donation may qualify for a Colorado state tax credit. Each organization determines the extent to which donations are eligible, and each organization is responsible for issuing the appropriate state tax documents. Donors are directed to contact each organization directly with any Colorado tax credit questions. If you have any questions, please consult the local agency responsible for overseeing these tax credits.
Turning OFF the display of additional State Tax Credits
To turn off the display of additional tax credits, just toggle off the "enable tax credit" and click save. All your information is retained but hidden from donors. If you offer tax credits and run out of credits, it is your responsibility to turn off this feature.
What is communicated to the donor about Colorado State Tax Credits?
1. The information you enter in your Organization Data section of the profile displays to the donor when "enable tax credit" is turned on.
2. When a donation is made, the donation receipt sent to the donor includes the following information (see example below):
Nonprofit Admin Notification for Donations with Tax Credit:
1. Organizational Administrators receive an email when a donation is made. You will see a call out in the email that ACTION IS NEEDED and it notes that: "Since your organization qualifies for one or more Colorado state tax credits, your organization is required to provide this donor with any associated tax documentation for ALL eligible donations. Contributions made with e-cards may not be eligible for a state tax credit. If you have any questions, please consult the local agency responsible for overseeing these tax credits."
You need to:
- Please review each donation you receive to see if it is eligible for a state tax credit
- Please contact the donor to find out if they are interested in the tax credit and provide them with the necessary state tax credit forms/documents.
2. In your downloadable Donation Report there are three (3) columns - EZ Tax Credit, Child Care Credit, and Homeless Tax Credit. If you have state tax credits enabled on the site, you see a Yes in the appropriate column for each donation record.
Are there ways for donors to tell an NPO if they explicitly want their donation to be considered for a state tax credit?
Yes, there are a couple of solutions you may want to try.
1. You can set up a Designation that appears in the checkout flow. For example: "Enterprise Zone Tax Credit Program," "Child Care Tax Credit Program," or "Homeless Tax Credit Program."
2. You can choose to add a pre-built custom question to your donation form. Go to Donation Form and Add a section. You will see an option for Tax Credit: Donor Interest. The following statement will appear to all donors making a donation to your organization; "I would like my donation considered for a Colorado Enterprise Zone, Child Care, or Homeless tax Credit"