What is An Enterprise Zone?
In 1986, the Colorado legislature created enterprise zones as a way to assist businesses and non-profit organizations located in economically depressed areas throughout the state. This legislation makes it possible for the Good Neighbor Garage to offer its donors a 25% Colorado state income tax credit on cash contributions of $1,000 or more. Over the years, this program has proven to be of great value both to Good Neighbor Garage and its supporters.
The Process:
- Donors make a contribution by check ( or online), $1,000 minimum amount to $400,000 maximum amount.
- Donors must indicate Enterprise Zone on the memo line of the check OR make their donation on our Enterprise Zone donation page.
- Within 60 days, Good Neighbor Garage will send the donor the appropriate paperwork for tax purposes.
Program Benefits
- Decreases donor’s state tax liability through a 25% state tax credit for cash gifts and 12.5% for in-kind contributions such as stocks (there must be a state tax liability).
- Provides the opportunity for donors to help more people in need by decreasing the net cost of their contribution.
Increase the Tax Credit for In-Kind Contributions
Gift-In-Kind contributions of stocks or bonds are eligible for a tax credit of 12.5%. Qualified cash gifts made during the calendar year equal to 1/7th the combined amount of all qualifying in-kind donations will increase the tax credit value to the full 25%. To receive the full 25% tax credit for in-kind donations, the total amount of all qualifying cash gifts made to any Enterprise Zone charity must equal 1/7th of the combined value of all qualifying in-kind donations made to any EZ charity in that calendar year. A detailed explanation of these conditions can also be found on the Colorado Department of Revenue website at www.colorado.gov/revenue/tax.
Here is How you give and keep more:
There may be a substantial tax benefit for donations made to Good Neighbor Garage through the Enterprise Zone. The net after-tax benefit for a gift of $1,000 is $630. In this way a gift of $1,000 costs only $370 after taxes.
Enterprise Zone Example: The impact on income tax costs given the scenario of a contributor in the 33 percent federal tax bracket who gives a gift of $1,000:
Donation $1,000
Tax benefits of donation
Charitable Donation Deductions
- Colorado
5% ($50)
- Federal
33% ($330)
Combined Charitable Donation Deductions ($380)
Colorado State Enterprise Zone Tax Credit ($250)
Total Tax Benefits of Donation ($630)
Cost of Donation After Combined Tax Benefits
$370
The above example is for illustrative purposes only. Please consult your tax professional or CPA to relate this to your particular circumstances. Specific net after-tax benefit for the same gift will differ based on individual tax situations.