Habitat for Humanity offers donors tax credit
Contributions above $20 qualify
Habitat for Humanity of Montezuma County has been approved as an Enterprise Zone Contribution Project by the Region 9 Economic Development District.
The designation allows all donor contributions above $250 or more to become eligible for a 25 percent state tax credit on cash donations, and a 12.5 percent state tax credit on physical donations and professional services.
Sales center manager Lynn Anderson explains the program offers an incentive for businesses and residents to donate to the local Habitat for Humanity store, 6786 Highway 160/491.
“This income tax credit is subtracted directly from the bottom line of the tax bill, so it is like a ‘thank you’ to our donors,” she said, adding that it is simpler than a deduction.
Donated services and/or markdowns are available for the state tax credit as well. For example, a mechanic who does $1,000 worth of work for Habitat but only charges $500 would be eligible for the 12.5 percent tax credit on the deducted amount.
“Other examples could be legal or real-estate services,” Anderson said. “Or straight cash gets a bigger 25 percent tax credit.”
There is some paperwork to fill out, and donors are responsible for defending the value of donating items if they are audited. If there is more than one donation, they are itemized on a list and added together for a total value amount above the $250 minimum.
“The list is sent to the state with the tax ID number, and then the credit is given on the next quarterly tax bill,” Anderson said.
Habitat works to build and repair simple, decent, affordable houses in partnership with eligible families and volunteers from all backgrounds.
Centers like the one south of Cortez take donations of household items for resale, with the proceeds going towards funding for a new home for a needy family.
The Montezuma County sales center has raised $30,000 in the seven months since opening, Anderson said.
“It is purely from donated products that we sold. The response from the community has been great,” she said. “The main goal is to raise money for our first house.”
The funds go toward building a family a new home or refurbishing an older one.
“The board is leaning toward fixing up a vacant home,” Anderson said. “Not only would it provide a home for someone, but it improves the neighborhood as well. Whether it is a new build or a remodel, we’re excited to move forward with the best opportunity.”
There are 31 Habitat home projects in Southwest Colorado. In 1986, the Colorado Legislature approved the Enterprise Tax Credit program to assist economically distressed areas. In Southwest Colorado, all of Montezuma, Archuleta, San Juan and Dolores counties are designated enterprise zone areas. La Plata county has some areas that are not considered distressed, and are not included.