Public Service Announcement: Can't Afford Not To

If ever there was a year when we could all use $1200 dollars worth of bang for $240 worth of buck, this is it. Maybe everyone else knows about it already, but I didn't get it until a few years ago. There are three Michigan Tax Credits that get us off our asses to make charitable donations in the categories the State has anointed with 50% rebates. And, since a charitable donation also reduces our taxable income, each $400 donation toward our lovely state ends up actually costing only about $80. This year it seems particularly important since food pantries' budgets (indeed almost all non-profit funds) have dropped precipitously while the need is multiplying like grains of sand. 

The tax credit categories (more detail on pg. 15) are the: 

- Homeless Shelter/Food Bank Credit
- Public Contribution Credit (for Michigan Public Radio, Educational Institution, Art, etc.)
- Community Foundation Credit (need their 2-digit code from pg. 44)

In each category there is a 50% credit for donations up to $400 per jointly filing couple ($200 for single). That translates to a credit of up to $200 on a joint return ($100 for single).  So, for each $400 we donate (usually online - it's so easy) to Food Gatherers, The Arb, and a rotating list of Community Foundations ($1200 in total donations), our actual outlay of cash is around $80 in each category. About $240 total.  That's less than a Nintendo Wii. 

I adore my hometown, but for the past few years of donating it has seemed that Community Foundations in places like Ypsilanti, Flint, or Marquette could use the love a bit more than Ann Arbor.  Perhaps this year it will be Edmore, Michigan for my great-grandparents.  Or Detroit, for their community gardens and youth programs. 

Every year this seems confusing, but every year I look it up and make sure we donate because, as the State in its wisdom intended, this happens to be what gets us to open our wallets in these particular categories. Not that we're waiting, but it appears that the charitable donation deadline to be included in the 2008 return has been extended to April 15, 2009. 

From Senate Bill 652 - 4.14.08

Public Contribution Credit
The (Michigan Tax) Act allows a taxpayer to credit against  the income tax imposed for a tax year an amount, subject to applicable limits, equal to 50% of the aggregate amount of charitable contributions the taxpayer made during the tax year to any of the following: 

- The State, pursuant to the Art in Public Places Act, of artwork created by the taxpayer. 
- The State Art in Public Places Fund. 
- A municipality, of artwork created by the taxpayer. 
- A municipality or a nonprofit corporation affiliated with a municipality and an art institute, of money or artwork, for the purpose of benefiting an art institute in the municipality. 
- A public library. 
- A public broadcast station that is not affiliated with an institution of higher education. 
- An institution of higher education located within the State. 
- The Michigan Colleges Foundation. 
- The State Museum. 
- The Department of State for the preservation of the State Archives. 
- A nonprofit corporation, fund, foundation, trust, or association organized and operated exclusively for the benefit of institutions of higher education located within the State. 

Community Foundation and Homeless Shelter/Food Bank Credit

Also, subject to applicable limits, a taxpayer may credit against the income tax 50% of the amount the taxpayer contributes during the tax year to an endowment fund of a community foundation or 50% of the cash amount the taxpayer contributes during the tax year to a shelter for homeless people, food kitchen, food bank, or other entity whose primary purpose is to provide overnight accommodation, food, or meals to people who are indigent, if a contribution to the entity is deductible for the donor under the Internal Revenue Code. 

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