Community Service Contribution Credit
For taxable years beginning after Dec. 31, 1993 and before Jan. 1, 1999, any business firm which makes a cash contribution to an approved community service organization is allowed a credit against their tax liability. For taxable years beginning after Dec. 31, 1998, any business firm which makes a contribution to an approved community service organization is allowed a credit against their tax liability. For taxable years beginning after Dec. 31, 2000, the definition of business firm has been expanded to include individuals subject to the state income tax.
The provider of the community services must be approved by the director of community development of the Kansas Department of Commerce. You may download a list of the approved community service organizations.
The credit is 50 percent of the contribution(s) made during the taxable year.
If the approved community service organization is located in a rural community (population of 15,000 or less), the credit is 70 percent of the contribution(s) made during the taxable year.
Any unused credit may be carried forward until the total amount is used for all taxable years beginning after December 31, 1993 and before Jan. 1, 1999. Effective for all taxable years beginning after Dec. 31, 1998, the amount of credit which exceeds the tax liability shall be refunded to the taxpayer (except in the case of a transfer).
Transfer of Credit
For taxable years beginning after Dec. 31, 1998, any business firm not subject to Kansas income or privilege tax may sell, assign, convey or transfer tax credits earned under the Kansas Community Services Program Act. For taxable years commencing after December 31, 2000, the credit sold, assigned, conveyed or transferred shall be in an amount not less than 50 percent of the value of the credit. A business firm which acquires the earned credits (assignee), may use the amount of the credits to offset up to 100 percent of its income or privilege tax liability for the taxable year in which the acquisition was made. Only the full credit amount for any one contribution may be transferred and the credit may be transferred one time. Unused credit amounts claimed by the assignee may be carried forward for up to five years, except that all such amounts shall be claimed within 10 years following the tax year in which the contribution is made.
Procedures to Claim the Credit
You may download Schedule K-60 to claim the community service contribution credit. This schedule must be completed and submitted with the income or privilege tax return. You may also call the Department of Revenue voice mail system at 785-296-4937 to request Schedule K-60. You will be asked to give your name, address, phone number and form(s) you desire. Please allow two weeks for delivery of your forms.
Contribution shall mean and include the donation of cash, services or property other than used clothing. Effective for taxable years commencing after Dec. 31, 2000, the contribution shall be in an amount or value of $250 or more. Stocks and bonds contributed shall be valued at the stock market price on the date of transfer. Services contributed shall be valued at the standard billing rate for not-for-profit clients. Personal property items contributed shall be valued at the lesser of its fair market value or cost to the donor and may be inclusive of costs incurred in making the contribution, but shall not include sales tax. Contributions of real estate are allowable for credit only when title thereto is in fee simple absolute and is clear of any encumbrances. The amount of credit allowable shall be based on the lesser of two current independent appraisals conducted by state licensed appraisers.
Business firm means:
- any business entity authorized to do business in the state of Kansas which is subject to the state income tax imposed by the provisions of the Kansas income tax act;
- any national banking association, state bank, trust company or savings and loan association paying an annual tax on its net income pursuant to article 11 of chapter 79 of the Kansas Statutes Annotated; or
- effective for all taxable years commencing after Dec. 31, 2000, any individual subject to the state income tax imposed by the provisions of the Kansas income tax act.
A community services organization performs community services in Kansas and which:
- obtains a ruling from the internal revenue service as a 501(c)(3) organization; or
- incorporates in the State of Kansas or another state as a nonstock nonprofit corporation; or
- is designated as a community development corporation by the US government under the provisions of title VII of the economic opportunity act of 1964; or
- is chartered by the US Congress.
Community services means:
- the conduct of activities which meet a demonstrated community need and which are designed to achieve improved educational and social services for Kansas children and their families, and which are coordinated with communities including, but not limited to, social and human services organizations that address the causes of poverty through programs and services that assist low income persons in the areas of employment, food, housing, emergency assistance and health care;
- crime prevention; and
- health care services.
Crime prevention is any nongovernmental activity which aids in the prevention of crime.
Health care services shall include:
- services provided by local health departments; city, county or district hospitals; city or county nursing homes; or other residential institutions;
- preventive health care services offered by a community service organization, including immunizations; prenatal care; and home health care services which enable postponement of entry into nursing homes; and
- community-based services, including services for persons with a disability; mental health services; indigent health care; physician or health care worker recruitment; health education; emergency medical services; services provided by rural health clinics; integration of health care services; home health services; and services provided by rural health networks.
A rural community is:
- any city having a population of fewer than 15,000 located in a county that is not part of a standard metropolitan statistical area as defined by the United States department of commerce or its successor agency;
- any city having a population of fewer than 15,000 located in a county defined as a standard metropolitan statistical area, if a substantial number of persons in the county derive their income from agriculture; and
- any city in a county defined as a standard metropolitan statistical area which is the only city in its county that has a population that exceeds 15,000.