In recent weeks, Missouri Governor Mike Parson signed a number of bills into law, including one that will modify certain existing tax credits and create new tax credits to encourage donations to certain social service organizations.
The existing tax credits affected by the new legislation include:
- Champion for Children Tax Credit – this 50% tax credit is available to donors who contribute to qualified agencies such as CASA, child advocacy centers and crisis care centers. Under this new legislation, the definition of a child advocacy center has been expanded to include agencies that have a national affiliate or provide support to regional child assessment centers. In addition, the availability of this credit has been extended through 2025, and the total credit cap will increase to $1.5 million for years beginning on or after July 1, 2019.
- Maternity Home Tax Credit and Pregnancy Resource Center Tax Credit – these 50% tax credits are available to donors who contribute to maternity homes or pregnancy resource center that are qualified by the Missouri Department of Social Services. Under this new legislation, the availability of these credits has been extended through 2024, and the total credit cap will increase to $3.5 million for years beginning on or after July 1, 2019. Also, additional conditions to be a qualified maternity home were added such as providing no cost services to clients and not performing, inducing or referring clients for abortions.
- Food Pantry Tax Credit – this 50% tax credit is available to donors who donate cash or food supplies to qualified food pantries. This new legislation expands the credit to cover donations made to local soup kitchens and local homeless shelters as well as extends the availability of this credit through 2026.
In addition, as a result of the legislation, Missouri will now prohibit the sale, transfer or assignment of these credits.
Additionally, the legislation also created the following new tax credits:
- Diaper Banks Tax Credit – this 50% credit is available to donors who contribute to a “diaper bank.” A “diaper bank” is a not-for-profit organization who collects or purchases disposable diapers or other hygiene products for infants, children or incontinent adults and regularly distributes those products free to individuals through other entities such as schools, health care facilities, governmental agencies or other not-for-profits. This nontransferable credit is available through 2024. Credit may be claimed in fiscal years beginning after July 1, 2019.
- School Children’s Health, Hunger, and Hygiene Tax Credit – this 50% credit is available to donors who contribute to organizations that provide funding for school children’s unmet health, hunger and hygiene needs. This transferable credit is available through 2024. Credit may be claimed fox tax years beginning after January 1, 2019.
Informing donors and potential donors about these credits could result in increased contribution revenue. The rules on how to be sure donors to your organization qualify for the credits vary based on the type of credit. RubinBrown's Not-For-Profit Services Group professionals can assist in determining which of these credit programs may benefit your organization and how to register for the various programs.
Readers should not act upon information presented without individual professional consultation.
Any federal tax advice contained in this communication (including any attachments): (i) is intended for your use only; (ii) is based on the accuracy and completeness of the facts you have provided us; and (iii) may not be relied upon to avoid penalties.
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