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Frequently Asked Questions
FREQUENTLY ASKED QUESTIONS FROM DONORS
Q. Are stocks, bonds, or donated professional services eligible contributions?
A. Eligible Contributions:
- Cash,
- Publicly-traded stocks and bonds (starting January 1, 2001),
- Materials, equipment, or property specifically used for the YOP project, and
- Wages paid to youth in an approved internship/apprenticeship/employment project.
Ineligible Contributions:
- Labor and professional services,
- Contributions to pay for fund raising activities, and
- Used clothing.
Q. Which taxes can YOP tax credits be used to offset?
A. The tax credits can be used to offset state income tax due pursuant to:
- RSMo chapter 143- individual state income tax, excluding withholding tax imposed by sections 143.191 to 143.265;
- RSMo chapter 147-corporate franchise tax;
- RSMo chapter 148-gross premium receipts tax of insurance companies and tax of banks and other financial institutions; or
- RSMo chapter 153-gross receipts tax of express companies.
Q. How long does a donor have to submit the tax credit application into YOP before the donor must forfeit the tax credits?
A. Twelve months from the date of contribution (date on the check).
Q. What is the turnaround time for processing tax credit applications?
A. Approximately 2 weeks. However, depending on the volume received from December 1-April 15, the turnaround time may be slower.
Q. What is the process to use YOP tax credits on the donor's tax return?
A. The donor makes a contribution to an approved YOP project, submits Form CDTC-770 with the required documentation, and receives a certification from the Department of Economic Development. The taxpayer may then file their tax return at the end of their tax year, using the MO-TC form. The tax credits are applied to their total tax liability incurred for that tax period. For example, a contributor makes a $1,000 contribution to an approved YOP project:
- Total tax liability for tax year 20XX: $2,000
- Tax Credits: $500
- Adjusted tax liability $: $1,500
Q. How can the donor obtain the forms needed to claim the tax credits?
A. Form CDTC-770 Tax Credit Application can be obtained from the approved organization to which the donor made the contribution. To obtain the MO-TC form contact the Missouri Department of Revenue at 800-877-6881 or download it from their website at http://www.dor.mo.gov.
Q. Is there a maximum amount a donor can contribute for YOP tax credits?
A. Yes. A donor may receive no more than $200,000 in YOP tax credits in one tax year for contributions made to one or more YOP approved projects unless the projects are located in blighted or distressed areas of the state.
Q. If the donor does not have enough tax liability in the tax year the contribution is made, can the credits be used on subsequent tax returns?
A. Yes. The contributor has the tax year the contribution was given and five succeeding tax periods in which to use the credits.
Q. Are the tax credits sellable or transferable?
A. No.
FREQUENTLY ASKED QUESTIONS FROM PROJECTS
Q. What is the deadline for submitting a Youth Opportunities Program (YOP) application?
A. There is no deadline. Projects may apply when the organization has completed planning and are looking for resources to help carry out the project. However, tax credits are awarded quarterly until the $6,000,000 in credits are exhausted.
Q. How long does the application process take?
A. Approximately four to six weeks from date received by the YOP office.
Q. How do the tax credits work?
A. An approved YOP agency solicits donations from its community. The donors get 50% of their monetary contribution or 30% of their property contribution back in tax credits to offset their Missouri state tax liability. In essence, tax credits redirect the donor's tax dollars back into their own community.
Q. Can an organization apply for YOP tax credits, while administering another DED project (i.e. Neighborhood Assistance Program)?
A. Yes. However, the projects must be different in scope, in project outcomes, budget and/or in population served.
Q. Does an organization have to reapply every year to be approved for the same project?
A. Not necessarily. Service delivery projects have the option of a 12 or 24 month project period. Construction/Renovation projects have the option of a 24 or 36 month project period.
Q. How much in tax credits can an organization apply for?
A. The maximum amount of credits an eligible agency can apply for is $250,000 in tax credits per project, whether it is a 12, 24 or 36 month project. This is a $500,000 project budget.
Q. The organization's YOP project budget is $350,000. Does the organization need to get pledges?
A. Yes. Pledges are required for any project budget amount over $250,000. Therefore, a $350,000 budget would require $100,000 ($350,000-$250,000) in pledges from eligible YOP donors.
Q. YOP targets at-risk youth. What is YOP's definition of "at-risk"?
A. By statute, YOP gives preference to high crime and high poverty areas. Other factors to look at would be high teen pregnancy rates, high drop out rates, high absenteeism or low grades, etc.
Business and Community Services
301 W. High Street, Rooms 720, 770 Jefferson City, Missouri 65102
Tel: 1-866-647-3633 Fax: 1-573-751-7384 Email: missouridevelopment@ded.mo.gov
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