How It Works

STEP 1
CDC/CDFI finds donor or investor.

STEP 2  The donor pledges an amount of money to the organization.

STEP 2
The donor pledges an amount of money to the organization.

STEP 3  CDC/CDFI reserves tax credit on a first come first serve basis.

STEP 3
CDC/CDFI reserves tax credit on a first come first serve basis.

STEP 4  The donor or investor makes contribution.

STEP 4
The donor or investor makes contribution.

STEP 5  The CDC/CDFI uses the donation for operations or programs in the community.

STEP 5
The CDC/CDFI uses the donation for operations or programs in the community.

STEP 6  The donor receives Tax Credit Certificate, 33% for all Equity Investments and 50% for all Cash Donations.

STEP 6
The donor receives Tax Credit Certificate,
33% for all Equity Investments and 50% for all Cash Donations.


Forms

2019 CD Tax Credit Usage


Eligible Organizations

Only contributions made to SC Department of Commerce certified Community Development Corporations (CDCs) and Community Development Financial Institutions (CDFIs) qualify for the tax credit. CDCs are non-profit community-based development organizations that are established to promote economic opportunities in low-wealth communities. CDFIs are non-profit community-based financial institutions that are established to provide responsible and affordable financial products, access to capital, and services that will promote economic growth in under-served neighborhoods and communities.


Reservation Process

  1. CD Tax Credits are reserved on a first come, first serve basis based on when Tax Credit Reservation Form is received.

  2. A Community Development Corporation (CDC) or Community Development Financial Institution (CDFI) must complete a Tax Credit Reservation Form and return it to SCACED, to check on the available tax credits.

    • Tax Credit Reservation Forms will be accepted starting August 12, 2019.

    • If rural, small organization, submit current operating budget with Tax Credit Reservation Form.

  3. The Tax Credit Reservation Form will be approved/denied by Dept. of Commerce based on investments made to-date and tax credits available.

  4. If approved, the appropriate tax credit amount will be set aside for 10 business days. This will allow the CDC/CDFI to acquire, and provide to SCACED, appropriate documentation of the investment along with a completed Contribution Certificate DC-06075. After 10 business days the application will be void and the tax credit value may be allocated elsewhere.

    • Contributions made on or after January 1, 2019 will be eligible for the CD Tax Credit.

  5. SCACED will review the Contribution Certificate and back-up documentation provided by the CDC/ CDFI. Once they are satisfied that the documentation is adequate, SCACED will submit the package to Commerce for approval.

  6. If approved, Commerce will execute the Contribution Certificate and return a copy to SCACED[1], to be distributed to both the taxpayer and the CDC/CDFI. The certificate certifies that the credit available to that taxpayer will not exceed the annual tax credit limitation, the 25% maximum allowable tax credits authorized by a single CDC/CDFI, and that the CDC/CDFI was certified at the time of investment.

  7. Commerce will also provide the Department of Revenue a copy of the fully executed Contribution Certificate.

  8. To receive the credit, the taxpayer shall claim the credit on their annual state income or premium tax return, using Form SC SCH.TC-14, and file with the Department of Revenue a fully executed copy of the Contribution Certificate DC-06075.

 

BACKGROUND & HISTORY     |     HOW IT WORKS     |     CERTIFIED CDCs & CDFIs     |     SC COMMERCE CERTIFICATION