LANSING – Over two decades, before they were ended beginning in 2012, state tax credits for donations made to community foundations, homeless shelters and food banks totaled $341 million, a report from the Department of Treasury shows.
In 2011, the last year the credits were applied, the credits for those donations to foundations, shelters and food banks totaled $23.75 million, the highest one-year total since the various credits were first permitted in the 1989 tax year.
The credits were permitted under both the individual income tax and the Single Business Tax and then later under the Michigan Business Tax.
When the MBT was scrapped in 2011 in favor of the Corporate Income Tax, virtually all tax credits were eliminated. Virtually all tax credits were eliminated as well for the individual income tax.
At the time, foundations and shelters worried that the loss of the credits would affect donations. The report does not look at donations made to various charitable groups, simply at the amounts of credits claimed over the year, and the number of returns that claimed the credits.
The first credits were to community foundations and were granted to both individual income tax and SBT filers. That first year, 6,300 income tax filers claimed $409,800 in credits, and 235 SBT filers received credits of $278,551.
Tax credits for homeless shelters and food banks were permitted by law in the 1992 tax year.
The credits were never claimed by more than a percentage of the total filers for either the income tax or the business taxes. Far more income tax filers claimed credits for the shelters and food banks than they did for community foundations. More business tax credits also went for donations to shelters and food banks, though many fewer business tax filers claimed the credits.
By the 2011 tax year, more in credits were claimed among income tax filers than any other year. Among income tax filers, 234,500 filers claimed credits worth $19.5 million in donations to homeless shelters and food banks. And 36,200 filers claimed $3.5 million worth credits to community foundations.
The most business filers claimed credits for community foundations in 2005 when 468 filers claimed $506,929 in credits. For shelters and food banks, it was in 2010 when 632 filers claimed $567,459 in credits.
In 2011, 273 businesses claimed $361,546 in foundation credits and 520 business filers claimed $504,299 in credits.
The report did show that in 2012, the first year the credits were ended, no funds were claimed.
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