Learn About Tax Credit

Originally signed into law December 29, 1988, the Michigan Community Foundation Tax Credit was designed to encourage individuals and businesses to build the permanent endowments of community foundations across the state.

The State of Michigan provides a state tax credit for gifts to certified community foundations in Michigan. Only contributions which are placed in a permanent endowment are eligible for the Michigan Community Foundation Tax Credit. Here’s the way it works for both individuals and corporations:

The law permits a taxpayer to reduce Michigan income tax or Michigan Business Tax liability by a credit of 50 percent of the amount contributed to a community foundation, subject to a maximum credit of:

• $100 for an individual filing singly (for a $200 donation)
• $200 for a married couple filing jointly (based on a $400 donation)
• $5,000, or 10 percent of tax liability before claiming any credits, whichever is less, for a resident estate or trust (based on a $ 10,000 gift);
• Tax credit is equal to the smaller of 50% of the amount contributed, 5% of the net MBT tax liability or $5,000.

Under the MBT the tax credit is not available to insurance companies or financial institutions.

Review the community foundation tax credit tables for individuals and businesses for specific examples. 

This credit is in addition to those available for donations to Michigan colleges and universities, public libraries, public broadcasting stations and homeless programs. Your donation continues to be deductible as a charitable gift for federal income tax purposes.

Not all organizations that call themselves community foundations qualify for the tax credit. Only those community foundations certified by the Michigan Department of the Treasury as qualifying for the tax credit are eligible.