Business Tax Tips: Donations to Resource and Referral Agencies

You have to pay taxes. You don’t want to pay taxes. Why not? Well despite not wanting to spend the money, you’d rather put those funds to a better source. Congrats! You’re in luck; you can pay your Louisiana state taxes and put the money to a good cause. Wham, social and business responsibility executed in one transaction.

So, here’s the deal. Louisiana allows for a business to contribute up to $5,000 to a Child Care Resource and Referral Agency (CCR&R) per year and it counts the contribution as a state income tax payment. Since qualified CCR&R agencies are also non-profit organizations, the donation counts as a charitable donation for federal tax purposes. How cool is that?

What is a Child Care Resource and Referral Agency?

These agencies provide education, training, and resources to childcare providers that help transform average daycares into early learning education centers. They also aid families that are looking for childcare with information and referrals.

In Lafayette Parish, On Track by 5 Alliance is the local CCR&R Agency. Check out their website here.

Facts:

• This tax credit is 100% REFUNDABLE. – If your Louisiana tax liability is less than the sum of your state tax payments, the overpayment applicable to the tax credit is refunded to you.
• Your donation stays with the CCR&R Agency you donated it to. – If you donate to On Track by 5 Alliance in Lafayette, the money stays with that organization even if you get a refund from the state.
• If you’re into the official legal stuff read here for RS 47:6107.
• The program is funded by a federal grant. In other words, Louisiana isn’t coming out of pocket for it so their ability to refund it isn’t affected by the local politics at the capital.
• You must file a federal tax return that reports business activity. This includes Forms 1065, 1120S, 1120, or Schedule C of Form 1040.

Have questions about how to donate or the wonderful works of On Track by 5? Contact Michelle Mahne: msmahne@lpssonline.com or 337-521-7209

Have questions about if the credit would be good for you? Give me a call! 337-330-4000