Housing Program Contribution Credit
A tax credit voucher system administered by the Connecticut Housing Finance Authority (CHFA), provides tax credits for cash contributions made by business firms to housing programs sponsored, developed, or managed by nonprofit corporations that benefit low and moderate income individuals and families. The credit may be applied against various Connecticut business taxes.
The Housing Program Contribution Credit was created to encourage cooperation between nonprofit and for-profit firms to develop affordable housing that otherwise would not be built. The contributions provided by business firms can reduce the amount of financing a project needs.
Business firm means any business entity authorized to do business in Connecticut and subject to any of the following taxes:
Insurance companies, hospital and medical services corporations taxes (Chapter 207);
Health care centers tax (Chapter 207);
Corporation business tax (Chapter 208);
Air carriers tax (Chapter 209);
Railroad companies tax (Chapter 210);
Community antenna television system companies tax (Chapter 211); or
Utility companies tax (Chapter 212).
A tax credit voucher may be granted by CHFAin an amount equal to 100% of the cash contribution made. The annual minimum credit allowed to any business firm is $250, but there is no annual maximum credit that may be granted to any business firm. The maximum credit allowed in the aggregate to all business firms is $10 million. Until November 1 of each year, $2 million
of the total amount of tax credits will be set aside for the Supportive Housing Pilots Initiative or Next Steps Initiative and $1 million of the total amount of all tax credits will be set aside for workforce housing to the extent that the applicants are submitted for the annual funding round. In addition, no organization conducting an eligible housing program may receive cash contributions in excess of $500,000 in any fiscal year.
How to Compute the Credit
The credit must first be claimed on the tax return for the business firm's income year during which the cash contribution was made. Upon verification that the contribution has been made, CHFA will issue a tax credit voucher to the business firm. The tax credit voucher issued by CHFAlists the tax credit amount that may be claimed.
The amount of tax credit that is not used in the income year for which the credit is issued may be carried forward or back for the five immediately succeeding or preceding income years until the full credit is taken.
How to Apply
The amount listed on the tax credit voucher issued by CHFA must be entered on Form CT-1120 HPC, Housing Program Contribution Credit, and Form CT-1120K, Business Tax Credit Summary.
An application package can be obtained by calling CHFATax Credit Unit at 860-721-9501, Ext. 237.
The application information should include:
The name of the housing program(s) to be funded;
The amount of each cash contribution;
A letter(s) of intent from the business firm to the nonprofit corporation(s) listing the actual cash amount to be contributed and endorsed; and
A Certificate of Legal Existence and a Certificate of Incorporation (obtained from the Office of the Secretary of the State).
Informational Publication 2006(15), Guide to Connecticut Business Tax Credits Issued: 04/24/07