Beacon and the Minnesota State Housing Tax Credit
Where can you invest $1000, get $850 back, and deliver 1:6 leverage for affordable housing developments you care about? Starting this year (and for the next six!), Minnesota!
A new, time-sensitive opportunity to benefit state taxpayers AND two Beacon projects.
**February 12, 2024 update: Thank you to everyone who expanded their generosity by participating in the 2023 State Housing Tax Credit Program. Designated contributions supporting three of our developments have been approved: $100,500 toward Prairie Pointe; $37,250 toward Bimosedaa; and $1,000 toward Emerson Village. Together with your sustained donations to Beacon, these funds will help create new homes and stability for our neighbors. To make a gift directly to Beacon, click here.**
Where can you invest $1000, get $850 back, and deliver 1:6 leverage for affordable housing developments you care about? Starting this year (and for the next six!), Minnesota!
Minnesota individuals and companies can make a contribution of between $1,000 and $2,000,000 to the State Housing Tax Credit Program between now and December 29, 2023 and receive 85% of that contribution returned to them as a tax credit on Minnesota income taxes. This program will be repeated through calendar year 2028.
How might you benefit from this program?
Let’s say you are an individual who owes approximately $10,000 in state income tax in 2023. You would apply for a tax credit by December 13 (newly extended deadline), and determine how much you would like to contribute for tax year 2023. For the sake of this example, let’s say you contribute $10,000 to the State Housing Tax Credit Contribution Fund by December 29, 2023. When you file your state taxes for 2023, $8500 is returned to you as a tax credit. Over $11M in tax credits are available this year, and for the following tax years through 2028.
Since this is a tax credit, not a deduction, the benefit to you does not depend on your tax bracket – you get back 85 cents on every dollar you contribute, regardless of how much money you make.
More about the application and contribution process is online: Support Housing and Qualify for a Tax Credit (mnhousing.gov)
What happens if an individual or corporation has less tax burden than their contribution this year?
Any excess in your tax credit can be carried forward for up to 10 years. For example, if you contribute $100,000 this year, but your state taxes are only $70,000 for 2023, the $30,000 balance you cannot use this year gets applied to your 2024 tax liability.
What happens with the contributions?
The contributions are being used to fund Minnesota affordable housing (multi-family and single family) in two ways: 1) a general contribution pool that will be awarded to affordable housing projects through state processes, and 2) through direct contributions to specific projects that developers have identified would benefit from funding in this way.
Beacon has two specific opportunities for funding: Prairie Pointe and Bimosedaa.
Beacon’s Prairie Pointe and Bimosedaa are prime candidates for these tax credits. Contributions would address any remaining or emerging gaps in capital funding and ensure their successful completion. Please note, the tax credit contributions will only be used for capital. Your tax credit contribution should not take the place of your regular donations to Beacon that sustain the organization and our ability to put public resources to work in our communities.
Please consider identifying Prairie Pointe (1st choice) or Bimosedaa (2nd choice) as the project you would like your tax credit contribution to benefit.
You can find the information you will need about Bimosedaa here, and Prairie Pointe here. The application will ask you for this information after you select “Contribution is for Specific Qualified Project.”
To learn more about the program, visit:
State Housing Tax Credit Contribution Application – must be filled out by December 8:
https://web.cvent.com/survey/4a5fe186-1e00-4cf5-85ef-fb2da35a16d4/questions
Projects that are seeking direct contributions (including Bimosedaa and Prairie Pointe):
Questions can be directed to Heidi Goldman-Gray, Vice President of Advancement & Communications at hgoldman-gray@beaconinterfaith.org or 651-377-8182. We encourage you to contact your tax advisor or financial professional to best understand implications of this program for your individual situation.