Residential Treatment Tax Credit

What is the Residential Treatment Tax Credit?

By contributing to a qualified residential treatment center, Missourians:

• Help fund direct services for children in residential treatment; and
• Can claim a tax credit up to 50% of their donation to apply toward their state tax liability.

What is a qualified residential treatment agency?

A qualified residential treatment agency is a residential treatment care facility that:

• Is licensed by the Missouri Department of Health and Senior Services;
• Is accredited by the Council on Accreditation (COA), the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) or the Commission on Accreditation of Rehabilitation Facilities (CARF);
• Is under contract with the Department of Social Services (DSS) to provide treatment services for children who are residents or wards of residents of the this state; and,
• Receives eligible donations.

Who can claim this tax credit?

• A person, firm, partner in a firm, corporation, or a shareholder in an S corporation doing business in the state of Missouri and subject to the state income tax imposed in chapter 143 RSMo;
• A corporation subject to the annual corporation franchise tax imposed in chapter 147 RSMo;
• Any charitable organization which is exempt from federal income tax and whose Missouri unrelated business taxable income, if any, would be subject to the state income tax imposed under chapter 143, RSMo;
• An insurance company paying an annual tax on its gross premium receipts in this state;
• Any other financial institution paying taxes to the state of Missouri or any political subdivision of this state under chapter 148 RSMo;
• An express company which pays an annual tax on its gross receipts in this state pursuant to Chapter 153 RSMo;
• An individual subject to the state income tax imposed in Chapter 143, RSMo. The amount of the claimed tax credit may not exceed the amount of the taxpayer’s state income tax liability for the year the credit is being claimed. Any tax credit that cannot be claimed in the tax year associated with the contribution may be carried forward and used against a taxpayer’s state tax liability for four subsequent years.

How does the credit work?

• (Step 1) A donor contributes to a qualified residential treatment agency. Note: There is no minimum amount of donation
• (Step 2) Qualified residential treatment agencies accepting these donations apply for tax credits on behalf of taxpayer donors.
• (Step 3) The residential treatment agency remits the equivalent of the amount of the tax credit (50% of the donated amount), in the form of a payment, to the state of Missouri. Applications, supporting documentation and payments associated with this tax credit must be mailed to:
  
  Department of Social Services
  Attention: Residential Treatment Tax Credit
  P.O. Box 853
  Jefferson City, MO 65102-0853
  
  All applications, supporting documentation (when applicable) and payments must be submitted within 12 months of the contribution. After that time, applications are void and the right to the tax credit is forfeited.
• (Step 4) DSS verifies with the Department of Revenue if there is an outstanding tax balance due for the donor. Any outstanding balance reduces the approved tax credit amount.
• (Step 5) Within 45 days of receipt of application, DSS issues a certificate to the taxpayer indicating the approved credit amount. The original is forwarded to the taxpayer and a copy is forwarded to the Department of Revenue.

Is this tax credit transferable?

• Yes, the owner of the tax credit certificate may assign, transfer, sell, or otherwise convey the certificate. The new owner will have the same rights as the original owner. When a certificate is assigned, transferred, sold, or otherwise conveyed a notarized Department of Social Services tax credit transfer form must be submitted to DSS 30 days of the transaction.

Is there a maximum amount of tax credits available?

• The amount of credits available to each qualifying residential treatment center cannot exceed 40% of the total payments made by DSS in the preceding 12 months.

What is an eligible donation?

An eligible donation includes cash, publicly traded stocks and bonds and real estate received by a qualified residential treatment agency from a taxpayer. The sole use of these contributions must be direct care services to children who are residents or wards of residents of Missouri.

Note: Donations other than cash require verifying documentation submitted along with taxpayers' tax credit application.

• Contributions of stock, bonds and other marketable securities, values of contributed stocks and bonds must be determined by a reputable source (e.g., Wall Street Journal, New York Stock Exchange [NYSE], National Association of Securities Dealers Automated Quotations [NASDAQ], etc.) on the date of transfer. Required information includes the source, value and date the stock was transferred or how the bond amount was determined.
• Real estate contributions, the value of contributions of real estate shall be equal to the lowest of at least two qualified independent appraisals for commercial, vacant or residential property with a value of more than $25,000. Commercial, vacant or residential property having a value of $25,000 or less requires one appraisal.

Important Residential Treatment Agency Tax Credit Links:

• Residential Treatment Agency Tax Credit Act (RSMo 135.1150)
• Residential Treatment Agency Tax Credit (13 CSR 35-100.10)
• Instructions and Forms to Apply for This Credit
• To Claim the Tax Credit use form MO-TC Missouri Department of Revenue
• For Residential Treatment Agencies to Learn More, Contact Department of Social Services at 573-751-7533 (M-F, 8:00-5:00)
• To Learn More About Claiming the Tax Credit Contact Department of Revenue, E-mail: income@dor.mo.govmo.gov