The Community Development Assistance Act enables DED to distribute a 40% state tax credit to businesses, corporations, insurance firms, financial institutions, and individuals that make eligible cash contributions or provide services and materials to approved community betterment projects.
A municipality, county, tribal authority, or non-profit community betterment organization can apply for CDAA tax credits through DED. Once the project is approved, the organization can notify donors that they’re eligible for tax credits.
- Employment training.
- Human and medical services.
- Physical facility and neighborhood development services.
- Recreational and educational activities.
- Crime prevention.
Projects deemed most important include those that:
- Substantially contribute to the area’s self‐help effort by building the capacity of local residents to address locally-defined objectives.
- Result in the provision of essential services to low- and moderate-income persons, who are not adequately being provided for in the affected neighborhood and for which there are no readily available resources (provide a non‐duplicative service).
- Tangibly contribute to the development of lasting cooperation and public/private partnership efforts of area organizations and businesses.
No more than $50,000 in state tax credits can be approved per project, per fiscal year. In most cases, the initial approved amount of tax credits is $25,000. The project director for an approved project may request that the amount of tax credits involved increase by written request to the CDAA coordinator. Subject to legislative changes, a total of $350,000 in state tax credits can be allocated each fiscal year by the department.
How to Receive Tax Credits
After making an eligible contribution to an approved community betterment project, the business, corporation, insurance company, financial institution, or individual must complete and submit Form CDAA1 with proof of contribution to the department. Individuals must also submit a United States Citizenship Attestation Form. DED will then send contributor a copy of the completed Form 1099NTC. The contributor must complete the Nebraska Department of Revenue’s Form CDN and attach the two forms to the contributor’s tax return.
Length to Claim a Credit
The tax credit must be claimed on the tax return for the year when the contribution is made. Any tax credit balance can be carried over and applied against the tax liability for the next five years immediately succeeding the tax year where the credit was first properly claimed and allowed.
CDAA operates on an open cycle. Read the CDAA application to learn more about the application process and to apply.