Tis’ the season for making your final charitable contributions for the year and helping out your community at the same time. If you are going to make only one contribution this year, I would highly suggest contributing to Oregon’s Individual Development Account (IDA) Initiative.
With a normal charitable contribution, you get an itemized deduction on the Federal and State returns; however, an IDA contribution give you an Oregon credit and a Federal itemized deduction. Here is how it works:
- you get a 75% OR credit to offset your tax liability (code 715 on the OR40 form),
- you take the full contribution on your Federal Schedule A as an itemized deduction,
- finally you have to claim an other addition labeled “715” on your Oregon return as you cannot claim a deduction for an item you are using for a credit.
Here is what it looks like with numbers based on a total contribution of $100:
- OR credit would be $75,
- Federal itemized deduction for charitable contributions would be the full amount of $100,
- the other addition to Oregon income would be $100 ($75 credit divided by 75%).
Even with the other addition to income, the IDA contribution is a great deal! However, make sure you will have Oregon tax liability, as in certain cases the credit would not be beneficial. The best part is that I just emailed Cynthia Winter, the IDA Program Director, and the credits are still available at this point.