Md. Code Regs. 03.04.02.17

Current through Register Vol. 51, No. 24, December 2, 2024

Section 03.04.02.17 - Donations to Diaper Banks and Other Charitable Entities

A. Definitions.

(1) In this regulation, the following terms have the meanings indicated.

(2) Terms Defined.

(a) "Diaper bank" means a nonprofit organization located in the State that:

(i) Is qualified as tax exempt under the Internal Revenue Code, § 501(c)(3);

(ii) Is established and operating primarily for the purpose of collecting or purchasing disposable diapers or other hygiene products for infants or children; and

(iii) Distributes those diapers or hygiene products through schools, health care facilities, government agencies, or other nonprofit entities for eventual distribution to individuals free of charge.

(b) "Donation" means an irrevocable gift of:

(i) Disposable diapers, other hygiene products for infants or children, or feminine personal hygiene products; or

(ii) Cash that is specifically designated for the purchase of disposable diapers, other hygiene products for infants or children, or feminine personal hygiene products.

(c) "Feminine personal hygiene products" means sanitary pads, tampons, menstrual sponges, menstrual cups, or other similar feminine hygiene products, whether reusable or disposable.

(d) "Qualified charitable entity" means a diaper bank, homeless shelter, domestic violence shelter, religious organization, or other charitable organization that distributes diapers, other hygiene products for infants or children, or feminine personal hygiene products, and that is registered with the Comptroller as a distributor of disposable diapers, other hygiene products for infants or children, or feminine personal hygiene products as described in §C of this regulation.

B. Subtraction for Individual Taxpayers.

(1) For any taxable year beginning after December 31, 2020, but before January 1, 2024, an individual may subtract up to $1,000 of donations made by the taxpayer during the taxable year to a qualified charitable entity from federal adjusted gross income to determine Maryland adjusted gross income.

(2) To claim the subtraction under §B(1) of this regulation, the taxpayer shall file with the income tax return on which the subtraction modification is taken a statement with the following information:

(a) The name of each qualified charitable entity to which a donation was made;

(b) The value of the donation to each qualified charitable entity identified in §B(2)(a) of this regulation, which the Comptroller may verify with the qualified charitable entity; and

(c) Any other information that the Comptroller requires.

C. Qualified Charitable Entities.

(1) In order to register with the Comptroller as a qualified charitable entity, an entity shall:

(a) Submit an application in the form and manner prescribed by the Comptroller;

(b) Submit with the application required under §C(1)(a) of this regulation the following documents:

(i) The entity's organizing instrument, such as its articles of incorporation;

(ii) The entity's current operating instrument, such as its by-laws;

(iii) The entity's determination letter from the Internal Revenue Service designating the entity as a § 501(c)(3) charitable organization; and

(iv) Certification that the entity is in good standing;

(c) Operate in compliance with all applicable federal, State, and local laws;

(d) Be registered as a charity with the Maryland Secretary of State; and

(e) Provide additional documentation as required by the Comptroller.

(2) Upon request by a donor, a qualified charitable entity shall issue to the donor a receipt indicating:

(a) For a cash donation, the amount donated that is specifically designated for the purchase of disposable diapers, other hygiene products for infants or children, or feminine personal hygiene products;

(b) For a noncash donation, a description of the noncash contribution;

(c) The name of the organization;

(d) A statement that no goods or services were provided by the organization, if that is the case;

(e) A description and good faith estimate of the value of goods or services, if any, the organization provided in return for the contribution;

(f) A statement that goods or services, if any, that the organization provided in return for the contribution consisted entirely of intangible religious benefits, if that was the case; and

(g) The date of the donation.

(3) When the value of a donation equals or exceeds $250, the donor shall obtain and keep in their records a receipt from the qualified charitable entity as described in §C(2) of this regulation.

(4) A qualified charitable entity shall provide annually to the Comptroller by January 31 for the prior tax year:

(a) A list of donors from whom the charity has received donations; and

(b) To the extent available, the value of each donor's donation.

Md. Code Regs. 03.04.02.17

Regulation .17 adopted effective 49:6 Md. R. 404, eff. 3/21/2022