The Community Development Corporation (CDC) Tax Credit program rewards local businesses that contribute to economic development efforts in distressed parts of the City.
The tax credit is available to a maximum of 42 businesses in any given tax year. Due to the popularity of the program, we can’t guarantee availability to all qualified applicants. The City advertises open slots when they become available. Once an opening has been announced, applications are reviewed and accepted on a first-come, first-served basis.
A business is eligible to receive a tax credit of $100,000 per year if it:
- Sponsors a qualifying organization that is not already participating in the tax credit program;
- Pledges to contribute $100,000 per year to that qualifying organization for 10 consecutive years; and
- Applies for a renewal each year to establish continued eligibility.
An organization participating in the program must fall under one of the following designations:
- Qualifying CDC undertaking economic development activities within the City of Philadelphia
- Qualifying nonprofit intermediary
- Qualifying nonprofit organization engaged in developing and implementing healthy food initiatives
Of the 42 available program slots, 40 are reserved for businesses that contribute to qualifying CDCs and nonprofit intermediaries. The remaining two slots are reserved for contributions to nonprofit organizations engaged in developing and implementing healthy food initiatives.
You can find a full description of the CDC Tax Credit, including definitions of qualifying CDCs, under Section 501 of the BIRT regulations.
The tax credit will be applied against the Business Income and Receipts Tax (BIRT) obligation of the participating business(es).
Co-sponsoring a qualifying organization
Two businesses can partner to sponsor a qualifying organization. In this situation, both businesses are parties to a contribution agreement with the City. The $100,000 annual tax credit is divided between the two businesses in proportion to each business’s contribution, as specified in the contribution agreement.