PURPOSE: This rule explains the application, allocation of funds, and redemption process to claim the Children in Crisis credit.

1. (1) In general, this rule describes the procedure to claim the Children in Crisis tax credit for tax years beginning on or after January 1, 2006, and the distribution of funds associated with the credit.

2. (2) Definition of Terms.

   1. (A) Children in Crisis tax credit—A tax credit equal to fifty percent (50%) of a verified contribution to a qualified agency. The minimum tax credit issued will not be less than fifty dollars ($50).
   2. (B) Qualified agency—Agencies as defined in section 135.327.1, RSMo, and as qualified by the Department of Social Services. Qualified agencies must apply to the Department of Social Services prior to December 31 of each year to verify qualified status.
   3. (C) Approved payment arrangement—A payment plan signed by the taxpayer and submitted to and approved by the Department of Revenue (department) within sixty (60) days from the notice of denial.

3. (3) Basic Application.

   1. (A) A qualified agency shall provide a contribution verification certification to the taxpayer who makes a contribution to the agency. This contribution shall not be less than one hundred dollars ($100).

   2. (B) In order to claim the tax credit, a taxpayer must complete and submit the following:

      1. 1. MO 1040 tax return;
      2. 2. Form MO-TC; and
      3. 3. Contribution verification from the

qualified agency receiving the contribution.

1. (C) The filing period for claiming the Children in Crisis tax credit begins on July 1 and ends on April 15 of the fiscal year. If the filing period ends on a Saturday, Sunday, or a holiday, the last day for filing shall be the first business day following the end of the filing period. Any claims filed after the filing period shall be denied.
2. (D) In the event of a credit denial due to lack of available funds, the taxpayer will not be held liable for any penalty or interest, provided the balance is paid, or a payment arrangement has been received and approved by the department, within sixty (60) days from the notice of denial.
3. (E) Any amounts outstanding sixty (60) days after the denial notice date will be charged interest at the rate statutorily provided.
4. (F) Funds will be distributed by taking any amount unclaimed in the resident pool for special needs adoptions and dividing it into equal amounts. This amount will then be available for payment of credits from the qualified agencies as defined above. In the event claims from one (1) agency do not total the amount of credit allotted for that agency, the remainder of that agency’s allotment will be divided equally and added to the available funds of the other agencies until all claims are paid or apportioned.
5. (G) In the event claims for the Children in Crisis tax credit total more than the available funds, the claims will be apportioned so that all claims for the Children in Crisis tax credit will receive an equal percentage.
6. (H) The amount of tax credit used may not exceed the income tax for the tax year. The portion of the tax credit that exceeds the income tax shall not be refunded but may be carried forward and used against the taxpayer’s income tax for the subsequent four (4) tax years.

1. (4) Examples.

   1. (A) An individual donates $200 to a qualified agency on December 1, 2007, and receives a contribution verification showing $200 donated and eligibility for $100 in credit. To apply for the Children in Crisis tax credit, the individual must complete the MO- TC, attach a copy to their return, and provide a copy of the verification certification issued by a qualified agency. The tax return is filed prior to April 15, 2008, showing a tax due of $150. Payment for $50 was included with the return. The individual is eligible for the $100 credit.
   2. (B) Using the same circumstances as above, the qualified agency was allotted $500,000 in available funds. Only $400,000 in claims was submitted. The individual will be allowed $100 in credit.
   3. (C) Using the same circumstances as above, the qualified agency was allotted $500,000 in available funds. $1,000,000 in claims was submitted. The individual will receive 50% of the requested credit amount ($50) and will be able to carry forward the remaining 50% ($50) of eligible but not issued credit. A notice of denial indicating a balance due will be issued for $50 allowing 60 days to pay the balance due without incurring interest.
   4. (D) An individual applies for a Children in Crisis tax credit and is allowed a credit equal to 75% of the $6,000 claimed leaving a balance of $1,500 in tax due. A balance due notice is issued stating the amount of tax owed ($1,500). Within 60 days, the taxpayer enters into an approved payment arrangement and makes all required payments. Interest will not be charged.

AUTHORITY: section 135.327, RSMo Supp. 2006.* Original rule filed Oct. 26, 2006, effective May 30, 2007. *Original authority: 135.327, RSMo 1987, amended 1995, 1999, 2002, 2004, 2006.