Colorado Springs Financial Briefs: November 23, 2007

The Mission Trace shopping center might soon receive an additional face lift.

Key Community Development New Markets LLC, a subsidiary of KeyCorp, was one of 61 recipients to be granted a $100 million allocation of new markets tax credits from the U.S. Treasury Department.

Congress authorized the NMTC program as part of the Community Renewal Tax Relief Act of 2000, a federal tax-incentive program that encourages increased lending and investing in low- and moderate- income areas.

The program permits taxpayers to apply and compete to receive a credit against federal income taxes for agreeing to make qualified investments in low-income communities. During 2003, Key, one of the first NMTC recipients, used part of its $150 million award to fund Phase I revitalization of the Mission Trace shopping center.

Andrew Romero, vice president of Key Community Development Lending, said Key is considering two loans, one of which would be for Phase II revitalization at Mission Trace. The first NMTC loan refurbished Building E, which is 20,000 square feet, and helped increase the occupancy rate from 60 to 100 percent.

"Now we're looking at refurbishing Building A," Romero said, which is 44,000 square feet and 50 percent occupied.

The NMTC award permits Key to offer lower interest rates and more flexible credit terms than would be normal.

KeyCorp is based in Cleveland, Ohio, and has assets of about $97 billion.

2007 tax break helps workers save for retirement

What started during 2002 as a temporary provision -- the retirement savings contributions credit -- was made a permanent part of the tax code last year. The Internal Revenue Service wants taxpayers to know that the retirement savings contributions credit is available in addition to any other tax savings that apply.

The "saver's credit" will help offset part of the first $2,000 that workers voluntarily contribute to IRAs, 401(k) plans and other workplace retirement programs.

"We want low- and moderate-income workers to know about this valuable credit so they can effectively plan ahead and take full advantage of it," Richard J. Morgante, commissioner of the wage and investment division of the IRS, said. "Now that a growing number of employers are automatically enrolling their employees in 401(k) plans, the saver's credit offers many workers who save for retirement an added bonus."

Taxpayers have until April 15 to set up a new individual retirement account or add money to an existing IRA and still get credit for 2007.

The saver's credit can be claimed by married couples filing jointly with incomes up to $52,000 during 2007 or $53,000 during 2008; heads of household with incomes up to $39,000 during 2007 or $39,750 during 2008; and married individuals filing separately and singles with incomes up to $26,000 during 2007 or $26,500 during 2008.

Other rules that apply to the saver's credit include:

Eligible taxpayers must be at least 18.

Anyone claimed as a dependent on someone else's return cannot take the credit.

Students cannot take the credit.

Certain retirement plan distributions reduce the contribution amount used to figure the credit. For 2007, this rule applies to distributions received after 2004 and before the due date (including extensions) of the 2007 return. Form 8880 and its instructions have details about making this computation.

Income limits are adjusted annually to keep pace with inflation. For more information, visit www.irs.gov.

Rebecca Tonn covers banking and finance for the Colorado Springs Business Journal.

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