Neighborhood Assistance Program (NAP) at Britepaths—FAQ
What is the Neighborhood Assistance Program (NAP)?
The Neighborhood Assistance Program (NAP) was created by the Virginia General Assembly in 1981 to encourage businesses, trusts, and individuals to support approved 501(c)(3) nonprofits working for the benefit of low-income persons. Eligible organizations receive an allocation of tax credits they can pass on to their donors. Most states have their own version of this program.
Who qualifies for a Neighborhood Assistance Program (NAP) tax credit?
Individuals, businesses, trusts, health care providers, pharmacists, mediators, and physician specialists who make a qualifying donation to a NAP organization.
What are the requirements for an individual donation?
Neighborhood Assistance Program (NAP) state tax credits may be available to an individual making a donation of cash or marketable securities directly to a NAP organization.
The NAP program requires that the minimum donation by an individual is $500 and the maximum value of the tax credit is equal to 65% of the donation. However, NAP-qualified organizations are allowed to set a higher minimum donation value or reduce the percentage offered to their donors. Britepaths offers 45% on a donation of $500–$999, 55% on a donation of $1,000–$2,499, and 65% on a donation of $2,500 or more.
Example: $500 cash donation x 45% = $225 tax credit, to offset taxes owed on the Virginia State Income Tax Return.
What are the requirements for a business or trust donation?
Neighborhood Assistance Program (NAP) state tax credits may be available to any business entity authorized to do business in the Commonwealth of Virginia, to certain qualified health care professionals and mediators donating services to a NAP organization, or to any trust or fiduciary for a trust subject to tax imposed by Article 6 (§ 58.1-360 et seq.) of Chapter 3 of the Code of Virginia. Britepaths accepts business donations of cash or marketable securities only.
The NAP program requires that the minimum donation by a business or trust is $616 and the maximum value of the tax credit is equal to 65% of the donation. However, NAP-qualified organizations are allowed to set a higher minimum donation value or reduce the percentage offered to their donors. Britepaths offers 45% on a donation of $616–$999, 55% on a donation of $1,000–$2,499, and 65% on a donation of $2,500 or more.
Example: $1,000 donation X 55% = $550 tax credit to be used on the Virginia State Income Tax Return
What kind of donations are not eligible for NAP tax credits?
Any donation must be made directly to the NAP organization with no strings attached and without any conditions or expectations of monetary or other benefits. Discounted property, partial donations, or bargain sales are not allowable for NAP donations. Contributions from DAFs are not eligible for NAP tax credits; however, qualified distributions from IRAs are eligible.
A third-party donation, such as a designation through another non-profit like United Way, Just Give, or the Commonwealth of Virginia Campaign (CVC) etc. is not eligible for NAP tax credits.
Consult Britepaths with questions about what kind of donations are permitted.
Is there a maximum donation value limit for NAP tax credits?
An individual is limited to a maximum donation value of $125,000, per year. Currently, there is no maximum donation limit for a business or trust.
How will I receive my NAP tax credits?
Britepaths will download your tax credit certificate, when available, and email or mail a copy to you.
How do I report my NAP credits on my Virginia Income Tax Return?
Tax credits are reported on Schedule CR. Pass-thru entities need to submit Form PTE Virginia Pass-Through Credit Allocation with a copy of the tax credit certificate. All tax forms can be found on the Virginia Department of Taxation website.
Please refer all tax related questions to Virginia Department of Taxation at (804) 786-2992.
What happens if my tax credits are more than my tax liability?
Tax credits are non-refundable; however, NAP tax credits that exceed the donor’s total Virginia state tax liability may be carried forward for up to five years.
The tax credit for the current year is utilized first, prior to using credit that has been carried forward from a preceding taxable year.
Please contact the Department of Taxation at (804) 786-2992 for additional assistance.
What if I have additional questions or need clarification?
Please contact Dorothy Altmiller at daltmiller@britepaths.org directly to determine eligibility and inquire about current availability of NAP tax credits. You may also review the Donor Fact Sheet or NAP Frequently Asked Questions at the VDSS NAP website for more general program details.