The purpose of the Neighborhood Assistance Program (“NAP”) is to provide state income tax credits to donors who support charities, such as ChildSavers, that serve primarily low-income Virginians.
State tax credits are valued at 40% of the value of the gift. Qualifying gifts can count both for NAP (state) tax credits and as a federal income tax deduction!
Gifts from individuals/married couples:
- The minimum qualifying donation amount is $500.
- Qualifying contributions must be made in their entirety during one half or the other of the calendar year (i.e., January 1st through June 30th, OR July 1st through December 31st).
- Cash gifts only.
- There is a five-year carry-forward period in which to use the credits.
Example:
Bob and Mary Smith make a gift of $500 to ChildSavers. They receive credit for 40% of the value of the gift, or $200, toward their state income tax, in addition to being eligible to claim this gift on Schedule A of their federal tax forms, if they itemize deductions. Their gift of $500 therefore costs them less than $300 (exact amount will depend on their federal tax bracket).
Gifts from businesses:
- The minimum qualifying donation amount is $1,000.
- Qualifying donations may be made at any time during the program year (July 1 through June 30).
- Cash, stock, goods, real estate, professional/contracted services, and rent/lease of property are eligible gifts.
Example:
ABC Services, Inc. makes a pledge of $2,500 to ChildSavers in March and pays the pledge in five monthly installments of $500 each. ABC receives state income tax credit for 40% of the value of the gift, or $1,000, and is also eligible to claim this gift as a deduction on its federal tax forms. ABC’s gift of $2,500 will therefore cost the company less than $1,500 (exact amount will depend on the federal tax bracket).
Some restrictions apply; please see the Virginia Department of Social Services' website for further information, and we encourage you to consult with your tax advisor in advance of making any gift.
If you are interested in making a qualifying gift, please contact the ChildSavers Development Office.
