Neighborhood Partnership Program (NPP)
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PURPOSE |
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The Neighborhood Partnership Program (NPP) offers State tax credits as an incentive to Maryland business to contribute to nonprofit organizations addressing critical needs in Maryland's communities. Under the NPP businesses can tailor their corporate giving to invest in selected communities and projects that are important to them. Donating to neighborhood projects helps a business to:
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HOW TO RECEIVE A TAX CREDIT |
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Nonprofit organizations that sponsor community activities in Priority Funding Areas apply for tax credit allocations which are competitively awarded by the Maryland Department of Housing and Community Development (DHCD). Typical activities include community services, literacy training, job training and placement, development of affordable housing, redevelopment assistance and community crime prevention.
Business entities that make donations directly to Nonprofits for approved
projects will receive a tax credit equal to 50 percent of the value of the
donation. These tax credits may be claimed in addition to State and Federal
deductions for charitable contributions, which may make the net cost of a
contribution typically less than 30 cents for each dollar contributed.
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WHO IS ELIGIBLE FOR THE TAX CREDIT |
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Any entity conducting business or operating a trade in Maryland is eligible.
Legislation in 1998 expanded eligibility to include s-corporations, partnerships,
sole proprietorships, and limited liability corporations, in addition to those
eligible formerly, corporations, public utility companies, insurance companies
and financial institutions.
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ELIGIBLE CONTRIBUTIONS |
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Contributions must be cash or goods of at least $500 in value. Contributions of services and real estate are not eligible for tax credits. The value of contributions of used goods must he certified by an independent and unrelated third party. The value of contributions of new goods is equal to the certifiable cost of the goods to the tax credit contributor.
Businesses are limited in the amount of NPP tax credits them may earn each year.
They may claim a maximum of $125,000 in NPP tax credits per year, representing
$250,000 in contributions. However, the amount of tax credits claimed may not
exceed the total amount of tax the business owes for the taxable year. Unused
NPP tax credits may be carried forward by the business and applied against
future years' tax liability, as described below.
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TIMING |
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A business must start using the credits against taxes owed for the year in which the contribution is made. Any excess credits may be carried over for five years following the tax year in which the contribution is made until the full credit is used. Credits may not be used retroactively against taxes owed for years previous to the year the contribution is made. In addition:
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HOW TO CERTIFY A TAX CREDIT |
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To receive a tax credit, business contributors need only fill out a portion of a simple
one-page form and submit it to the nonprofit receiving the contribution, along with
documentation of the value of the contribution, such as the check.
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FOR MORE INFORMATION ABOUT THE PROGRAM: |
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Contact Edna Gross at |