NAP Tax Credits for United Services for Children Donors
When you make a donation of $1,000 or more to United Services for Children, you may qualify to receive a 50 percent state tax credit on your income taxes.
United Services for Children has been approved by the Missouri Department of Economic Development to participate in the Neighborhood Assistance Program (NAP) Tax Credits. Eligible donors utilizing NAP Tax Credits can give United Services for Children full benefit of their donation while allowing themselves to benefit on both their state and federal tax liability. To use NAP credits, contact Diane Wolferding at 636-926-2700, ext. 101.
What are NAP Tax Credits?
NAP Tax Credits are fundraising tools that help nonprofit organizations obtain the funds necessary to carry a project through to completion. NAP Tax Credits enable eligible donors to donate a portion of their Missouri tax liability to designated nonprofit initiatives, like United Services for Children.
Donors may claim the tax credits when they file their Missouri tax return. Additionally, donors can claim their entire contribution on their federal income tax return as a charitable donation. As an incentive, the tax credit not only maximizes the amount a donor might give, but also provides an opportunity for businesses, state government, and the nonprofit sector to build and sustain communities by establishing solid public-private partnerships.
Who are eligible donors?
- Corporations – Missouri Form 1120
- Small Business Corporations (S Corp) –Missouri Form 1120S
- Limited Liability Corporation/Partnerships – Missouri Form 1120, 1120S, 1065
- Partnerships – Missouri Form 1065
- Individual partners in a partnership or shareholder in an S Corp – Federal Form 1040, Missouri Form 1040, Banks, Credit Institutions, Saving and Loan Associations, Credit Unions, Farmer’s Cooperative Credit Associations, or Building and Loans – Missouri Financial Tax Return
- Insurance Companies – Missouri Insurance Tax Return with the MO Dept. of Insurance
Individuals who:
- Have rental property in Missouri – Federal Form 1040, Schedule E and Missouri 1040
- Have royalty income in Missouri – Federal Form 1040, Schedule E and Missouri 1040
- Operate a sole proprietorship in Missouri – Federal Form 1040, Schedule C and Missouri 1040
- Operate a farm in Missouri – Federal Form 1040, Schedule F and Missouri 1040
How do I receive and use my NAP tax credits?
A business or an individual with business income can receive Missouri state tax credits (not a deduction) equal to 50 percent of a contribution designated to United Services for Children. For example, a gift of $10,000 to United Services will receive a Missouri state tax credit of $5,000. This credit is in addition to the usual federal and state charitable deductions.
The process is very simple: First, make an eligible contribution to United Services for Children. Then complete and return a notarized tax credit application form, provided by United Services. The Missouri Department of Economic Development will issue NAP Tax Credits to you, which can be filed with your Missouri business income tax return. The tax credits are applied to your total tax liability incurred for that tax period.
A donor may receive no more than $250,000 in NAP tax credits in one tax year for contributions made to one or more NAP approved projects. The contributor has the tax year the contribution was given and five succeeding tax periods in which to use the credits, if the donor does not have enough tax liability in the tax year the contribution is made.
What size of contribution is required to take advantage of the NAP Tax Credits?
Any donation of at least $1,000 is eligible for the NAP tax credits. A contribution of cash, stocks or bonds is eligible for the tax credits.
Contribution examples:
These are examples ONLY. Should you have specific tax questions and to determine how the NAP Tax Credits specifically apply to you, please consult your accountant or tax advisor. Examples of contributions are below, assuming a 35% tax bracket:
| $2,500 Donation | $10,000 Donation | |
| Missouri Tax Credit (50% of gift) | – $1250 | – $5000 |
| Federal Income Tax Deduction | – $875 | – $3500 |
| State Income Tax Deduction | – $150 | – $600 |
| Reduced Federal State Deduction (State Tax) | + $438 | + $1750 |
| Net Cost to Donor: | $663* | $2650* |
*As in all cases, please consult a professional tax advisor regarding a donation of any kind.
NAP tax credits are NOT sellable, transferable, or refundable. For more information on NAP Tax Credits, visit the Missouri Department of Economic Development website at:www.ded.mo.gov
