September 4, 2019

Does Your Business Need a PA Tax Credit?

Does Your Business Need a PA Tax Credit?

*Full disclosure, Electro Soft COO Karla Trotman sits on the board at Carson Valley Children’s Aid. One of the affiliate organizations, Norristown Neighborhood Center(NNC), is using this program to raise money for its programming, which is how we learned about this tremendous opportunity.

The name of this program is the Neighborhood Assistance Program (NAP). The goal is to encourage corporations to invest directly in projects that help distressed neighborhoods. The state is incentivizing corporations to do so by offering a state tax credit of 75% of the donated amount. What does that mean? You donate $5000 to an organization, like NNC. The state then awards your corporation with $3750 in tax credits, but you get the full benefit/credit of having donated $5000.

If you are like many companies and pay very little state tax, you can SELL the credits on the exchange or to another business with a large tax liability, for CASH. The going rate is about $0.85 on the dollar, so your $5000 donation will net you approximately $3187.50 in cash.

This is completely legal. Similar to the R&D Tax credit program, it’s just not widely known.

The caveat to this program is that you must move forward by September 30th with a letter and application in order to get approved for the tax credits.

While we believe that NNC would greatly benefit as the recipient of your dollars, there are many distressed neighborhoods that could use your support.  So please, do your due diligence prior to selecting a program to support.

Please feel free to pass this information along to other companies as well.

If you choose to move forward with NNC, Julie O’Connor at NNC (julie.oconnor@cvca-pa.org) will be happy to help fill out any paperwork to help you move forward with your donation.