Neighborhood Assistance Program: Business Contributor

The Neighborhood Assistance Program (NAP) helps businesses support local non-profits by giving them tax credits for their contributions. These contributions help fund projects that improve communities, especially for people with low incomes.

How it works:

• Non-profit organizations apply for NAP tax credits through the Pennsylvania Department of Community and Economic Development (DCED). A business partners with the applying non-profit to provide contributions for the applying project.
• If approved, businesses that contribute to these projects can receive up to 95% in state tax credits.

What kinds of projects does NAP support? NAP funds a variety of community projects, such as:

• Building affordable housing
• Providing food for those in need
• Addressing social injustices
• Offering job training and employment services
• Supporting community economic development

How can businesses contribute? Businesses can support projects by donating:

• Money (cash contributions)
• Equipment or supplies
• Job training services
• Real estate
• Technical assistance

Important note: Businesses that contribute receive Pennsylvania state tax credits, but DCED does not offer tax advice. If you have tax-related questions, please consult your business accountant or tax advisor.

Why Choose NAP Tax Credits?

The Neighborhood Assistance Program (NAP) makes it easy for businesses to support their communities while getting valuable tax benefits. By contributing to a local project, businesses can receive up to 95% in Pennsylvania state tax credits, reducing the financial cost of their donation.

What Taxes Can NAP Credits Be Used For?

Businesses can apply NAP tax credits to:

• Personal Income Tax (via pass-through entities)
• Corporate Net Income Tax
• Bank Shares Tax
• Title Insurance & Trust Company Shares Tax
• Insurance Premiums Tax (excluding surplus lines, unauthorized, and marine insurance)
• Mutual Thrift Institutions Tax

Contributions to NAP projects may also count toward Community Reinvestment Act (CRA) credits, helping businesses meet federal requirements while making a difference locally.

NAP Business Contributor Requirements

1. Provide letter of commitment to the non-profit applicant (required with application submission)
2. File the Electronic Clearance Form for tax credits on the PA Department of Revenue website
3. Upon official approval of the project, make the committed contribution directly to the non-profit before June 30
4. Submit an Application for Tax Credit with proof of contribution

Additional Resources

• NAP Contributor Commitment Agreement Form
• NAP Business Contributor Handbook
• NAP Business Fact Sheet
• NAP Business Contributor Checklist
• Application to Sell or Assign Tax Credits

Questions?

Looking to partner with a community organization?  Reach out to the NAP program office resource account at RA-DCEDNAPMAIL@pa.gov.