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tax credit overview

The Neighborhood Assistance Program (NAP) is a program of the State of Indiana that provides $2.5 million tax credits annually to non-profit organizations for distribution as a fundraising tool.
NAP is created by Indiana Code 6-3.1-9.
NAP credits are worth 50% of the value of a donation/contribution. This means that a $200 donation nets a $100 tax credit.
NAP is administered by the Indiana Housing and Community Development Authority (IHCDA).
Donations are reported to the Indiana Department of Revenue (IDOR), and credits are applied to the donor’s state tax liability.
Open Door Youth Services was awarded $3,705.50 in tax credits to be distributed.

tax credit basics

What is the difference between a Tax Credit, and a Tax Deduction?

  • A tax deduction reduces a taxpayer's taxable income.

  • A tax credit counts as if it were taxes already paid and reduces the taxpayer's total tax liability.


Taxpayer Income: $40,000

Tax Rate: 25%

Tax Liability: (40,000 x .25) = $10,000

  • A $1,000 tax deduction would reduce the taxpayer's taxable income to $39,000.

    • 40,000 - 1,000 = 39,000​

    • 39,000 x .25 = $9,750

  • A $1,000 tax credit would reduce the taxpayer's tax liability to $9,000.

    • 40,000 x .25 = 10,000​

    • 10,000 - 1,000 = $9,000

tax credit ELGIBILITY

Organizations & Corporations

Organizations and corporations are welcome to make NAP tax credit-eligible contributions. However, additional steps or information are required when reporting these contributions:

  • If an organization or corporation wishes to claim the credits itself, the organization/corporation’s information (including total donation amount) should be entered into the Donor Contribution Form (provided by us). At tax time, the organization will then claim the tax credit. The organization’s owner or stockholders must NOT claim the tax credits on their individual/personal tax returns.

  • If an organization or corporation wishes to distribute the credits to its members or shareholders, then the value of the credits must be divided appropriately, and each division must be listed as a separate contribution in the Donor Contribution Form from the individual who will be claiming the credits.

    • Ex: If Organization Z is splitting $1,000 credits, from a $2,000 donation, between 10stockholders, each stockholder must receive a Donor Contribution Form with a $200 donation and$100 credit each.

Individuals & Couples

Individuals may donate to a NAP organization and receive a corresponding NAP Tax Credit. Couples may as well, but must do so in one of the following ways:

  • If a couple files a joint tax return, then only the name and information of the Head of Household should be reported on the Donor Contribution Form.

  • If a couple files separately, only one person may claim the tax credit and so only their information should be provided on the Donor Contribution Form.

  • If a couple makes a single contribution, files separately, and wishes to divide their credits, then each individual should receive a Donor Contribution Form, with the donation divided appropriately between them.

Eligible Donations

The following are donation types that are eligible for NAP Tax Credits. For additional information on each, or to check if another type of donation not listed is eligible, please email us or review the NAP Manual on IHCDA’s website.

  • Cash

  • Check

  • Credit Card

  • Liquidated Stock

  • Donations designated to the NAP Organization through United Way, minus United Way fees.

  • In-Kind donations of building materials, to be used for the purpose described in the NAP Organization’s application to IHCDA.

  • Property donations, as long as the property will be used for the purpose described in the NAP Organization’s application to IHCDA.

  • Donations from an IRA, including Qualified Charitable Distributions.

  • Donations from a 401(k) distribution.

  • Donations made from donor advised funds/trusts, in SOME cases.


Click the "Contact Us" button below where you will be directed to email us. Let us know that you are interested in receiving a tax credit and we will be happy to help.
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