Neighborhood Assistance Act
The Neighborhood Assistance Act Tax Credit Program for Education, administered by VDOE, allows individuals or businesses to receive state tax credits – equal to 65 percent of the qualified donation – for eligible contributions made to approved neighborhood organizations that provide scholastic instruction or assistance to low-income persons or eligible students with a disability.
- $500 is the minimum donation eligible for tax credits in a taxable year.
- $125,000 is the maximum amount of donations eligible for tax credits in a taxable year.
- $616 is the minimum donation eligible for tax credits in a taxable year.
- There is no maximum donation limitation for businesses.
To participate in the Neighborhood Assistance Act Tax Credit Program for Education, neighborhood organizations are required to meet the six criteria that follow. Four of the criteria apply not just to the Applicant, but also to affiliated entities. An entity is considered to be an affiliated entity if the Applicant, directly or indirectly, controls the entity, is controlled by the entity, or is under common control with the entity.
- The Applicant must be a neighborhood organization, as defined in § 58.1-439.18 of the Code of Virginia, and provide neighborhood education assistance in Virginia.
- The Applicant and each affiliated entity must be able to demonstrate that at least 50 percent of the total of the persons it served during the most recent fiscal year are low-income persons or eligible students with a disability.
- The Applicant and each affiliated entity must provide an audit or review for the most recent year ended performed by an independent certified public accountant, or, if the applicant neighborhood organization’s total revenues (including the value of all donations) were $100,000 or less for the most recent year ended, a compilation for such year performed by an independent certified public accountant.
- The Applicant and each affiliated entity must be able to demonstrate, on a schedule provided by the Department, that at least 50 percent of its revenues were used, or will be used, to provide services to low-income persons or to eligible students with disabilities.
- The Applicant’s and each affiliated entity’s audit, review or compilation report must not contain significant financial or operating risk, or areas of concern, that would prevent the Applicant from providing neighborhood education assistance in Virginia during the applicable program year.
- The Applicant has been in existence for at least one year by the start of the program year, which begins July 1.
For more information about the tax credit program or how to apply to become an approved neighborhood organization, please refer to the Guidelines for the Neighborhood Assistance Act Tax Credit for Education and the related forms and instructions provided below.
§§58.1-439.18 through 58.1-439.22, and § 58.1-439.24 of the Code of Virginia
Todd L. Gathje, Ph.D., Tax Credit Program Specialist
- Guidelines for the Neighborhood Assistance Act Tax Credit Program for Education (PDF) (Effective September 2, 2016)
- 2016 Federal Poverty Guidelines
- 2015 Federal Poverty Guidelines
- 2016-2017 Approved Organizations (PDF)
- Forms and instructions for donors making a contribution to a neighborhood organization: