From now until June 30, 2012, donors who contribute to certain WVU Extension programs may be eligible for a tax credit that can help reduce their state tax liability.
WVU Extension Service’s Development Office received more than $50,000 in Neighborhood Investment Program (NIP) tax credits for fiscal year 2011-12. The tax credits can be given to donors who contribute to the following programs:

• 4-H camp or college scholarships
• Power of Ten and First Impressions
• the West Virginia Safety Alliance or Natural Gas Safety Alliance and Education programs
• the WVU Extension Service State Fire Training Academy
• diabetes and obesity programs

“This is an exciting program that allows us to offer an incentive to corporations and individuals for contributing to a variety of programs that have considerable impact on a wide range of West Virginians,” said Steve Bonanno, WVU Extension Service interim director.

Businesses and individuals who contribute to any of these programs are eligible to receive up to 50 percent of the contributed amount in the form of state tax credits. Donors may use the credits to reduce liability for the corporate net income tax, the business franchise tax or the personal income tax.

A tax credit differs greatly from a tax deduction. A tax deduction reduces the amount of total income on which taxes are based. A tax credit, on the other hand, is used to reduce total tax liability. Generally, a tax credit is worth substantially more than a tax deduction.

There are three primary limitations on the use of the tax credits:

• The amount of credit allowable must be taken within a five-year period, beginning with the tax year in which the donation is made.
• A donor may receive no more than $100,000 annually in NIP tax credits.
• A donor cannot use NIP tax credit to reduce total tax liability on any one tax by more than 50 percent annually.

If you would like more information on the NIP program, please visit www.wvdo.org/community/nip.html or contact WVU Extension Service Development Officer Andrew Barnes at andrew.barnes@mail.wvu.edu or 304-293-5692.