NEIGHBORHOOD INVESTMENT PROGRAM FY 2013 Participant Workshop. September 25, 2012

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1 NEIGHBORHOOD INVESTMENT PROGRAM FY 2013 Participant Workshop September 25, 2012

2 Introductions

3 Application Statistics FY applicants requesting $8.7 million in tax credit 179 applicants were approved for participation Average amount requested: $47,802 Average amount awarded: $16,759

4 Application Statistics FY applicants requesting $10.2 million in tax credit 204 applicants were approved for participation Average amount requested: $47,465 Average amount awarded: $14,015

5 Topics NIP Basics Eligible Donors NIP Paperwork Vouchers Re-Allocation Reporting Questions

6 NIP Basics Eligible Donations In-Kind Donations Ineligible Donations Certification Fees

7 Eligible Donations Minimum Donation: $500 Tax credits may be issued only on donations received after September 7, 2012.

8 Eligible Donations Cash Stock In-Kind Professional Services Personal Property Real Property

9 In-Kind Professional Services Eligible professions: attorneys, accountants, architects, doctors, and other state licensed medical professionals Only 25% of the donation can be in-kind services Only 75% of the value of the service is eligible for tax credit

10 Ineligible Donations Any in-kind service other than those performed by approved professions Leased property Payroll deductions

11 Ineligible Donations Any donations made prior to your certification date (September 7, 2012) Any donations made during the dead period of March 15, 2013 to April 1, Cumulative donations

12 Cumulative Donations These donations are ineligible. Why? Organizations become out of compliance with certification fees Do not meet the definition of an eligible donation

13 Certification Fees When you receive a contribution, you must notify the WVDO and pay a fee equal to 3% of the amount of the contribution The fee goes to the WVDO to pay program costs

Office Credit given is $1,000 (1/2 Cash Donation) Fee is NOT.

14 Certification Fees Examples: Donation is $2,000 X.03 Certification Fees $60 Check Made Payable to WV Development Office Credit given is $1,000 (1/2 Cash Donation) Fee is NOT.03 X Credit Minimum Certification Fee $15 based on minimum donation of $500

15 Certification Fees Common Errors Typically occur at the end of the fiscal year: Donation is $1,000 Credit is $150 (remaining credit) Fee is $15 (based on minimum donation of $500) Donation is $1,000 Credit is $300 (remaining credit Fee is $18 (2 x $300 = $600 x.03 = $18) Note: The State is only interested in 2 x the credit amount in this case $600 of the $1,000. Everything over the $600 is a straight donation to the organization because the organization does not have enough tax credit allocation remaining to offer the regular $500 credit.

16 Certification Fees Fees must be paid to the WVDO within 30 days after the receipt of an eligible contribution Failure to pay your fees within 30 days will result in future sanctions to your organization

17 Sanctions Penalties and interest charged on the amount due Revocation of project certification Retroactive withdrawal of project certification Temporary or permanent disqualification from the program

18 Eligible Donors Businesses and/or individuals that pay WV taxes Applicable taxes: WV Corporate Net Income Tax WV Business Franchise Tax WV Personal Income Tax

19 Eligible Donors Donors have the option of using the tax credit all in one year or within a fiveyear period. However, the following restrictions apply: Cannot reduce total tax liability by more than 50% Maximum tax credit allowed in any one year, to any one donor, is $100,000

20 NIP Paperwork Necessary Items: Tax Credit Voucher Tax Credit and Fee Worksheet Tax Credit Checklist Verification of the donation Check for certification fees with the names of donor(s).

21 Common Paperwork Errors Determination of Certification Fees. Fees are 3% of the total contribution, not total credit given Not sending needed documentation Miscalculation of the value of the donation

22 Tax Credit Voucher Make copies of the original given to you by the WVDO When you receive a donation, fill out the voucher for each individual donation Fill out the voucher completely with the exception of the West Virginia Tax ID Number

23 Tax Credit Voucher Make two copies of the completed voucher, one for your records and one for the WVDO Mail the WVDO their copy, along with the checklist, worksheet, verification of the donation, and fees Send all paperwork to the attention of Ellen Vance

24 Tax Credit Voucher The donor will need a copy of the tax credit voucher (NIPA-1) to file with their taxes The donor will also need a copy of the Tax Credit Schedule (NIPA-2). This is available at:

25 Re-Allocation What is it? The process by which unused tax credits can be re-distributed to participating non-profits that are in need of them

26 Re-Allocation How does it work? Participants are restricted from issuing tax credit between March 15, 2013 and April 1, 2013 This is to allow NIP staff time to evaluate projects, make credit adjustments, and issue new vouchers as necessary

27 Re-Allocation How does it work? (continued) The NIP Advisory Board meets to determine action on projects After approval of the Board, NIP staff will issue new vouchers as necessary Adjusted credit amounts will take effect on April 1, 2013

28 Re-Allocation The re-allocation process involves three actions: Return of credit Re-capture of credit Re-allocation of returned or re-captured credit

29 Re-Allocation Re-capture of credit: By March 15, projects that have issued between 45% and 69% are subject to losing up to 25% of their total allocation By March 15, projects that have issued between 1% and 44% are subject to losing up to 50% of their total allocation

30 Re-Allocation Re-capture of credit: By March 15, projects that have not issued any credit are subject to losing up to 100% of their total allocation

31 Re-Allocation Projects that have issued between 70% and 89% of their credit by March 15 will see no change in their allocation during this process

32 Re-Allocation Re-allocation of credit: Projects that have issued 90% or more of their credits by March 15 (and did not receive the full amount requested for FY 2013) may be considered to receive a supplemental amount of credit, up to the amount requested in their FY 2013 application

33 Reporting Projects are required to report on their progress quarterly. In addition to the percentage of credit you have issued, you will be asked to report on outcomes.

34 Quarterly Report Due Dates September 7 December 31, 2012: Due January 31, 2013 January 1 March 31, 2013: Due April 30, 2013 April 1 June 30, 2013: Included in Final Report, due July 31, 2013.

35 Reporting The final report is more detailed relative to project outcomes Information from the final reports is submitted to the WV Legislature in the NIP Annual Report If your organization does not submit a final report, and is approved for participation the following year, you will not receive your NIP Voucher until the report is submitted

36 Technical Assistance If you have specific questions with regard to your application s rank and/or status, we will be accepting appointments to discuss these issues in October and November

37 Helpful Websites NIP program information and downloadable forms. information on fair market value for personal property donations. information on fair market value of vehicles. s/2010/nipa2.pdf: Tax Credit Schedule (NIPA 2)

38 Contact Information Ellen Vance West Virginia Development Office State Capitol Complex Building 6, Room 553 Charleston, West Virginia Phone: (304) Fax: (304)

39 Representatives from the following organizations are asked to check with Ellen Vance before leaving: Coalfield Community Action Partnership, Inc. Cabell-Huntington Coalition for the Homeless, Inc. CASA of the 11 th Judicial District, WV, Inc. Raleigh County Commission on Aging

Neighborhood Investment Program WEST VIRGINIA DEVELOPMENT OFFICE

Neighborhood Investment Program WEST VIRGINIA DEVELOPMENT OFFICE WEST VIRGINIA DEVELOPMENT OFFICE Contents Purpose of Legislation page 3 Program History page 4 Program Cycle page 5 Changes to Legislation in 2016 page 6 Advisory Board page 8 Tax Credit Overview page