WVACHE Offers Tax Credits for Donations

Eligible businesses and individuals can once again support a worthy cause encouraging more students in the Mountain State to go to college and lower their West Virginia state tax bill at the same time.

Through the Neighborhood Investment Program (NIP), an initiative of the West Virginia Development Office, the WVACHE is able to offer state tax credits to businesses and individuals that make eligible cash contributions to its college-access program. A not-for-profit organization established in 1998, the WVACHE awards grants on a competitive basis to high schools throughout West Virginia for projects that encourage students to aspire to, prepare for and pursue higher education. The 13 high schools funded in the most recent grant cycle have increased their college-going rates by an average of 57 percent since launching their WVACHE Access Projects.

Donors to the WVACHE may be able to earn up to 50 percent of the contributed amount in the form of state tax credits. These credits may be used to reduce certain West Virginia taxes, including the Corporate Net Income Tax, the Business Franchise tax and the Personal Income Tax.

Unlike a tax deduction, which reduces the amount of total income on which taxes are based, a tax credit is used to reduce total tax liability. Generally, a tax credit is worth substantially more than a tax deduction.

Contributions to eligible organizations can be made in the form of cash or check. The minimum eligible donation is $500; the maximum is $200,000. The deadline to contribute or pledge a tax-credit-eligible donation to the WVACHE is March 15, 2008.

The following primary limitations apply to the use of NIP 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; and

• A donor cannot use NIP tax credit to reduce total tax liability on any one tax by more than 50 percent annually.

For more details about the NIP tax credit or making an eligible contribution to the WVACHE, please contact WVACHE Executive Director Sarita A. Rhonemus before March 15, 2008. Donations received or pledged after that date will still be welcomed but may not be eligible for a NIP tax credit.