The Neighborhood Assistance Program (NAP) is a program of the State of Indiana, established by Indiana Code 6-3.1-9 and administered by IHCDA through approved local non-profit organizations. The purpose of the program is to provide a means for these organizations to fund certain neighborhood-based programs and projects that improve distressed neighborhoods and the lives of the families that live there by encouraging individuals and businesses to make donations in exchange for Indiana State tax credits.

Each year, IHCDA awards up to a total of $2.5 million in Indiana tax credits to qualifying organizations. Each prospective participant organization submits a project application to IHCDA in the spring and, if approved, is awarded an allocation of tax credits. The organization then distributes these tax credits as an incentive to individuals or businesses who donate to the organization.

All donor contributions raised in exchange for NAP credits go toward the program or project described in the organization’s application. Eligible projects include affordable housing, counseling, child-care, educational assistance, emergency assistance, job training, medical care, recreational facilities, downtown rehabilitation, and neighborhood commercial revitalization. All projects must benefit economically disadvantaged areas and/or persons.

The Indiana Department of Revenue (IDOR) manages the administration of NAP tax credits to donors. Twice a year, participating NAP organizations report donor information to IHCDA for all NAP credits they have distributed. Every January, IHCDA compiles a report with this donor information for every reported donation received by all NAP organizations during the prior calendar year and sends this information to IDOR as verification of donors’ eligibility to claim NAP tax credits on their Indiana State taxes.

A donor who receives NAP tax credits from an eligible non-profit organization may receive a reduction in their Indiana State tax liability valued at 50% of the amount of their donation. This means that if a donor contributes $200 and receives tax credits for their full donation, they can receive a $100 tax credit, which is applied against their tax liability on their Indiana State income tax return. A tax credit can only be claimed on the tax return corresponding to the calendar year in which the donation was made.

The maximum tax credit award per organization per program year is $15,000.00. The NAP program cycle follows the Indiana State fiscal year, which runs from July 1 through June 30 of the following calendar year.

NAP Program Flyer