The Missouri Affordable Housing Assistance Program (AHAP) housing production credit is used as an incentive for Missouri businesses and/or individuals to participate in affordable housing production. The State offers an income tax credit for any eligible firm or eligible individual that donates cash, equity, professional services, and real or personal property to a non-profit community based organization. The credit is equal to 55% of the value of the contribution.
AHAP credits may be sold and/or are fully transferable (great gift to adult children, parents, or anyone with a MO tax liability). The credit may be used in the first year or carried forward for ten years. To be eligible for an AHAP credit, the donations must assist in the production of a specific affordable housing development or, in some cases, provide assistance for administrative costs of the organization.
The Missouri Housing Development Commission operates the AHAP program. Donor eligibility is determined by the business affiliation. To be eligible, a donor must be subject to Missouri tax from business activities performed in the state of Missouri. Employees of the non-profit which has been allocated AHAP tax credits are not eligible to make donations for AHAP credits. However, they are eligible to receive AHAP tax credits through the transfer process. More specifically, a donor must be classified as one of the following:
Donors may apply the AHAP tax credit against:
Donations may be in the form of cash, stock, real estate, professional services, or materials/products and must be eligible for the federal income tax charitable deduction. The donation must be made to an eligible non-profit agency which has received a reservation of AHAP credits from MHDC. To allocate the credit, MHDC requires supporting documentation evidencing the receipt and value of the donation and a certification form executed by the Donor and the agency. To be eligible, donations must be received after the date of reservation and prior to the deadline outlined in the reservation letter.
First, as with any general charitable donation, the donor is able to take a federal tax deduction. But in addition to the federal deduction, by using the AHAP tax credit, the donor is also able to claim 55% of the donation as a state tax credit. The following is an illustration of an individual or family in the 35% tax bracket, making a $1,000 donation*:
|Donation per $1,000.00||Tax Savings|
|Federal Tax Deduction||35%||$350.00|
|Missouri Tax Deduction||6%||$60.00|
|Missouri AHAP Credit||55%||$550.00|
|Lost Benefit from State Tax deduction||$(175.00)|
|Total Tax Savings||$785.00|
|After Tax Cost of Contribution||$215.00|
*This is an example only; please check with your accountant to determine how this program will affect you personal tax situation.
Please contact the Chief Executive Officer of Welcome Home, Inc., Sarah Grim, at email@example.com or (573)443-8001 ex. 104 for more information.
Please note: The following is necessary for businesses that donate services such as accounting, legal, construction, or other professional services. Each employer of a service providing business must comply by submitting the following forms:
AHAP-130. Services Affidavit. This affidavit certifies that the type of services the donor is donating are the same services the donor renders in the normal course of business, that the amount of the service does not exceed fair market value, and is the same amount charged to the general public. This form is signed, notarized, and submitted to the non-profit along with copies of documents detailing dates of service, type of service performed, and the associated fees for the service.
AHAP-135. Affidavit of Worker Eligibility Policy. This affidavit requires the donor to indicate its type of entity. The donor must also attest that they have not knowingly employed unauthorized aliens. Finally the donor must affirm their enrollment in E-Verify (or some other federally approved work authorization program). This affidavit must be signed, notarized, and submitted with each Tax Credit Certification (AHAP-125).
Documentation of Enrollment into E-Verify. E-Verify is an internet based system operated by the Department of Homeland Security in partnership with the Social Security Administration that allows participating employers to electronically verify the employment eligibility of their newly hired employees. Enrollment in E-Verify is free and must take place before any services are rendered in connection with the AHAP project. All new employees hired by the donor after the date of enrollment throughout the rendering of donated services must be verified by the donor through the E-Verify system. Employees hired before the date of enrollment into E-Verify are not subject to this requirement. A copy of the enrollment confirmation screen or Memorandum of Understanding (MOU) must be submitted with each Tax Credit Certification (AHAP-125) when services are donated.
The web address to enroll is http://e-verify.uscus.gov/enroll/.