We expect a lot of attention in the 2016 session to be paid to the state’s tax code, with revenues and expenditures the unavoidable ‘beast in the room.’
Here’s a quick summation of two tax issues we anticipate having an outsized impact on nonprofits and low-income families in West Virginia.
NIP Tax Credits
Nonprofits across the state benefit from the Neighborhood Investment Program tax credit system. This program allows for tax deductions when you donate to a nonprofit that has NIP credits. For example, a $1,000 tax-deductible donation could get you a $500 tax deduction come April 15.
The WV Neighborhood Investment Program makes it possible for more than $6,000,000 in new charitable private gifts to be given annually, and those gifts support nonprofits across the Mountain State.
The program has to be periodically mandated by the State Legislature to continue operating. It is up for renewal in 2016, and has to be renewed through bill passage.
Philanthropy WV and the WV Nonprofit Association are advocating for the Legislature to renew the program so that they can continue operating and benefit WV nonprofits. They have identified the loss of this program as a potential catastrophic impact to many organizations that provide important services to West Virginia communities.
Visit their 2016 NIP Renewal website to get information on the program and information on how you can help to advocate for a renewal this year.
State Earned Income Tax Credit
A state Earned Income Tax Credit (EITC) would support families who are struggling to make ends meet, by providing them with a tax break that makes it easier to pay for necessities like groceries, school supplies or car repairs.
More than 141,000 working families in West Virginia could keep more of their earnings if a state EITC was established. You have to be working and contributing back to society to qualify for the EITC; the tax credit can only be claimed by tax-paying low-wage workers.
An EITC creates an economic boost and reduces poverty by helping low-wealth families and individuals who are working but struggling to get by. Currently, one out of five West Virginia households receives the federal EITC.
Twenty-six states provide an additional state EITC. The WV Center on Budget and Policy and other partners are seeking to make West Virginia state number 27.
If you are interested in West Virginia establishing a state EITC, and would like to learn more about the issue, join the WV Center on Budget and Policy for a Learning Event on EITC. On Monday, Jan. 11, at the Charleston Embassy Suites, experts from the Richmond Federal Reserve, Marshall University, the WV Legislature and Duke University will present on the issue.