The Connecticut Neighborhood Assistance Act (NAA) Tax Credit Program is designed to provide funding for municipal and tax exempt organizations by providing a corporation business tax credit for businesses who make cash contributions to these entities.

Businesses can receive a credit of 60% of their approved contribution to certain programs (or 100% in the case of certain energy conservation programs) approved by the Department of Revenue Services. Any tax credit that is not taken in the income year in which the contribution was made may be carried back to the two immediately preceding income years (beginning with the earlier of such years).

The program has several statutory limits, including the following:

A business is limited to receiving $75,000 in tax credit annually.
A non-profit organization is limited to receiving $150,000 in contributions in the aggregate.
The total charitable contributions of the contributing business must equal or exceed its prior year’s amount (unless the contribution is to an approved open space acquisition fund).
The minimum contribution on which credit can be granted is $250.
The program has a five million dollar cap, which, if exceeded, results in proration of approved donations.

For more information on this program, see Information Publication 2010(22) The Connecticut Neighborhood Assistance Act Tax Credit Program.