*Please contact Habitat BEFORE making a donation to ensure AHAP credits are still available – AHAP credits are reserved on a first-come, first-served basis.*

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.

Who is an eligible donor?

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:

  • A corporation filing Missouri Form 1120.
  • A sole proprietorship filing Federal Form 1040 Schedule C and Missouri Form 1040.
  • A farm operation filing Federal Form 1040 Schedule F and Missouri Form 1040.
  • An individual reporting income from rental property or royalties on Federal Form 1040 Schedule E and filing Missouri Form 1040.
  • A small business corporation (S-Corporation) filing Missouri Form 1120S.
  • A partnership filing Missouri Form 1065.>
  • A bank, credit institution, savings and loan association, credit union, farmer’s cooperative credit association, or building and loan association filing a Missouri financial institution tax return.
  • An insurance company filing a Missouri Insurance Tax Return with the Division of Insurance.
  • An individual partner in a partnership or shareholder in an S-Corporation.
  • A public or private foundation subject to Missouri tax. The foundation must certify that it is subject to the state income tax imposed by the provisions of chapter 143 RSMo because the unrelated business income of the foundation is subject to Missouri income tax.

 

Donors may apply the AHAP tax credit against:

  • The corporation franchise tax in Chapter 174 RSMo.
  • The State income tax in Chapter 143 RSMo.
  • The annual tax on gross receipts of express companies in chapter 153 RSMo.
  • The tax on banks determined under subdivisions (1) or (2) of subsection 2 of RSMo 148.030.
  • The tax on other financial institutions in Chapter 148 RSMo.
  • The annual tax on gross premium receipts of insurance companies in Chapter 148 RSMo.

 

What are eligible donations?

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.

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.

NEW Requirements:

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/.

How do the tax credits work?

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
Donation $1000.00
Tax Savings -$ 785.00
After Tax Cost of Contribution $ 215.00

 

How do I obtain tax credits?

Please contact Habitat for Humanity Saint Louis Development Operations Manager, Deirdre Schaneman, & Development Relationship Manager Harper Zielonko by clicking below. We do not guarantee the availability of AHAP Tax Credits, and they are allocated to donors on a first-come, first-served basis.

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