State Tax Credit for Endowment Gifts
Individuals may receive a state tax credit for a contribution of $5,000 or more (lump sum or aggregate in one year) to a qualified ND endowment. The tax credit is 40% of the charitable deduction allowed by the IRS up to a maximum credit of $10,000 ($25,000 in gifts) per year per taxpayer or $20,000 ($50,000 in gifts) per year per couple filing jointly.
Example: Mrs. Smith, a ND resident, donates $20,000 in cash to an endowment fund. She receives an $8,000 tax credit (40%) on her North Dakota return. If she is in the 28% tax bracket, her Federal tax savings are $3,360. The “cost” of her $20,000 gift is offset by $11,360 in tax savings.
Donors who decide to add to an endowment fund do so because they understand the importance of supporting the community not only during their lifetime, but for generations to come.
Businesses (C corporations, S corporations, estates, limited liability companies, trust and financial institutions) that pay state income tax may receive a 40% credit up to a maximum credit of $10,000 for contributions to a qualified ND endowment.
Individuals and businesses are able to carry forward their tax credits for up to three additional tax years.