North Dakota Charitable Giving Tax Credit

On April 26, 2011 Senate Bill 2160 was signed into law. This new law allows for a generous ND tax credit for businesses and individuals who give to our qualified MSA United Way Endowment Fund.

MSA United Way Endowment Fund

To build on our strengths and prepare for the future, our United Way has established an endowment fund, with the goal that every dollar donated to our annual campaign be used to support local programs. A permanent endowment will provide a stable financial base for our organization, while allowing us to maximize the resources we direct to local citizens.

Supporting an endowment for operations requires foresight and vision - and it's a rare opportunity to make a lasting difference. Making a leadership gift to our United Way's Endowment Fund is an opportunity to give back to this community in a way that will matter as much fifty years from now as it does today.

40% tax credit for individuals

Gifts made by an individual to a qualified endowment fund are eligible for the 40% tax credit if the aggregate of that year’s gifts are equal to $5,000 or more.
 
The maximum credit amount that may be claimed is $10,000* (based on up to $25,000 in gifts) for an individual or $20,000* (based on up to $50,000 in gifts) for married individuals filing jointly.
 
Example: Mrs. Smith, a married ND resident, donates $20,000 in cash to a qualified endowment fund. She receives an $8,000 tax credit (40%) on her North Dakota return. If she is in the 28% Federal tax bracket, her Federal tax savings are approximately $5,600 (28% of $20,000). The “net cost” of her $20,000 gift is
$6,400.

40% tax credit for businesses
 
Gifts made by a business entity (including financial institutions, estates, and trusts) to a qualified endowment fund are also eligible for a 40% tax credit. They too have an annual limitation of $10,000*.
 
In some cases the entity will “pass through” some or all of the credit to the business owners or to the beneficiaries of the trust or estate.
 
Example: Partnership XYZ has three equal individual partners. They would each receive a $3,000 tax credit available for use on their North Dakota individual income tax returns if the partnership qualifies for a $9,000 credit.
 
* Actual tax situations may vary slightly. Individuals and businesses are able to carry forward their unused tax credits for up to three additional tax years.

Please consult your tax advisor for additional information and advice specific to your situation.

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