ConserveND - 40% Tax Credit

    A North Dakota tax break gives you a 40 percent tax credit for gifts to the North Dakota Natural Resources Trust Endowment Fund. Your $5,000 gift could result in $1,400 of federal tax savings and $2,000 in state tax savings or a net cost of only $1,600!

  The credit is up to $10,000 per year for individuals or $20,000 for couples filing a joint return. The 40 percent tax credit also applies to corporations and business entities with some different limitations.

  Contact the Trust at 701-223-8501 or mary@naturalresourcestrust.com for details.

 

Endowment Tax Credit in North Dakota

  North Dakota has for several years had a 40 percent tax credit for planned or deferred gifts via charitable annuities, life insurance policies, etc.

  New in 2011 the statute was amended to include gifts of cash or property. The gifts must be given to a qualified permanent endowment fund (restrictions apply to spending principal) of a qualified nonprofit organization (any 501c(3) located in North Dakota that qualifies for federal charitable income tax deductions).

Individuals

  For individuals the cumulative gift(s) in the tax year must be at least $5,000. The credit is 40 percent of the gift up to a maximum credit of $10,000 ($20,000 for joint filers).  Example - a $50,000 gift at 40 percent credit reduces North Dakota income tax by $20,000, plus the taxpayer is entitled to deduct the $50,000 on their federal return.      

 

 POTENTIAL TAX BENEFITS FOR ENDOWMENT GIFTS

 

 

 

Gift

 

Federal Tax Deduction

(28% Tax Bracket)

 

ND State Income Tax Credit

 

 

 Net Cost

 

$5,000

$1,400

$2,000

$1,600

$25,000

$7,000

$10,000

$8,000

$50,000

$14,000

$20,000

$16,000

 

       

Other entities

  C and S corporations, trusts, estates, and LLCs also qualify for the 40 percent credit up to a maximum credit of $10,000 per year. Entities other than individuals are not subject to the $5,000 minimum contribution. All taxpapers may carry over any unused credit for up to three years. The credit in combination with the federeal tax deduction for charitable gifts offers North Dakota taxpayers a great tool for income tax reduction while supporting North Dakota charities.

  North Dakota Century Code 57-38-01.2

  For more information contact the Trust at 701-223-8501 or mary@naturalresourcestrust.com

This article is not intended to provide specific legal or tax advice.  Please consult your professional tax advisor for specific information for your situation.