|
 |
|
North Dakota is one of only a handful of states that offer tax credit for charitable gifts and endowment development. The 2007 North Dakota Legislative Session created an income tax credit specifically for charitable gifts made to qualified endowments by businesses, and the law also expands the current income tax credit for individual planned gifts to charities.
The Fargo-Moorhead Area Foundation was instrumental in the creation of this law, which allows for the following:
1. The legislation created a new state income tax credit for gifts made to qualified endowments. A qualified endowment is defined within this legislation as an “irrevocable fund held by a North Dakota incorporated or established organization that is a qualified nonprofit organization; or a bank or trust company holding the fund on behalf of a qualified nonprofit organization.” Funds established with the Fargo-Moorhead Area Foundation do qualify under this law.
2. The new credit for gifts to endowments is equal to 40% of the value of the gift, with a $10,000 annual cap. Any unused amount of the credit can be carried forward three years.
3. The new credit for gifts to endowments is available to corporations. It is also available to partnerships, S corporations or limited liability companies, and the credit is passed through to the individual partners, shareholders or members. For individuals who are partners, shareholders or members of multiple businesses, multiple credits may be available. The tax credit is also available to estates or trusts, and is apportioned to the beneficiaries.
4. No state income tax deduction is allowed for the gift (no double dipping), and the credit may not exceed the taxpayer’s income tax liability.
5. The law expands the tax credit for individual taxpayers who make planned gifts to North Dakota charities. The planned giving credit limits are the same as the business credit: 40% of the value of the gift, with a $10,000 annual cap ($20,000 for a married couple).
The FM Area Foundation offers a variety of endowment fund types to meet the needs and desires of donors. New scholarship funds have been developed by businesses and corporations because of this tax credit. For more information, contact Advancement Officer Cher Hersrud at the Foundation office at 701-234-0756 or cher@areafoundation.org. |
|
|
|
|
|
