ND Tax Credit Makes Major Gifts More Affordable For Donors

People donate for many notions. Two common reasons are to be part of something great, and to make a difference in the lives of others. Did you ever wish you could afford to make a larger financial gift? In 2007, North Dakota State Legislative Assemblies made it easier for individuals and businesses to support the charity of their choice by introducing a 40 percent state tax credit.

An individual or couple is eligible to receive a 40 percent tax credit by making a gift of $5,000 or more (lump sum or aggregate in one calendar year) to a qualified ND endowment. The individual will receive a tax credit of 40 percent of the gift up to a maximum credit of $10,000 per year for single taxpayers or $20,000 per year for a couple filing jointly.

For individuals who prefer to make a planned gift (charitable remainder trust, charitable gift annuities, life insurance policies, etc.) to a qualified N.D. endowment, they too can benefit from the 40 percent income tax credit. Similar to the endowment credit above, the tax credit is 40 percent of the charitable deduction allowed by the IRS up to a maximum credit of $10,000 per year per taxpayer filing single or $20,000 per year per couple filing jointly.

The best part about the income tax credit is that it costs you less to donate as you save on both the federal level and on the state level. For example, here are the savings for different gift values for a taxpayer in the 33 percent tax bracket.

Gift amount                                $5,000                 $10,000               $25,000              
Federal tax savings**                (1,650)                 (3,300)                 (8,250)                
N.D. state income tax credit      (2,000)                 (4,000)                (10,000)               
Net cost of gift                            $1,350                 $2,700                 $ 6,750               


  
  

  
 

 

 

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