NORTH DAKOTA TAX CREDITS FOR CHARITABLE GIVING
Significant tax incentives are available to North Dakota taxpayers who support qualified North Dakota charitable organizations. West River Health Services Foundation is considered a qualified charity.
The tax incentives focus on two types of giving:
1. Deferred giving…irrevocable planned gifts made by individuals. An individual North Dakota taxpayer is allowed a state tax credit in an amount equal to 40% of the present value of a charitable gift. The maximum credit is $20,000.
2. Outright giving…gifts made by business entities. A North Dakota business is allowed a state tax credit of up to $10,000 for gifts to qualified charitable endowments. This credit is computed at 40% of the amount of the gift. The annual limitation on this credit is $10,000. Eligible gifts of up to $25,000 per year will bring about the maximum tax credit. Outright gifts may be declared as a charitable deduction on your federal income tax return for the year you make the gift.
The hypothetical example below shows the tax benefit of a charitable endowment tax credit for a tax payer in the 40% federal tax bracket:
Gift amount |
$5,000 |
$10,000 |
$25,000 |
Federal tax deduction |
-$2,000 |
-$4,000 |
-$10,000 |
N.D. state tax credit |
-$2,000 |
-$4,000 |
-$10,000 |
Net cost |
$1,000 |
$2,000 |
$5,000 |
A qualifying gift to West River Health Services Foundation can enable a North Dakota taxpayer to enjoy the benefits of this tax credit. All donors are encouraged to seek out a professional advisor to determine how the credit would apply to their specific situation.
For more information call 701-567-6187.