Charitable Giving Tax Credit

Souris Valley United Way Endowment Fund

To build our strengths and prepare for the future, our local United Way has established an endowment fund. A permanent endowment will provide a stable financial base for our organization, while allowing us to maximize the resources we direct to our local community members.

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

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 Souris Valley United Way Endowment Fund.

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. Jones, a married ND resident, donates $20,000 in case 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 be 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 ABC 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.