Qualified Endowment Credit
Important Update - Effective January 1, 2024, Senate Bill 506 increased the Qualified Endowment Credit limits to those noted below and also made the popular state tax credit permanent.
How it Works
In 1997 the Qualified Endowment Credit (commonly referred to as the Montana Endowment Tax Credit) was created to encourage gifts to endowments supporting Montana charities.
This credit is available to individuals who pay income tax in Montana who make a qualified planned gift to a permanent endowment to benefit a tax-exempt charitable 501(c)(3) nonprofit organization. Businesses qualify by making a cash gift to a qualified endowment to benefit a tax-exempt charitable 501(c)(3) nonprofit organization.
All of the University of Montana Foundation’s endowed funds qualify for the Qualified Endowment Credit.
Frequently Asked Questions
What is the maximum tax credit I can claim?
The credit is 40% of the planned gift's federal charitable deduction value, up to a maximum of $15,000 per individual or $30,000 per couple. For businesses, the credit is calculated at 20% of the value of the gift, up to a maximum of $15,000.
Who is eligible?
Any individual or business that pays income taxes to the State of Montana.
What is the difference between a tax credit and a tax deduction?
Tax deductions lower your taxable income. Tax credits provide a dollar-for-dollar reduction of your state income tax liability. This means that a $15,000 tax credit saves you $15,000 in taxes.
Which planned gifts qualify?
- Charitable Gift Annuities
- Deferred Charitable Gift Annuities
- Charitable Remainder Unitrusts
- Charitable Remainder Annuity Trusts
- Pooled Income Fund Trusts*
- Charitable Lead Trusts
- Charitable Lead Annuity Trusts
- Charitable Life Estate Agreements
- Paid-up Life Insurance Policies
What else do I need to know?
- The credit is only available in the year you make your planned gift. If you are unable to use the full credit in that year, there is no carry-forward or carry-back.
- The credit is non-refundable, which means that it cannot reduce your income tax liability to less than zero.
- You can take advantage of the Qualified Endowment Credit each year you make a qualified gift.
How can I learn more?
Contact Senior Director of Planned Giving Alison Schultz at 406-243-5121 or email@example.com if you would like a personalized gift illustration outlining the benefits of the Qualified Endowment Credit.
The University of Montana Foundation provides information about the benefits of planned gifts and does not provide any legal, financial or tax advice. We encourage you to talk with your advisors who are familiar with your specific situation to determine the benefits to you.
*Not offered by the University of Montana Foundation