North Dakota Tax Credit for Planned Gifts

The 2007 North Dakota State Legislature has given a boost to ND taxpayers and the charitable organizations they support. Senate Bill 2363 was passed overwhelmingly and creates an individual income tax credit for planned charitable gifts made to North Dakota charitable organizations if completed in taxable years beginning after December 31, 2006.

The amount of the credit is 40% of the Federal income tax deduction allowable for the planned gift. The maximum credit amount is $20,000 ($10,000 for single taxpayer), which can be used to offset the North Dakota individual income tax in the year of the gift, plus a three year carryover.

It is important that charitable trusts and gift annuity agreements contain conforming language to follow the Legislation’s specifications and allow such gift arrangements to qualify for the credit.

"Planned gifts" for purposes of this credit include:

  • Charitable Remainder Trusts
  • Charitable Lead Trusts
  • Charitable Gift Annuities
  • Charitable Pooled Income Funds
  • Charitable Life Estate Agreements
  • Certain paid-up life insurance policies

A qualifying planned gift favoring Luther Memorial Home will likely enable a North Dakota taxpayer to enjoy the benefits of this new credit. You should check with your tax advisor to determine how the credit would apply to your situation.