Montana Endowment Tax Credit

The Montana Charitable Endowment Tax Credit was originally enacted in Montana in 1997 and offers an incentive through a tax credit to individuals and businesses making a donation to a qualified endowment. The Providence Montana Health Foundation Endowment is a qualified endowment under Montana Code Annotated 2017. An endowment is a fund held by a tax-exempt organization where the principal of the fund is not wholly expendable. Only the interest and appreciation earned in an endowment fund can be used.

Endowments are established to help Montanans meet long-term needs in our communities for education, social services, health care, economic development, the arts and more.

Current Law Summary

The law is set to expire on December 31, 2019. The law provides for:

Planned Gifts - Credit against state income tax liability in the amount of 40% of the present value of any planned gift to a permanent endowment of a Montana charity up to a maximum amount of $10,000 per year per taxpayer.

*Applies to individual or business entity taxpayers.

Outright Gifts - Credit against state income tax liability in the amount of 20% of the present value of any outright gift by a business entity to a permanent endowment of a Montana charity up to a maximum of $10,000 per year per taxpayer.

*Applies to corporations, small business corporations, partnership or limited liability company taxpayers.

A few reasons to consider a planned gift and access the Montana Endowment Tax Credit:

  1. The Endowment Tax Credit can raise Montana revenue. A endowment tax credit is a one time credit offered primarily for a "planned gift." A planned gift is a type of gift vehicle which can significantly increase the spendable (and thus taxable) income of the taxpayer each year for the remainder of his or her lifetime.
  2. The Endowment Tax Credit keeps otherwise spent federal capital gains tax dollars in Montana. A "planned gift" can avoid federal capital gains tax which may cost Montana taxpayers up to 20% of the gain on the sale of appreciated assets.
  3. The Endowment Tax Credit keeps future federal estate tax dollars in Montana. A "planned gift" may avoid future federal estate tax dollars which can cost Montana taxpayers up to 40% of the amount used to fund the planned gift.
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