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This tax credit is available to Montana residents that make a planned gift to a qualified charitable organization that will ultimately go to a permanent endowment. Easterseals-Goodwill is a qualified charitable organization.

Planned gifts that are eligible for the Montana Endowment Tax Credit are:

  • Charitable Gift Annuity
  • Deferred Charitable Gift Annity
  • Charitable Remainder Trust
  • Charitable Lead Trust
  • Paid-up life Insurance
  • Charitable Life estate

This is a tax credit to be applied against your Montana income tax liability, reducing your state tax liability dollar for dollar. The credit is calculated as 40% of charitable portion of the gift, up to a maximum of $10,000, per individual. Spouses can each utilize the full credit for a total of $20,000 in a tax year.

An example: If a single person, age 75, enters into a charitable gift annuity of $25,000. He will receive a lifetime annuity of $1,450 per year. The charitable portion of his gift would be calculated as $11,066 (which would be the tax deduction amount for Federal income tax purposes) and the Montana Endowment Tax Credit would be:

11,066 x 40% = $4,426.20 Montana Income Tax Credit

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. Under the statute you are required to hold an income interest for five (5) years from the date of the gift.

 

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If you’re unsure whether your item qualifies for a tax deduction, then consider this: if you would give it to a relative or friend, then the item is most likely in good condition and is appropriate to donate. For a guide to help with values check out these IRS Donation Guidelines.

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