The Montana Qualified (Endowment) Tax Credit was originally enacted by the Montana Legislature in 1997 and renewed in 2001, 2007, 2013, and 2019. Montana is one of only four states to provide an endowment tax credit program, which is meant to to encourage individuals, businesses and organizations to make lasting investments in their communities by giving to qualified endowments in Montana. Because of this tax credit, more than $130 million has been gifted to Montana endowments.
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 for current operations. Endowments are established to help Montana nonprofits meet long-term needs in our communities for education, social services, health care, economic development, the arts and more.
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. ($20,000 for joint filers). Individuals and joint-filing taxpayers are required to convey their gifts through a planned gift. Gift annuities, charitable trusts and estate gifts all fall under the definition of a planned gift. Charitable gift annuities, in most cases easily established, are the most often-used planned gift for this purpose.
*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.
*Applies to corporations, small business corporations, partnership or limited liability company taxpayers.
The statutes governing the Charitable Endowment Tax Credit are found at 15-30-2327 through 15-30-2329, 15-31-161 and 15-31-162. The relevant Administrative Rules of Montana are found at 42.4.2701, and 42.4.2703 through 42.4.2708. Links to some of the statutes are provided below.
- MCA 15-31-161 – Business credit for contribution by corporations to qualified endowment — recapture of credit — deduction included as income.
- MCA 15-30-2327 – Qualified endowments credit — definitions — rules.
- MCA 15-30-2328 – Individual credit for contributions to qualified endowment — recapture of credit — deduction included as income.
For more information about the Tax Credit, visit the Montana Department of Revenue website.
Montana Endowment Contacts
These organizations have specific Montana Endowment Tax Credit resources and experts to support donors and nonprofit leaders: