MT Tax Credit
The Montana Income Tax Credit for Endowed Philanthropy
A brief guideline to the current Montana Qualified Endowment Credit law.
July 1, 2003 through December 31, 2019:
- Planned Gift – 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 Gift – 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.]
Success and Change
The 2013 Montana Legislature extended the Endowment Tax Credit through 2019. See Senate Bill SB-108
Originally enacted in 1997, the Montana Income Tax Credit for Endowed Philanthropy encourages charitable giving to qualified endowments by offering incentives to Montana taxpayers.
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 Montanans meet long-term needs in our communities for education, social services, health care, economic development, the arts and more.
For additional information, visit EndowMontana.
The Montana Department of Revenue Form QEC for claiming the Qualified Endowment Credit is available in PDF format; click on MT Form QEC .
Montana Code Annotated
Six Reasons Why the Endowment Tax Credit is Good for Montana
- The Endowment Tax Credit helps build charitable endowment. An Endowment is a permanent fund held by or for a Montana charity whereby only a portion of the fund is used to carry out the charity’s mission. Endowments help Montanans meet ongoing community needs.
- The Endowment Tax Credit helps “lesson the burden” of Montana Government. By strengthening Montana Endowments, charities are more capable of resolving social, educational, healthcare, and cultural problems.
- 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 often significantly increases the spendable (and thus taxable) income of the taxpayer each year for the remainder of his or her lifetime.
- 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. Beginning in 2013, a planned gift may avoid an additional 3.8% Medicare Surtax on all investment income, including capital gains, in excess of $200,000.
- 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.
- The Endowment Tax Credit saves Montanans federal income tax dollars. The Montana Tax Credit of Endowed Philanthropy encourages Montanans to be generous to Montana charities. Such giving generates meaningful income tax savings to the donor on both the state and federal levels.
Gifts to Yellowstone Foundation’s Endowment Fund are good for Montana,
good for donors, and good for children in need.
Visit our Planned Giving page or
call us at 1-800-879-0850 for more information.