Montana Endowment Tax Credit

The Montana Endowment Tax Credit allows donors to pay less in Montana state income taxes when they give a qualifying planned gift to a qualified Montana charitable endowment.

The incentive is 40% of the value of the gift, up to a maximum $10,000 tax credit in one year, and a credit of 20% of a direct gift by a qualified business, up to a maximum of $10,000 in one year.

Example:  A donor, 65, purchases a $10,000 charitable gift annuity in 2005 with a certificate of deposit that has matured.  As income beneficiary, the donor will receive 6.0% or $600 per year for life. The donor names the permanent endowment of a favorite Montana non-profit 501(c)(3) organization as the remainder beneficiary of the annuity.  Therefore, the donor is eligible for the Montana Endowment Tax Credit.  The federal charitable deduction for the gift is $3,553 and the qualifying amount of the Montana Endowment Tax credit is $1,421 or 40% of the present value of the planned gift.  (Assumes and IRS discount rate of 5%.)