Reduce your state income tax liability dollar-for-dollar
Did you know that the State of Montana rewards generosity? Did you also know that the state legislature just increased the value of that gift? The Montana Endowment Tax Credit has been increased to $15,000 per taxpayer for qualified gifts made after January 1, 2024. The tax credit reduces the donor’s state income tax liability dollar-for-dollar. Donations that qualify for the tax credit need to be made to an endowment fund at an organization domiciled in Montana and the gift needs to be made using a planned giving instrument. Read more about planned giving instruments. Here are a couple of examples to consider.
Example #1
Joe and Mary make a $30,000 gift to their favorite qualified charity. Assuming they use the most advantageous planned giving instrument to make the donation, the Montana Endowment Tax Credit is approximately $12,000. If their Montana income tax liability is $14,000, they will only need to send $2,000 ($14,000 – $12,000 = $2,000) to the Department of Revenue on April 15, 2025.
Example #2
Susan had a $4,000 state income tax liability in 2023. She just learned that she could zero out that liability if she used the Montana Endowment Tax Credit so she decides to make gifts totaling $10,000 to her favorite charitable organizations in Montana that have endowments.
If you are curious about how you might take advantage of the Montana Endowment Tax Credit or simply want to learn more about maximizing your tax advantages through planned giving, we invite you to contact our St. John’s Foundation Gift Planner at giving@stjohnsunited.org.
Written by:
Rachel E. Simonson, CFP®
St . John’s Foundation Gift Planner
giving@stjohnsunited.org
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