The 2023 tax season is over, but there’s no time like the present to plan ahead for 2024.
One direction to consider: The Montana Charitable Endowment Tax Credit, or METC, encourages gifts to qualified endowments that forever benefit Montana nonprofit organizations and local communities.
The Montana Community Foundation offers guidance on how to qualify for the METC. The foundation has seasoned staff members who help donors execute planned gifts and lower their state income tax liability in the process.
How does this win-win scenario play out?
“This tax credit is a phenomenal opportunity for donors,” said Mary K. Rutherford, the Montana Community Foundation’s president and CEO. “It is really a pretty simple program on the surface. If I’m a Montana taxpayer, I can contribute to a permanent endowment that helps the communities and causes I care about. That donation is there in perpetuity, and you get the extra bonus of a reduction in your state income tax liability.”
Major tax benefits
The METC allows for 40% of a planned contribution — the figure is 20% for donations from businesses — to be applied as a state income tax credit. The maximum donation under the credit is $15,000 for business and individuals and $30,000 for couples.
To be eligible, donors must pay income tax in Montana, and donations must benefit a 501(C)(3) organization.
Rutherford noted that all the organizations with funds at the Montana Community Foundation meet the criteria required for the credit.
“Our organization works with about 1,400 distinct funds,” Rutherford said. “This is what we do all day every day. We have philanthropy officers and a finance team to make sure donors get their maximum tax benefit while supporting a cause, or causes, that are meaningful to them.”
Building a better Montana
For many donors, the maximum donation figures for the tax credit may seem out of reach. But every donation to the Montana Community Foundation, regardless of size, can help the state and its residents thrive — and offer tax relief.
“A planned gift certainly doesn’t have to be at that maximum figure to make a difference,” Rutherford said. “A gift of $2,500, when bundled with everyone else’s generosity, can go a long way to supporting local communities and programming.”
The Montana Community Foundation works with nearly 50 community foundation affiliates that support smaller towns and some of the state’s larger cities. Donations to those foundations, through the Montana Community Foundation, allow regions to address their areas of need. One example Rutherford offered is a community foundation that uses donations to help boost teacher salaries.
Other causes that donors to the Montana Community Foundation often support include arts and culture and direct human services.
“We have been doing this for 35 years,” Rutherford said. “We ensure our donors’ gifts are going to causes that speak to them, supporting programming they care about.”
Click here to learn about giving with the Montana Community Foundation.
