Tax Savings Through an Accredited Foundation
The Community Foundation of Northeast Iowa is proud to be able to offer the Endow Iowa 25% State Tax Credits for gifts made to permanent endowment funds that benefit Iowa charitable causes. Endow Iowa Tax Credits allow donors to have an even greater impact on their philanthropic interests in Iowa now and into the future. When you donate to a permanently endowed fund you’re not only helping your neighbors today, you’re building a stronger community tomorrow.
2023 Endow Iowa Tax Credits
Due to the generosity of donors across Iowa, 2023 credits available through the Endow Iowa 25% state tax credit program have been expended (as of March 31, 2022). Endow Iowa eligible gifts will now be placed on a waiting list to receive a 2024 credit. Tax credits are issued on a first come, first served basis. Donors have five years to carry-forward the credit. If you have any questions, please call our office at 319-287-9106.
How It Works
- A variety of gifts qualify for Endow Iowa Tax Credits including cash, real estate, appreciated securities and outright gifts of retirement assets.
- Only gifts to qualified permanent endowment funds benefiting Iowa charitable causes are eligible to receive the tax credits.
- Tax credits of 25% of the gifted amount are limited to $300,000 in tax credits per individual for a gift of $1.2 million or $600,000 in tax credits per couple for a gift of $2.4 million if both are Iowa taxpayers.
- Eligible gifts will qualify for credits on a first-come/first-serve basis until the yearly appropriated limit is reached, currently $6 million. If the current available Endow Iowa Tax Credits have been awarded, qualified donors will be eligible for the next year's Endow Iowa Tax Credits. The Community Foundation encourages donors to act early in the year to ensure they receive Endow Iowa credits.
- All qualified donors can carry forward the tax credit for up to five years after the year the donation was made.
- Effective August 28th, 2018, taxpayers who receive Endow Iowa Tax Credits and itemize on their federal tax return will be required to reduce their federal charitable deductions by the value of any state tax credit received. There is an opportunity to deduct the full value of the gift if you have not reached the $10,000 SALT cap. We recommend consulting with your tax professionals.
- For example, a taxpayer that makes a $100 charitable donation to Endow Iowa would receive a $25 (25%) state tax credit. When filing federal taxes, the taxpayer cannot deduct the entire $100 charitable donation like in the past, but only the difference between the donation and the state tax credit, or $75 in this example.
We encourage donors to consult with tax advisors to review their individual circumstances and learn how they can take advantage of this unique opportunity.
*The Community Foundation of Northeast Iowa is confirmed in compliance with National Standards for U.S. Community Foundations.
What does it really cost to give?
|Cash gift to qualified endowment fund||$1,000||$10,000||$100,000||$1,200,000|
|Endow Iowa Tax Credit (25%)||($250)||($2,500)||($25,000)||($300,000)
|Net Federal Deductible Gift||$750||$7,500||$75,000||$900,000|
|Federal tax savings*||($277.50)||($2,770)||($27,750)||($333,000)|
|Net cost of gift||$472.50||$4,725||$47,250||$567,000|
* The above illustration assumes an individual or married couple is in the 37% federal tax bracket.