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Endow Iowa Tax Credit
Make an even greater impact
Endow Iowa Tax Credits allow donors to have an even greater impact. As affiliates of the Omaha Community Foundation, the Community Foundations of Southwest Iowa can access Endow Iowa Tax Credits, where donors may receive a 25% Iowa tax credit for gifts made to permanent endowment funds that benefit Iowa charitable causes. Since 2003, Endow Iowa Tax Credits have leveraged over $239 million in permanent endowment fund gifts at community foundations across the state.
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.
- 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.
- Effective January 1, 2023, the maximum annual credit allowance will be reduced to $100,000 per taxpayer and $200,000 per couple (from $300,000 per taxpayer and $600,000 per couple). Credits are not transferable or refundable.
- Only gifts to qualified permanent endowment funds benefiting Iowa charitable causes are eligible to receive the tax credits.
- Eligible gifts will qualify for credits on a first-come, first-served basis until the yearly appropriated limit is reached. If the current available Endow Iowa Tax Credits have been awarded, qualified donors will be placed on a waitlist for the next year’s Endow Iowa Tax Credits.
- All qualified donors have five years to use their Endow Iowa Tax Credits.
- Effective August 28, 2018, taxpayers who receive Endow Iowa Tax Credits and itemize on their federal tax returns 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 state and local taxes (SALT) Cap. We recommend consulting with your tax professionals.
- For example, a taxpayer that makes a $1,000 charitable donation to Endow Iowa would receive a $250 (25%) state tax credit. When filing federal taxes, the taxpayer cannot deduct the entire $1,000 charitable donation like in the past, but only the difference between the donation and the state tax credit, or $750 in this example.
Endow Iowa Tax Credit Illustration
Gift Amount: $10,000
Endow Iowa Tax Credit (25%):($2,500)
Net Federal Deductible Gift: $7,500
Federal Tax Savings: ($2,775)*
Net Cost of Gift: $4,725
*For ease of illustration, the example above does not factor in the federal/state net tax effect. Example assumes the donor is in the 37% tax bracket.