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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 $300 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.
- Gifts can be made to an existing permanent endowed fund or one that you establish. The gift must benefit one or more Iowa charitable causes.
- Effective January 1, 2023, tax credits of 25% of the gifted amount are limited to $100,000 in tax credits per individual for a gift of $400,000 or $200,000 in tax credits per couple for a gift of $800,000 if both are Iowa taxpayers.
- Eligible gifts will qualify for credits on a first-come, first-served basis until the yearly appropriated limit is reached.
- Effective July 1, 2023, there will be no waitlist for Endow Iowa Tax Credits. Only applications received on or before June 30, 2023 will be added to a wait list to receive tax credits in 2024.
- Beginning July 1, 2023, applications must be submitted within twelve months of the date of the gift.
- 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
With Endow Iowa, contributions to the Community Foundation cost donors less. Here is what a gift could mean for you:
|Endow Iowa Tax Credit (%25%)||(250.00)||(2,500.00)||(25,000.00)||(200,000.00)|
|Net Federal Deductible Gift||$750.00||$7,500.00||$75,000.00||$600,000.00|
|Federal Tax Savings (37%)*||(277.50)||(2,775.00)||(27,750.00)||(222,000.00)|
|Net Cost of Gift||$472.50||$4,725.00||$47,250.00||$378,000.00|
*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.