QEC: Qualified Endowment Credit (2025)
Montana · Montana DOR · Used for tax years 2025
Montana Form QEC calculates the 2025 Qualified Endowment Credit for qualifying charitable gifts. It records contribution details, information about the organization or trustee holding the gift, and the credit amount.
Who files this form
Use Form QEC to claim Montana’s qualified endowment credit for 2025.
- Individuals: Your own contributions qualify only if they are planned gifts. You may also claim credit for qualifying contributions passed through to you by an entity.
- C corporations engaged in an active trade or business: Qualifying gifts may be outright contributions or planned gifts.
- Estates and trusts: Qualifying gifts may be planned gifts or outright contributions. Unused credit may be attributed to beneficiaries as described in the form.
- Partnerships, S corporations, and limited liability companies: Do not complete Form QEC. Pass contributions through to owners in the same proportion used to report the entity’s income or loss for Montana tax purposes. Report the contribution on Montana Schedule K-1 (PTE), Part 5, line 5.
Complete a separate Form QEC for each qualifying gift, including separate gifts made by spouses filing jointly.
What you'll need
Gather your name as shown on your Montana tax return, your FEIN or SSN, the contribution date, and the name and address of the organization, trustee, bank, or trust company identified in Part I.
Include a contribution receipt with Form QEC. It must come from the organization holding the endowment, the trustee administering the planned gift, or the Montana bank or trust company holding the endowment. The receipt must show:
- The allowable contribution amount.
- The date the contribution or planned gift was made.
- Confirmation that the contribution was placed in a permanent irrevocable fund.
- The name of the organization incorporated or established in Montana holding the fund, or the tax-exempt organization on whose behalf it is held.
- A description of the gift type.
For a charitable trust whose charity has not yet been named, also include the trust’s disposition clause showing that a qualified endowment fund has been created.
For a pass-through contribution, have your share of the contribution, the entity’s business name, and its FEIN available.
How to file
If you file a paper income tax return, include a copy of Form QEC and the contribution receipt with that return.
- Complete Part I with the receipt information, contribution date, and the name and address of the appropriate organization or trustee. Select only one entity category on line 3.
- For a planned gift, select the gift type on line 4. For an outright gift, skip to line 5.
- Complete only one column in Part II: Column A for a planned gift or Column B for an outright gift.
- On line 5, enter the present value of the charitable gift portion of the planned gift, or the outright charitable contribution amount. For a pass-through contribution, enter your share and the entity’s name and FEIN.
- Multiply line 5 by 40% for a planned gift or 20% for an outright gift. Do not enter more than $15,000 on line 7.
If you have multiple qualifying gifts, complete separate forms and combine the credit amounts on your income tax return, subject to the total credit limits.
Common mistakes
- Completing both calculation columns. Use only one. Individuals who are not receiving credit from a pass-through entity should use only Column A.
- Treating a Qualified Charitable Distribution as a planned gift. A QCD is an outright gift and does not qualify for the Montana endowment credit.
- Claiming both the credit and a Montana charitable deduction for the same contribution amount. Add back the entire amount deducted or excluded from income that was used to calculate the credit. You may deduct the portion not used to calculate the credit.
- Exceeding the limits or moving the credit to another year. The credit cannot exceed income tax liability, has no carryback or carryforward, and must be applied to the tax year when the contribution was made.
- Using one form for multiple gifts. Complete a separate Form QEC for each gift.
Questions people ask
What is a qualified endowment?
It is a permanent, irrevocable fund established for a specific charitable, religious, educational, or philanthropic purpose. It must be held by a Montana-formed tax-exempt 501(c)(3) corporation, or by a bank or trust company on behalf of a Montana or foreign 501(c)(3) organization. A building fund that accumulates contributions to be spent is not a permanent irrevocable fund.
What is the maximum credit?
An individual’s maximum is $15,000 for contributions from all sources in a year. Married couples filing jointly may claim up to $30,000 if both spouses separately make qualifying gifts. They may also claim up to $30,000 if each spouse separately receives pass-through credit in the same proportion used to report the entity’s Montana income or loss. The maximum for an estate or trust is $15,000. A C corporation’s credit cannot exceed the lesser of its corporate income tax liability or $15,000. The credit cannot exceed the taxpayer’s income tax liability.
What if I recover my charitable gift?
If you recover the gift in the current year, include the amount previously deducted as income to the extent it reduced your individual or corporate income tax. Also increase the tax due by the credit previously allowed.
Where can I ask questions?
Call (406) 444-6900, or Montana Relay at 711 for the hearing impaired.