Schedule 38-TC: Schedule 38-TC - Tax Credits (2024)
North Dakota · ND Tax Commissioner · Used for tax years 2024
North Dakota Schedule 38-TC reports tax credits earned or received by an estate or trust for 2024 and is attached to Form 38. It shows the total credits, the amount retained by the estate or trust, and the amount allocated to beneficiaries.
Who files this form
A fiduciary claiming an income tax credit for an estate or trust must complete Schedule 38-TC and attach it to Form 38. This requirement does not apply to the credit for income tax paid to another state or local jurisdiction.
Report the total credit earned or received by the estate or trust, even if part of the credit is allocated to beneficiaries.
What you'll need
Gather documentation for each credit you claim. If no official schedule is specified, attach records showing eligibility, how the credit was calculated, and any unused credit carried over from another tax year.
Depending on the credit, required attachments include:
- Schedule RZ for the renaissance zone credit.
- Schedule ME for wages paid to a mobilized employee.
- Schedule QEC for the endowment fund credit.
- Schedule MCP for the maternity home, child placing agency, or pregnancy help center credit.
- North Dakota Schedule K-1 for credits received from an estate, trust, partnership, S corporation, or an LLC treated as a partnership or S corporation.
- Investment reporting forms received from the certified business for agricultural commodity processing facility and seed capital investment credits.
- Employee schedules listing names, Social Security numbers, and wages for internship, workforce recruitment, and apprentice credits. Workforce recruitment and apprentice schedules must also list employment start dates. For these credits received through a passthrough entity, attach its statement.
- Human Services certification letter for the credit for hiring an individual with a developmental disability or mental illness, unless the credit comes from a North Dakota Schedule K-1.
For credits subject to property tax clearance, attach a completed Property Tax Clearance Record from each North Dakota county where the estate or trust owns a 50% or greater interest in real property. The record form is available at www.tax.nd.gov.
How to file
Attach the completed 2024 Schedule 38-TC and required supporting documents to Form 38.
- Enter the estate or trust's name and federal employer identification number.
- Enter each credit on its applicable line, including any portion allocated to beneficiaries.
- Complete the property tax clearance section if claiming a credit on line 1, 2, 3, 4, 5, 6a, 7a, 7b, 8, 9a, or 14a. Attach any required county clearance records. A clearance record is also required for automation credit carryover originating in 2023.
- Add the credit lines specified on line 21.
- Enter the amount retained by the estate or trust on line 22a and on Form 38, page 1, line 3.
- Enter the amount allocated to beneficiaries on line 22b and report their shares on their Schedule K-1 (Form 38) forms.
Common mistakes
- Leaving out credits allocated to beneficiaries. Enter the total credit on the applicable credit line, then also report the allocated portion on line 22b.
- Skipping property tax clearance. Complete that section when claiming one of the credits identified in its box, and attach required county records.
- Putting a research credit acquired from another taxpayer in 2024 on line 7a. Credits obtained through a sale, assignment, or transfer in 2024 belong on line 7b.
- Using line 8 for an ineligible angel fund credit. This line is only for unused credits attributable to investments in angel funds organized and certified before July 1, 2017.
- Entering an endowment credit carryover in the wrong place. Enter unused endowment fund credit from a prior tax year on 2024 Schedule QEC, line 6.
- Completing employee count and compensation lines for K-1 credits. Disregard lines 6b and 6c, 9b and 9c, or 20b and 20c when the corresponding credit comes from a North Dakota Schedule K-1.
Questions people ask
Can an estate or trust keep a nonprofit private school contribution credit?
If the estate or trust makes the contribution directly, it must allocate the entire credit to its beneficiaries. If it receives the credit through a passthrough entity, it may retain part or all of it, subject to the stated limits.
Does every automation credit carryover require property tax clearance?
No. A Property Tax Clearance Record is required for carryover originating in 2023. It is not required for automation credit carryover from tax years 2019 through 2022.
Can unused apprentice credit be carried to another year?
No. There is no carryback or carryforward for amounts exceeding the taxpayer's tax liability for the taxable year.
Can I claim a geothermal energy device credit on the 2024 schedule?
Complete line 10 only if the qualifying device was installed on or after January 1, 2009, and before January 1, 2015; the estate or trust retained part or all of the allowable credit; and it is carrying unused credit from that installation into the 2024 tax year.