Schedule 38-TC: Schedule 38-TC - Tax Credits (2025)
North Dakota · ND Tax Commissioner · Used for tax years 2025
North Dakota Schedule 38-TC reports tax credits earned or received by an estate or trust for 2025 and attaches to Form 38. It shows the total credits and the amounts retained by the estate or trust or 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.
Use the 2025 schedule to report credits earned or received by the estate or trust, including amounts allocated to beneficiaries.
What you'll need
The attachments you need depend on the credits claimed:
- Required credit schedules: Schedule RZ for renaissance zone credits; Schedule ECC for employer child care contributions; Schedule ME for wages paid to a mobilized employee; Schedule QEC for endowment fund credits; and Schedule MCP for maternity home, child placing agency, or pregnancy help center credits.
- Supporting records: If no official schedule is specified, attach documentation showing eligibility and how the credit was calculated, including any unused credit carried over.
- Credits received from another entity: Attach the North Dakota Schedule K-1 for credits received from an estate, trust, partnership, S corporation, or qualifying limited liability company.
- Investment credits: Attach the reporting form received from the certified business for agricultural commodity processing facility or seed capital investments.
- Employment credits: Internship credits require a schedule of employee names, Social Security numbers, and wages. Workforce recruitment and apprentice credits also require employment start dates. For these credits received through a passthrough entity, attach its statement. The internship and apprentice compensation entries use 2025 Forms W-2.
- Disability employment credit: Attach the Human Services certification letter unless the credit comes from a North Dakota Schedule K-1.
- Property tax clearance: When required, attach a completed Property Tax Clearance Record from each North Dakota county where the estate or trust holds at least a 50% ownership interest in real property. The record form is available at www.tax.nd.gov.
How to file
- Enter the estate or trust’s name as shown on the return and its federal employer identification number.
- Enter each credit on its applicable line, including both the amount retained by the estate or trust and any amount allocated to beneficiaries. Follow the credit-specific limits.
- Complete the property tax clearance section if claiming a credit identified in that section.
- Calculate the total on line 21 using the lines listed on the form.
- Enter the retained amount on line 22a and on Form 38, page 1, line 3. Enter the amount allocated to beneficiaries on line 22b and report the beneficiaries’ shares on their Schedule K-1 (Form 38) forms.
- Attach Schedule 38-TC and the required supporting documents to Form 38.
The supplied text does not give a mailing address or e-filing directions.
Common mistakes
- Skipping property tax clearance: All taxpayers must read this section. Complete it if claiming a credit on line 1, 2, 3, 4, 5, 6a, 7a, 7b, 9a, or 14a, and attach required county records. Automation credit carryovers originating in 2023 or later also require clearance records.
- Leaving out beneficiary allocations: Report the total credit on the applicable credit line, even when part is allocated to beneficiaries. Also report the allocated amount on line 22b.
- Putting transferred research credits on line 7a: Research credits obtained through a sale, assignment, or transfer in 2025 belong on line 7b.
- Using expired investment credit carryovers: On the 2025 return, agricultural commodity processing investment credits from investments before 2015 and seed capital credits from investments before 2021 may not be claimed.
- Misplacing an endowment credit carryover: Enter unused endowment fund credit from a prior year on the 2025 Schedule QEC, line 6.
Questions people ask
Can the estate or trust allocate credits to beneficiaries?
Yes. Report allocated credits on line 22b and on the beneficiaries’ Schedule K-1 (Form 38) forms. Include those amounts on the applicable credit lines as well.
Can unused credits be carried forward?
It depends on the credit. Follow the specific credit’s rules. For example, employer child care contribution credits and maternity home, child placing agency, or pregnancy help center credits have no carryover provision. Apprentice credits have no carryback or carryforward provision.
Can an estate or trust keep a private school contribution credit?
If it earned the credit by contributing directly to a qualifying school, it must allocate the entire credit to beneficiaries. If it received the credit through a passthrough entity, it may retain part or all of it, subject to the stated limits.
Are property tax clearance records required for every automation credit carryover?
No. Records are required for carryovers originating in 2023 or later. They are not required for automation credit carryovers from tax years 2019 through 2022.