Schedule ND-1QEC: Schedule ND-1QEC - Qualified Endowment Fund Tax Credit (2024)
North Dakota · ND Tax Commissioner · Used for tax years 2024
North Dakota Schedule ND-1QEC calculates the qualified endowment fund tax credit for individuals and is attached to Form ND-1. It reports qualifying contributions, credit carryovers, the credit used for 2024, and any related adjustment to North Dakota taxable income.
Who files this form
Use Schedule ND-1QEC to claim the qualified endowment fund tax credit as an individual who made one or more charitable contributions totaling at least $5,000 to a qualified endowment fund during tax year 2024.
The $5,000 minimum applies separately to each fund. The fund must meet the qualified endowment fund requirements stated in the form.
You may also use this schedule to claim an allowable unused credit from contributions made in 2021, 2022, or 2023. If you are only carrying over unused credit from those years, skip lines 1 through 5 and start on line 6.
What you'll need
- A letter or other documentation from the qualified nonprofit organization holding the fund, stating that both the organization and the fund meet N.D.C.C. § 57-38-01.21. Attach this documentation.
- Your name as shown on your return and Social Security number.
- Each qualifying fund’s name, address, total contributions for 2024, and whether it is held by a border state organization.
- Information about any allowable unused credit from 2021 through 2023.
- If you itemized federal deductions, your 2024 Schedule A and the federal standard deduction you would have been allowed. The form refers you to the 2024 Form 1040 or 1040-SR, line 12 instructions for that deduction.
- The amount of any qualifying contribution made through a trustee-to-donee transfer from an IRA, if applicable.
How to file
Attach Schedule ND-1QEC to Form ND-1. Also attach the required letter or other documentation confirming that the nonprofit organization and fund meet the statutory requirements.
Enter the credit used for 2024 from Schedule ND-1QEC, line 8, on Schedule ND-1TC, line 15a. Enter the taxable income adjustment from line 16 on Form ND-1, line 2.
If you have an amount on line 5 and are also claiming a planned gift credit on Schedule ND-1PG, line 7, or an endowment fund credit from a North Dakota Schedule K-1, do not complete lines 10 through 16. Instead, follow the instructions to Form ND-1, line 2.
Common mistakes
- Combining gifts to different funds to meet the minimum. Each fund must receive at least $5,000 during 2024. Do not list funds that received less than that amount.
- Using the same contribution for another North Dakota credit. A contribution used for this credit cannot also be the basis for another North Dakota income tax credit.
- Entering all available credit on line 8 when only part is used. Enter only the amount used to reduce tax on the 2024 return.
- Carrying a 2021 contribution-based credit into 2025. Line 9 allows carryover to 2025 only for unused credit based on qualifying contributions made in 2022 through 2024.
- Completing the wrong adjustment lines. If you have a credit on line 5 and also claim the specified planned gift or Schedule K-1 endowment fund credit, skip lines 10 through 16 and consult the Form ND-1, line 2 instructions.
Questions people ask
Can several smaller gifts to the same fund qualify?
Yes. One or more contributions to the same qualified endowment fund can qualify if they total at least $5,000 during 2024. The form gives an example of monthly $500 gifts totaling $6,000, with the entire $6,000 qualifying.
How is the 2024 credit calculated?
The credit is 40% of the eligible contribution amount. That amount is the smaller of your total qualifying contributions on line 2 or $50,000 if married filing jointly, or $25,000 otherwise.
What happens if I cannot use the entire credit?
The unused portion may be carried forward for up to three years. For carryover to tax year 2025, line 9 includes unused credit based on qualifying contributions made in 2022 through 2024.
How does a qualifying IRA transfer affect North Dakota taxable income?
If line 2 includes a qualifying trustee-to-donee IRA transfer, enter that amount on line 13. To the extent those transferred funds are the basis for this credit, they must be added back into North Dakota taxable income.