Schedule ND-1QEC: Schedule ND-1QEC - Qualified Endowment Fund Tax Credit (2025)
North Dakota · ND Tax Commissioner · Used for tax years 2025
North Dakota Schedule ND-1QEC calculates an individual's qualified endowment fund tax credit for 2025 and is attached to Form ND-1. It reports qualifying contributions, credit carryovers, and any related adjustment to North Dakota taxable income.
Who files this form
Use Schedule ND-1QEC with Form ND-1 to claim the qualified endowment fund tax credit for 2025 or an allowable unused credit from 2022, 2023, or 2024.
An individual may claim the credit for one or more charitable contributions totaling at least $5,000 to a qualified endowment fund. The $5,000 minimum applies separately to each fund, not to all donations combined.
A qualified endowment fund must be permanent and irrevocable, serve a specific religious, educational, or other charitable purpose, and meet the fund and nonprofit organization requirements listed in the schedule. Not every charitable donation qualifies.
What you'll need
Have the following information ready:
- Your name as shown on your return and your Social Security number.
- The name, address, and total 2025 contributions for each qualified endowment fund to which you contributed at least $5,000.
- Whether each listed fund is held by a qualifying border state organization.
- The allowable unused credit from contributions made in 2022 through 2024, if any.
- If you itemized federal deductions, your 2025 Schedule A and the federal standard deduction you would have been allowed. The schedule refers you to the 2025 Form 1040 or 1040-SR instructions for line 12e.
- Any amount included in your contributions that was transferred directly from an IRA under the provision described in the schedule.
Attach 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.
How to file
Attach Schedule ND-1QEC to your 2025 Form ND-1. Also attach the required letter or other documentation confirming that the nonprofit organization and endowment fund meet the statutory requirements.
Enter the credit used for 2025 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, unless the schedule directs you to use the Form ND-1 instructions instead.
The supplied text does not provide a mailing address or e-filing directions.
Common mistakes
- Combining donations to different funds to reach $5,000. Each fund must separately receive at least $5,000 from you during 2025. Do not list funds that fall below that minimum.
- 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 the full available credit on line 8 when you cannot use it all. Enter only the amount used to reduce your 2025 tax.
- Carrying a 2022 credit into 2026. Line 9 allows unused credits based on contributions made in 2023 through 2025 to be carried into 2026.
- Completing lines 1 through 5 when you only have a carryover. If you are only carrying over unused credit from 2022, 2023, or 2024, skip those lines and start at line 6.
- Overlooking the special income-adjustment directions. If line 5 has an amount and you also claim 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, see the instructions for Form ND-1, line 2.
Questions people ask
How is the 2025 credit calculated?
The credit is 40% of eligible contributions. To calculate eligible contributions, use the smaller of your total qualifying contributions or $50,000 if married filing jointly, or $25,000 otherwise.
Can several smaller gifts to the same fund qualify?
Yes. One or more contributions to the same qualified fund can qualify if they total at least $5,000 during 2025. The schedule gives an example of $500 contributed each month, totaling $6,000, with the entire $6,000 qualifying.
What happens if I cannot use all of the credit in 2025?
The unused portion may be carried forward for up to three years. Line 9 reports unused credit based on contributions made in 2023 through 2025 that is being carried into 2026.
What if I did not itemize federal deductions?
If you did not complete and attach Schedule A to your 2025 Form 1040 or 1040-SR, skip lines 10 through 12 and go to line 13.
How does a direct 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 to North Dakota taxable income.