Schedule QEC: Schedule QEC - Qualified Endowment Fund Tax Credit (2024)
North Dakota · ND Tax Commissioner · Used for tax years 2024
North Dakota Schedule QEC calculates the qualified endowment fund tax credit for businesses and fiduciaries. It reports contributions to qualified endowment funds, the credit on current-year contributions, and allowable unused credits carried over from prior years.
Who files this form
Schedule QEC is for partnerships, corporations, estates, and trusts claiming the North Dakota income tax credit for charitable contributions to a qualified endowment fund.
Estates, trusts, and C corporations also use the 2024 schedule to claim allowable unused credits carried over from the 2021, 2022, or 2023 tax years.
Attach Schedule QEC to Form 38, 40, 58, or 60, as applicable.
What you'll need
Have the following ready:
- Your taxpayer name as shown on the return and federal employer identification number.
- The name and address of each qualified endowment fund and the total contributed to each during the 2024 tax year.
- A letter or other documentation received from each fund. Attach a copy showing the fund’s name, the date and amount of contributions, and a statement that it meets the qualified endowment fund criteria under N.D.C.C. § 57-38-01.21.
- For an estate, trust, or C corporation claiming a carryover, the allowable unused credit amounts from the 2021 through 2023 tax years.
How to file
Attach the completed 2024 Schedule QEC to Form 38, 40, 58, or 60.
- In Part 1, list each qualified endowment fund, its address, and your total 2024 contributions. Fill in the circle in column (c) if the fund is held by a qualifying border state organization.
- Add the contributions on line 2. On line 4, enter the smaller of that total or the $25,000 limit on line 3.
- Multiply line 4 by 40% to calculate the current-year credit on line 5.
- On line 6, estates, trusts, and C corporations enter allowable unused credit carried over from 2021 through 2023. Partnerships and S corporations enter zero.
- Add lines 5 and 6 and enter the total on line 7.
If an estate, trust, or C corporation is only claiming a carryover from 2021, 2022, or 2023, skip lines 1 through 5 and go to line 6.
Transfer line 7 to the applicable return:
- Form 38: Schedule 38-TC, line 12a.
- Form 40: Schedule TC, line 15, or Schedule CR, Part III, line 15.
- Form 58: Schedule K, line 14a.
- Form 60: Schedule K, line 11a.
Attach the required documentation from each fund.
Common mistakes
- Using the same contribution for another credit. A contribution used for this credit cannot also be the basis for another income tax credit.
- Missing the taxable-income adjustment. If the contribution reduced federal taxable income, it must be added back to North Dakota taxable income to that extent. This applies to any tax year in which it reduced federal taxable income. Estates, trusts, and C corporations should see the instructions for Form 38, Tax Computation Schedule, line 2, or Form 40, Schedule SA, line 5.
- Omitting partnership or S corporation reporting. Report Schedule QEC line 4 on Form 58, Schedule K, line 14b, or Form 60, Schedule K, line 11b.
- Entering a carryover on line 6 for a partnership or S corporation. These entities must enter zero.
- Forgetting the border state indicator or supporting documentation. Mark column (c) when applicable and attach the required letter or other documentation from each fund.
Questions people ask
What is a qualified endowment fund?
It is a permanent, irrevocable fund held by a qualified nonprofit organization. It must consist of cash, securities, mutual funds, or other investment assets and be established for a specific religious, educational, or other charitable purpose. It may spend only the income generated by, or the increase in value of, contributed assets.
How much is the credit?
The credit is 40% of eligible contributions. The maximum credit for direct contributions made during a tax year is $10,000 for an estate, trust, partnership, or corporation.
Can unused credit be carried forward?
Yes. An otherwise allowable unused credit may be carried over for up to three tax years. For 2024, line 6 allows estates, trusts, and C corporations to report allowable carryovers from 2021 through 2023. For estates and trusts, this applies only to the entity’s allocable portion. Partnerships and S corporations enter zero on line 6.
How is the credit shared with beneficiaries, partners, or shareholders?
For an estate or trust, the credit is determined at the entity level and allocated between the entity and its beneficiaries in proportion to their allocated income. For a partnership or S corporation, the credit is determined at the entity level and passed through to partners or shareholders based on their respective interests in the entity.