Tax credits through a state initiative that encourages donating are still available.
Iowa Gov. Kim Reynolds on June 30 signed off on the 2021 state budget, which includes $6 million for 2021 Endow Iowa tax credits. As of July 13, $3 million of those 25% tax credits had already been spoken for by Iowa donors.
“This means not only is it important to make a gift, but also to fill out and return your Endow Iowa application as quickly as possible,” said Pat Henricksen, LincolnWay Community Foundation Executive Director.
Henricksen said after the Endow Iowa tax credit and the federal charitable deduction is applied, a gift of $1,000 to an endowment fund costs a donor in the 35% tax bracket $487.50. Starting in 2020, taxpayers who do not itemize will be allowed to deduct up to $300 in charitable donations.
The Endow Iowa state tax credit applies to gifts of $50 or more made to endowed funds at accredited community foundations like the Community Foundation of Greater Dubuque.
“Thanks to the LincolnWay Community Foundation’s affiliation with Greater Dubuque, gifts to our endowed funds are also eligible for the 25% credit,” said Henricksen. “We hold endowments for nonprofits throughout rural Clinton County and can accept most any asset, including gifts of cash, stock, insurance, gifts of grain and charitable IRA rollovers.”
Credits are given on a first-come, first-served basis until remaining 2021 tax credits are claimed. At that time, qualified donors will be eligible and first in line for 2022 credits. Qualified donors can carry forward the tax credit for up to five years after making the donation.
In 2020, LincolnWay Community Foundation endowment funds paid out $78,800 to support nonprofits across the region. These funds are invested and paid out annually to designated nonprofits, providing a reliable source of income to sustain organizations’ operations forever.
“The State of Iowa is recognized as a national leader in community-based philanthropy, due in large part to programs focused on increasing charitable activity to enhance quality of life for Iowans, supporting nonprofit infrastructure, and meeting local needs,” Henricksen said.
The Endow Iowa Tax Credit program is implemented through local community foundations across the state.
“These funds help to sustain the crucial missions of nonprofits in rural Clinton County so they can continue to enrich lives in our region forever,” said Henricksen. “Each fund is unique to a donor’s dreams for the future of our region.”
For more information, visit dbqfoundation.org/endowiowa