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Endow Iowa allows taxpayers to receive a 20% Iowa tax CREDIT in addition to the normal state and federal charitable income tax deductions for certain charitable gifts. The legislature has appropriated over $3,000,000 in Iowa tax credits.
The charitable gifts must be made:
- To a permanent endowment fund (can be a donor advised fund) which limits gifts to 5%
- In a “qualified” community foundation (the Greater Des Moines Community Foundation is a qualified community foundation)
- For the benefit of one or more Iowa charitable causes
- By individuals, corporations, or financial institutions
This is an exciting program that benefits both donors and charities. Here is a brief approximation
of the net after tax costs of establishing a fund:
Cash Gift (examples of different gift amounts) $ 1,000* $10,000**
Less tax benefits:
- Net Federal/state tax savings - 330 - 3,300 (approximated assuming maximum tax bracket)
- Endow Iowa Tax Credit - 200 - 2,000 (before Federal tax effect)
- Net cost of contribution $ 470 $ 4,700
All donors should consult with their tax advisors to review their individual circumstances.
*Give to an existing qualified Endow Iowa Fund
**Start your own qualified Endow Iowa Fund
Gift of appreciated assest: The net cost could be even lower if capital gain taxes and/or alternative minimum taxes are avoided.
Tax credits of 20% of the gifted amount are limited to $100,000 per person or $200,000 per couple
if both are Iowa taxpayers.
Eligible gifts will qualify for credits on a first-come-first-serve basis until the yearly appropriated limit is reached. If the current year Endow Iowa Tax Credits have been awarded, qualified donors will be eligible for the next year Endow Iowa Tax Credits.
You should act sooner versus later!
Please Note: All qualified donors have 5 years to use their Endow Iowa Tax Credits
This is a great way to support your philanthropic interests in Greater Des Moines now and in the future. Please feel free to give us a call with any questions you may have on this new philanthropic opportunity created by the Iowa legislature.
For more information, please contact:
Kaye Lozier,
Director of Development
515.883.9505
lozier@desmoinesfoundation.org
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