Except where stated otherwise, the information provided here reflects the law in effect for tax years 2021 and after.
There are 3 income tax credits available to taxpayers for making a charitable contribution to nonprofit private schools in North Dakota:
- Contributions to a primary school (grades kindergarten through 8)
- Contributions to a high school (grades 9 through 12)
- Contributions to a college
If a contribution is made to a school network fund benefiting multiple eligible schools, or to an eligible school falling into both the primary school and high school categories, a statement must be obtained from the network or school identifying the eligible school and category to which the contribution is designated along with the amount contributed. If a statement is not obtained in the case of a contribution to an eligible school falling into the primary school and high school categories, one-half of the contribution will be deemed to have been made in each category.
Eligibility: A list of the eligible schools within each of the 3 categories of schools is provided in the instructions to Schedule ND-1PSC (individual), Schedule 38-TC (estate or trust), Form 58 (partnership), and Form 60 (S corporation). For a C corporation, the list is provided in the separate Corporation Income Tax Credits booklet.
Individual or C Corporation – amount of the credit allowed in a tax year for a particular category of school equals the lesser of:
- 50% of contributions made directly to eligible schools within the category plus any nonprofit private school credit for the same school category received from a passthrough entity,
- 50% of the tax liability before credits for the tax year, or
- $2,500. (Note: For tax years 2019 and 2020, it was 25% of the tax liability before credits.)
Any credit in excess of the limits may not be carried forward to the subsequent tax year.
Passthrough Entity – amount of the credit allowed in a tax year for each category of school is determined by multiplying the contributions made directly to eligible schools within a category by 50%. The resulting credit is passed through to the entity’s owners or beneficiaries based on their respective interests in the entity. Except for an estate or trust, any nonprofit private school credit received from another passthrough entity is passed through to the entity’s owners.
An estate or trust that receives a nonprofit private credit from another passthrough entity may either retain the credit or pass it through to its beneficiaries. If an estate or trust retains a credit received from another passthrough entity, the estate or trust may claim the lesser of:
- The amount of the credit received,
- 50% of the estate’s or trust’s tax liability before credits, or
- $2,500. (Note: For tax years 2019 and 2020, it was 25% of the tax liability before credits.)
Filing Requirements: The credit must be claimed on the income tax return filed for the tax year in which the contribution is made; however, an election may be made, on a contribution-by-contribution basis, to treat a contribution as having been made in the previous tax year if it is made on or before the due date, including extensions, for filing the state income tax return for the previous tax year.
To claim the credit, see the instructions to the applicable form as follows:
- If an individual, see Schedule ND-1PSC.
- If an estate or trust, see Schedule 38-TC.
- If a partnership, see Form 58, Schedule K.
- If an S corporation, see Form 60, Schedule K.
- If a C corporation, see Form 40, Schedule TC or Schedule CR, Part III.
Century Code Reference: N.D.C.C. § 57-38-01.7