N.D.C.C. § 57-38-01.20 — Credit for expenses of caring for certain family members

1. An individual is entitled to a credit against the tax imposed under section 57 -38-30.3 in
the amount of qualified care expenses under this section paid by the individual for the
care of a qualifying family member during the taxable year.
2. A qualifying family member is an individual who has taxable income of twenty
thousand dollars or less or a married individual with taxable income of thirty -five
thousand dollars or less, including that of the individual's spouse, for the taxable year.
A qualifying family member must be related to the taxpayer by blood or marriage and
either sixty-five years of age or older or is disabled as defined under title XVI of the
federal Social Security Act.
3. a. Qualified care expenses include payments by the taxpayer for home health
agency services, companionship services, personal care attendant services,
homemaker services, adult day care, respite care, and other expenses that are
deductible medical expenses under the Internal Revenue Code. A qualified care
expense must be:
(1) Provided to or for the benefit of the qualifying family member or to assist the
taxpayer in caring for the qualifying family member;
(2) Provided by an organization or individual not related to the taxpayer or the
qualifying family member; and
(3) Not compensated for by insurance or federal or state assistance programs.
b. For purposes of this subsection, "companionship services" means services that
provide fellowship, care, and protection for individuals who, because of advanced
age or physical or mental disabilities, cannot care for their own needs. Those
services may include household work related to the care of the aged or disabled
person, including meal preparation, bed making, washing of clothes, and other
similar services, and may include the performance of general household work if
that work does not exceed twenty percent of the total weekly hours worked.
"Companionship services" does not include services relating to the care and
protection of the aged or disabled which require and are performed by trained
personnel, including a registered or practical nurse, and does not include services
of individuals who provide care and protection for infants and young children who
are not physically or mentally disabled.
4. The percentage amount of credit allowable under this section is:
a. For a taxpayer whose taxable income does not exceed twenty -five thousand
dollars, or thirty -five thousand dollars for a joint return, thirty percent of qualified
elderly care expenses; or
b. For a taxpayer whose taxable income exceeds twenty -five thousand dollars, or
thirty-five thousand dollars for a joint return, the greater of:
(1) Twenty percent of qualified elderly care expenses; or
(2) Thirty percent of qualified elderly care expenses, minus one percent of
those expenses for each two thousand dollars or fraction of two thousand
dollars by which the taxable income of the taxpayer for the taxable year
exceeds twenty -five thousand dollars, or thirty -five thousand dollars for a
joint return.
5. The dollar amount of credit allowable under this section is:
a. Reduced by one dollar for each dollar of the taxable income over fifty thousand
dollars for a taxpayer whose taxable income exceeds fifty thousand dollars, or for
a joint return, reduced by one dollar for each dollar of the taxable income over
seventy thousand dollars for taxpayers whose taxable income exceeds seventy
thousand dollars; and
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b. Limited to two thousand dollars per qualifying family member in a taxable year
and to four thousand dollars total for two or more qualifying family members in a
taxable year.
6. A deduction or credit is not allowed under any other provision of this chapter with
respect to any amount for which a credit is allowed under this section. The credit
allowed under this section may not be claimed as a carryback or carryforward and may
not be refunded if the taxpayer has no tax liability.
7. In the case of a married individual filing a separate return, the percentage amount of
credit under subsection 4 and the dollar amount of credit under subsection 5 are
limited to one-half of the amounts indicated in those subsections.
57-38-01.21. Charitable gifts, planned gifts, and qualified endowments credit -
Definitions.
1. For purposes of this section:
a. "Permanent, irrevocable fund" means a fund comprising cash, securities, mutual
funds, or other investment assets established for a specific charitable, religious,
educational, or eleemosynary purpose and invested for the production or growth
of income, or both, which may either be added to principal or expended.
b. "Planned gift" means an irrevocable charitable gift to a North Dakota qualified
nonprofit organization or qualified endowment held by or for a North Dakota
qualified nonprofit organization, when the charitable gift uses any of the following
techniques that are authorized under the Internal Revenue Code:
(1) Charitable remainder unitrusts, as defined by 26 U.S.C. 664;
(2) Charitable remainder annuity trusts, as defined by 26 U.S.C. 664;
(3) Pooled income fund trusts, as defined by 26 U.S.C. 642(c)(5);
(4) Charitable lead unitrusts qualifying under 26 U.S.C. 170(f)(2)(B);
(5) Charitable lead annuity trusts qualifying under 26 U.S.C. 170(f)(2)(B);
(6) Charitable gift annuities undertaken pursuant to 26 U.S.C. 1011(b);
(7) Deferred charitable gift annuities undertaken pursuant to 26 U.S.C. 1011(b);
(8) Charitable life estate agreements qualifying under 26 U.S.C. 170(f)(3)(B); or
(9) Paid-up life insurance policies meeting the requirements of 26 U.S.C. 170.
"Planned gift" does not include a charitable gift using a charitable remainder
unitrust or charitable remainder annuity trust unless the agreement provides that
the trust may not terminate and beneficiaries' interest in the trust may not be
assigned or contributed to the qualified nonprofit organization or qualified
endowment sooner than the earlier of the date of death of the beneficiaries or five
years from the date of the planned gift.
"Planned gift" does not include a deferred charitable gift annuity unless the
payment of the annuity is required to begin within the life expectancy of the
annuitant or of the joint life expectancies of the annuitants, if more than one
annuitant, as determined using the actuarial tables used by the internal revenue
service in determining federal charitable income tax deductions on the date of the
planned gift.
"Planned gift" does not include a charitable gift annuity or deferred charitable
gift annuity unless the annuity agreement provides that the interest of the
annuitant or annuitants in the gift annuity may not be assigned to the qualified
nonprofit organization or qualified endowment sooner than the earlier of the date
of death of the annuitant or annuitants or five years after the date of the planned
gift.
"Planned gift" does not include a charitable gift annuity or deferred charitable
gift annuity unless the annuity is a qualified charitable gift annuity for federal
income tax purposes.
c. "Qualified endowment" means a permanent, irrevocable fund held by:
(1) A North Dakota incorporated or established organization that is:
(a) A qualified nonprofit organization; or
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(b) A bank or trust company holding the fund on behalf of a qualified
nonprofit organization; or
(2) An organization incorporated or established in a state bordering North
Dakota that is:
(a) A tax -exempt organization under 26 U.S.C. 501(c) to which
contributions qualify for federal charitable income tax deductions
which was incorporated or established for the support and benefit of a
hospital, nursing home, or medical center, or a facility providing any
combination of those services, which is located outside North Dakota
but within five miles of a North Dakota city of five thousand or more
population in which there is no hospital; or
(b) A bank or trust company holding the fund on behalf of an organization
that meets the conditions of subparagraph a.
d. "Qualified nonprofit organization" means a North Dakota incorporated or
established tax -exempt organization under 26 U.S.C. 501(c) to which
contributions qualify for federal charitable income tax deductions with an
established business presence or situs in North Dakota.
2. a. An individual is allowed a tax credit against the tax imposed by section
57-38-30.3 in an amount equal to forty percent of the present value of the
aggregate amount of the charitable gift portion of planned gifts made by the
taxpayer during the taxable year to a qualified nonprofit organization or qualified
endowment. The maximum credit that may be claimed under this subsection for
planned gifts made in a taxable year is ten thousand dollars for an individual , or
twenty thousand dollars for married individuals filing a joint return. The credit
allowed under this section may not exceed the taxpayer's income tax liability.
b. An individual is allowed a tax credit against the tax imposed by section
57-38-30.3 for making a charitable gift to a qualified endowment. The credit is
equal to forty percent of the charitable gift. If an individual makes a single
charitable gift to a qualified endowment, the charitable gift must be five thousand
dollars or more to qualify for the credit. If an individual makes more than one
charitable gift to the same qualified endowment, the aggregate amount of the
charitable gifts made to that qualified endowment must be five thousand dollars
or more to qualify for the credit. The maximum credit that may be claimed under
this subsection for charitable gifts made in a taxable year is ten thousand dollars
for an individual or twenty thousand dollars for married individuals filing a joint
return. The tax credit allowed under this section may not exceed the taxpayer's
income tax liability.
3. A corporation is allowed a tax credit against the tax imposed by section 57 -38-30 in an
amount equal to forty percent of a charitable gift to a qualified endowment. The
maximum credit that may be claimed by a corporation under this subsection for
charitable gifts made in a taxable year is ten thousand dollars. The credit allowed
under this section may not exceed the corporate taxpayer's income tax liability.
4. An estate or trust is allowed a tax credit in an amount equal to forty percent of a
charitable gift to a qualified endowment. The maximum credit that may be claimed
under this subsection for charitable gifts made in a taxable year is ten thousand
dollars. The allowable credit must be apportioned to the estate or trust and to its
beneficiaries on the basis of the income of the estate or trust allocable to each, and
the beneficiaries may claim their share of the credit against the tax imposed by section
57-38-30 or 57 -38-30.3. A beneficiary may claim the credit only in the beneficiary's
taxable year in which the taxable year of the estate or trust ends. Subsections 6 and 7
apply to the estate or trust and its beneficiaries with respect to their respective shares
of the apportioned credit.
5. A passthrough entity is entitled to a credit in an amount equal to forty percent of a
charitable gift to a qualified endowment by the entity during the taxable year. The
maximum credit that may be claimed by the entity under this subsection for charitable
gifts made in a taxable year is ten thousand dollars. The credit determined at the entity
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level must be passed through to the partners, shareholders, or members in the same
proportion that the charitable contributions attributable to the charitable gifts under this
section are distributed to the partners, shareholders, or members. The partner,
shareholder, or member may claim the credit only in the partner's, shareholder's, or
member's taxable year in which the taxable year of the passthrough entity ends.
Subsections 6 and 7 apply to the partner, shareholder, or member.
6. The amount of the charitable gift upon which an allowable credit is computed must be
added to federal taxable income in computing North Dakota taxable income in any
taxable year in which the charitable gift reduces federal taxable income, but only to the
extent that the charitable gift reduced federal taxable income.
7. The unused portion of a credit under this section may be carried forward for up to
three taxable years.
8. If a charitable gift for which a credit was claimed is recovered by the taxpayer, an
amount equal to the credit claimed in all taxable years must be added to the tax due
on the income tax return filed for the taxable year in which the recovery occurs. For
purposes of subsection 4, this subsection applies if the estate or trust recovers the
charitable gift and the estate or trust and its beneficiaries are liable for the additional
tax due with respect to their respective shares of the apportioned credit. For purposes
of subsection 5, this subsection applies if the partnership, subchapter S corporation, or
limited liability company recovers the charitable gift, and the partner, shareholder, or
member is liable for the additional tax due.
9. A charitable gift used as the basis for a credit claimed under this section may not be
used as the basis for the claim of a credit under any other provision of this chapter.