Many charitable contributions are eligible for deduction from your federal and state adjusted gross income.
If you itemize your deductions, donations made by December 31 to qualifying charities may reduce your 2019 taxable income and could help bring you a larger refund in 2020. If you claim the standard deduction on your federal income tax return, you may still claim itemized deductions on your Montana return and lower your Montana income taxes.
You must make the charitable contributions by the end of the calendar year to deduct those contributions for that tax year.
Donations could be cash, vehicles, other items, or financial securities. Just make sure you keep proof of the donations, including receipts, and that you’re giving to an organization approved by the IRS for tax-deductible donations.
More information on charities, including protecting yourself against common charity scams and fraudulent organizations, is available from the Montana Department of Justice.
More on Charitable Contributions
The charitable contributions allowed as a deduction in computing your net income for Montana income tax purposes are the same contributions allowed as a deduction for federal income tax purposes made during the year—with the following exceptions:
- You can include your contributions made to the Montana Veterans’ Service Special Revenue Account or the Montana State Veterans’ Cemetery program, or the surcharge you paid for purchasing a Montana patriotic specialty license plate, as itemized deductions on your Montana income tax return even if they are not allowed as itemized deductions on your federal return.
- When you apply the federal 60 percent, 50 percent, 30 percent and 20 percent contribution limitations, use your Montana Adjusted Gross Income instead of your Federal Adjusted Gross Income when you determine your contributions that are allowed.
- Any portion of a contribution that you used to calculate your Qualified Endowment Tax Credit, your Innovative Educational Program Credit, or your Student Scholarship Organization Credit, cannot also be claimed as a contribution deduction. You can claim a charitable deduction for that portion of the contribution not used to calculate this credit.
In general, excess charitable contributions can be carried over five years.
You may deduct your contributions to the Child Abuse and Neglect Prevention Program. If you decide to use the checkoff provided on your Contributions, Penalties, and Interest Schedule, you may deduct this contribution on the same return.
Contributions are subject to the federal substantiation requirements.