2018 Update to Minnesota's Charitable Deduction

Tax Law Changes
Beginning in 2018, fewer Minnesotans are expected to itemize their charitable contributions on their 2018 federal income tax returns, an outcome of changes in the federal tax law. This will result in more Minnesotans becoming eligible for Minnesota’s charitable deduction. Therefore, nonprofits are encouraged to work with their donors, volunteers and communities to share information about Minnesota’s deduction.

How Minnesota’s Charitable Tax Deduction Works
In Minnesota, taxpayers who do not itemize deductions on their federal income tax return may subtract a portion of their charitable contributions from their taxable income on their state return. Minnesota’s charitable deduction, also known as the non-itemizer charitable deduction, provides a 50 percent tax deduction for total charitable contributions over $500, which can include contributions to 501(c)(3) organizations that are not located in Minnesota. Contributions to any 501(c)(3) organization are eligible for the deduction, including all public charities and churches/faith organizations.


Benefits of Minnesota’s Charitable Deduction
The Minnesota Council of Nonprofits (MCN) believes Minnesota’s charitable deduction is a valuable part of the state’s tax code. In 2016, 204,500 households took Minnesota’s charitable deduction, reflecting roughly $350 million in contributions.


The nonprofit sector is an important part of strong, thriving communities. Minnesota’s charitable deduction encourages community members to support nonprofit organizations that rely on charitable giving to carry out a wide range of activities that improve the quality of life, from health to education to social services and the arts.


In 1999, MCN led the effort that resulted in Minnesota becoming the first state to create a tax benefit for taxpayers who make charitable contributions and do not itemize on their tax returns. Chief sponsors of the bill included Representative Tim Pawlenty and Senator John Hottinger, with broad support from Minnesota charitable volunteers and donors.


Charitable Deduction for All
As discussions continue about taxes at the state and federal levels, MCN will continue to promote Minnesota’s charitable deduction and advocate to expand tax incentives at the federal level so that those who take the standard deduction have equal access to opportunities to invest in their community.


Additional Information?
For additional information, see MCN’s website for updates, tools, and our upcoming training schedule.


For information on fundraising or development, please contact Kari Aanestad, development manage. For information on policy, contact Rebecca Lucero, public policy director.

About MCN
MCN is a statewide association of 2,000 nonprofit organizations. Through its website, resource publications, workshops and events, cost-saving programs and advocacy, MCN continually works to inform, promote, connect and strengthen individual nonprofits and the nonprofit sector.

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