Two new income-tax credits could mean hundreds of dollars of savings for some North Dakota earners.

The 2023 Legislature approved state income-tax credits for donations to pregnancy help centers, maternity homes or child-placing agencies and for taxpayers who adopt children.

The Legislature approved new income-tax schedules that are expected to eliminate the tax liability of about 60% of taxpayers. It has, over recent years, granted exemptions on Social Security and military income, too. However, for those with remaining tax liability, the proposed credits can eliminate up to half of those taxes.

A taxpayer can claim a credit of up to $2,500 or 50% of the tax liability, whichever is less, for a donation to a qualifying entity serving pregnant women. For instance, a donor who gave $1,000 to a pregnancy help center in 2023 and owed a state income tax of $1,000 could subtract $500 from the bill using the credit.

Senate Majority Leader David Hogue, R-Minot, said a nonprofit providing these services as its core mission would be considered a qualifying entity.

“I just think it can be a really good deal for the taxpayer and for these organizations who are trying to support disadvantaged young mothers, expectant mothers,” Hogue said. “The tax credits are a very cost-effective and efficient way for the state and state income taxpayers to partner and support the private sector that is doing this vital work.”

The credit for adopting parents allows for taxpayers to subtract 10% of the amount of their federal income-tax credit for adoptions from their state income tax. The amount subtracted cannot exceed 50% of a taxpayer’s total state income-tax liability. If it does, the extra can be carried over, allowing the taxpayer to claim a credit for up to three additional years.

Hogue said legislators have been interested in assisting organizations that provide pregnancy and maternal support as an option to abortion, but not all organizations wish to receive government dollars out of concern it could discourage the private donations on which they depend. Offering a credit assists pregnancy help organizations in a way that engages donors, he said.

Although most people are inspired to give by a desire to help an organization rather than the tax consequences, Hogue said, he believes the credit can make a difference in overall giving levels.

He added he hopes taxpayers use the tax credit, which could open the door to future legislative consideration of additional tax credits that partner taxpayers with other philanthropic organizations.

“There’s certainly efforts to continue to reduce our income tax liability, and I think this is another way that we can do it,” he said. “To me, this is really a good way to do it.”