Arizona individual taxpayers can direct their state income tax dollars to a variety of Arizona charities through the use of Arizona tax credit contributions. Taxpayers do not need to itemize to claim the Arizona tax credits. A couple filing a joint return in Arizona can qualify for as much as $4,777 of tax credits for 2017.
Contributions to certain charities or public schools will also qualify for a federal charitable contribution deduction. However, you have to itemize your deductions on your federal return to take advantage of this.
You can actually make money by donating to a Qualifying Charitable Organization (a charity that qualifies for both the Arizona tax credit and federal charitable deduction) or public school. Say you donate $100 to a Qualifying Charitable Organization; you will receive a dollar-for-dollar Arizona tax credit worth $100 plus a charitable itemized deduction on your federal return worth between $10 to $39 depending on your federal tax bracket. If you’re in the highest federal tax bracket then you will receive $139 of tax benefits in return for your $100 contribution.
A taxpayer can contribute and take all the credits, subject to the amount of state tax for any particular year. The credits are non-refundable. Unused amounts of credit carry forward for five years, except for the military credit, which does not carry forward.
Contribution to Qualifying Charitable Organizations
Charity must be on this list:
https://www.azdor.gov/Portals/0/RefundCredits/CertifiedCharities2017.pdf
Single, Head of Household, or Married Filing Separate $400, Married Filing Joint $800
Can make contribution up to April filing deadline for prior year credit
Contribution to Qualifying Foster Care Organizations
Charity must be on this list
https://www.azdor.gov/Portals/0/RefundCredits/CertifiedFosterCareCharities2017.pdf
Single, Head of Household, or Married Filing Separate $500, Married Filing Joint $1000
Can make contribution up to April filing deadline for prior year credit
Contribution or Fee Paid to Public School for Extracurricular Activities
Must be a public school in Arizona – to find one go to:
Single, Head of Household, or Married Filing Separate $200, Married Filing Joint $400
Can make contribution up to April filing deadline for prior year credit. Allowed to use fees paid for your child to participate, as well as direct contributions to the school. Fees paid for your child to participate are not a federal charitable deduction.
Contribution to Certified School Tuition Organization
Organization must be on this list
https://www.azdor.gov/Portals/0/RefundCredits/sto_i_list.pdf
2017 Single, Head of Household, or Married Filing Separate $546, Married Filing Joint $1,092 for original credit
Plus 2017 Single, Head of Household, or Married Filing Separate $543, Married Filing Joint $1,085 for switcher (aka plus, overflow or other name chosen by the Organization). Limits are indexed each year. Can make contribution up to April filing deadline for prior year credit.
Can make contribution up to April filing deadline for prior year credit
Contribution to Military Family Relief Fund
Can only contribute here:
Must contribute by 12/31, but the fund generally meets its million dollar cap in November.
Credit is only available through 12/31/2018
Single, Head of Household, or Married Filing Separate $200, Married Filing Joint $400
State Tax Credits Still Available for Arizona Businesses
For the first time in years, the state cap for Arizona businesses to receive a dollar-for-dollar tax credit was not fulfilled within a matter of hours. This year, there is still time for businesses to take advantage of this tax credit while helping low-income children in the state of Arizona. There is a tax credit still available that directly impacts the lives of Arizona children: the Corporate Low-Income Tax Credit Program. This credit removes the financial limitations of low-income families to make the best choice for their student and their specific needs.
Arizona businesses benefit in several ways:
Philanthropic
- A business who donates can help disadvantaged children move into the schools that best meet their unique needs.
Financial
- A business can receive a dollar for-dollar tax credit for its donation up to their full amount of state liability.
Community
- A business can recommend an Arizona private school to benefit from their donation, helping the students in their local community. Schools will be notified of the business’ donation, unless they choose to remain anonymous. Certified School Tuition Organizations (STOs) are your vehicle to make a difference in the life of a child while receiving this state tax credit up to the full amount of your taxable state liability.
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