Center for Arizona Policy encourages Arizona taxpayers to consider four state income tax credits that help Arizona families. To take advantage of these credits, all you have to do is make a donation to a school tuition organization, a charity that serves low income citizens, and a public school district. Then, you can receive dollar-for-dollar credits on your state tax return for each of your donations.
Here is more information on each program:
Individual Tax Credits
l) Individual scholarship tax credit
Individuals may receive a tax credit of up to $503 and married couples may receive a credit of up to $1006 for donations to school tuition organizations (“STOs”). The STOs award scholarships to students whose parents have chosen to send them to a private school. Last year, this program provided over 25,000 scholarships to Arizona children.
CAP recommends Arizona Christian School Tuition Organization or TOPS for Kids.
2) Overflow/PLUS (Private Learning Uplifting Students) credit
This tax credit is new for the 2012 tax year. Despite the success of the original individual scholarship tax credit program, many more families are in need of help to make their educational choice a reality. The Legislature passed and Governor Brewer signed this new “overflow” or “PLUS” credit to help get these kids off of the waiting lists for scholarships and into the schools that their parents have chosen as the best fit for them.
The overflow/PLUS credit allows individuals to receive credit for up to an additional $500 donation to a school tuition organization – combined with the original individual scholarship tax credit for a maximum total credit of $1003 for donations to an STO. Married couples filing jointly can take a credit for up to an additional $1000 donation – for a total credit of $2006.
To learn more about the details of this new program, read this more in-depth post.
For both the individual scholarship tax credit and the overflow/PLUS credit, you may donate through April 15 of next year and still receive the credit on your state taxes for this year.
3) Working poor or charitable tax credit
This credit of $200 for individuals and $400 for married couples helps provide food, shelter, and medical care to those Arizonans who are most in need. Donations to many organizations that help low-income citizens are eligible, including homeless shelters, food pantries, and many of the state’s pregnancy care centers.
CAP recommends giving to Christian Family Care, Hope and a Future, or your local pregnancy care center. For the list of approved organizations to which you can donate and receive the tax credit, click here. Donations must be made by December 31 to be eligible for a credit on this year’s taxes.
4) Public school tax credit
You can help your local public school district – or what CAP recommends is seeking out a school district with particular financial need, such as one in a lower income area – with a donation to support extracurricular activities and programs. You may receive credit for a donation of up to $200 for individuals or $400 for married couples filing jointly. Donations must be made by December 31 to be eligible for a credit on this year’s taxes.
Depending on your tax liability, you can take advantage of all four of these credits while making a difference in the lives of your fellow Arizonans. Be sure to consult a tax professional for advice about your specific situation.
Corporate Tax Credits
Arizona also offers two scholarship tax credit programs for corporations and insurance companies.These are also dollar-for-dollar credits for donations to STOs. The two programs provide scholarships specifically for students with financial need and for students with disabilities or those in foster care.
CAP recommends School Choice Arizona or TOPS for Kids. Due to limits on these corporate programs, donations must be pre-certified, so please contact the STO directly before sending a corporate donation.
This post summarizes several complex areas of law and is not specific legal or tax advice for any person. Consult an attorney or tax professional if you have questions about your specific situation.