'Tis the season for giving back to your local community. Arizona Charitable and School Tax Credits allow you to donate to your favorite local non-profits or schools without dipping into your wallet - simply redirect your income tax back into your local community.
A tax credit is a dollar-for-dollar reduction of the income tax you owe. For example, if you owe $1,000 in federal taxes but are eligible for a $1,000 tax credit, your net liability drops to zero. Tax credits generally save you more in taxes than deductions because deductions only reduce the amount of your income that is subject to tax, whereas, credits directly reduce your tax bill (more).
The state of Arizona offers a handful of Tax Credits beyond the Charitable Tax Credit and School Tax Credit. For a complete list of AZ Tax Credits, visit the AZ Department of Revenue website. Please consult your local accountant with any questions you might have regarding your tax liability and the tax credit process.
Below is a list of Local First members that qualify for either the Charitable Tax Credit or the School Tax Credit.
AZ Charitable Tax Credit
Within every community there exists a body of non-profit organizations working relentlessly to create a safer and healthier environment for it's neighbors, friends, and families. These organizations rely on grants, loans, and most importantly the support of their local community members to stay afloat.
Utilizing the Charitable Tax Credit credits is a tangible way to ensure our hard-earned money is returned directly to organizations and programs that make an impact in our local economy. Please note that the period for making eligible contributions has been extended this year: donations to QCOs or QFCOs made on or before April 15th may be applied to the 2016 tax year. Additionally, Charitable Tax Credit can be used IN ADDITION TO School Tax Credit.
Check out this recent blog that further explains the Charitable Tax Credit, its impact in the Verde Valley, and how to determine if your organization can be listed as a "Qualifying Organization." For more information on Charitable Tax Credit, please visit the AZ Department of Revenue website.
LFA "Qualifying Charitable Organizations"
Able to donate up to $400 if filing individually, or $800 if married filing jointly (as warranted by your tax liability)
LFA "Qualifying Foster Care Charitable Organizations"
Able to donate up to $500 if filing individually, or $1,000 if married filing jointly (as warranted by your tax liability)
AZ School Tax Credit
School Tax Credits are available for both public schools and private school tuition organizations. For more information on School Tax Credits, please view this brochure issued by the AZ Department of Revenue.
An individual may claim a credit for making contributions or paying fees to a public school for support of qualified activities or qualified programs, . Please note, a charter school is considered a public school (more).
Qualified programs include any of the following:
- Extracurricular activities
- Character education programs
- Standardized testing fees for college credit or readiness offered by a widely recognized and accepted educational testing organization
- Preparation courses and materials for standardized testing
- The career and technical education industry education industry certification assessment
- Cardiopulmonary resuscitation training pursuant to A.R.S. § 15-718.01
PUBLIC Schools & LFA CHARTER SCHOOLS
LFA SCHool tuition organizations (Private Schools)
An individual may also claim two separate credits for making donations to a qualified school tuition organization for scholarships to private schools (more). These donations redirect funds from the state's General Fund, which pays for public education.