Arizona taxpayers have a choice when it comes to their tax credits. Taxpayers have the option to give tax money to the state or to deserving organizations through charitable donations. A tax credit reduces the amount of taxes you owe dollar-for-dollar. For example, if you owe $1200 in state taxes but choose to make a $1000 donation under the Foster Care Charitable Organization tax credit, your tax bill will decrease by $1000—meaning you will only owe $200 in taxes.
For 2017, there are five state tax credit programs available. If you have a tax liability (taxes that you owe to the state), you can claim any or all of these credits up to your tax liability amount. Doing so will not only decrease your amount of dollars owed to the state, it will help an organization within your community.
Here is a breakdown of the five tax credit programs available for Arizona taxpayers:
| Tax Credit Name |
Due Date |
Single Filer Cap |
Married Filer Cap |
Organization List |
| Private School Tuition Organization |
4/17/18 |
$1,089 |
$2,177 |
|
| Public School Tax Credit |
4/17/18 |
$200 |
$400 |
|
| Qualifying Charitable Organization |
4/17/18 |
$400 |
$800 |
|
| Foster Care Charitable Organization |
4/17/18 |
$500 |
$1,000 |
|
| Military Family Relief Fund |
12/31/17 |
$200 |
$400 |
Private School Tuition Organization
Purpose: helps families send their kids to private schools by providing a tax credit for contributions made to a private school tuition organization
Amount: $2,177 married filing jointly; $1,089 single/head-of-household (total of both “original” and “overflow” tax credit)
Deadline: April 17, 2018 (for the 2017 tax year)
Note: In 2012, the Overflow/PLUS/”Switcher” tax credit was signed into law, allowing an additional tax credit over and beyond the Original tax credit. The Original tax credit must be claimed first.
Tax form: 323 and 348
***We recommend donating to this tax credit by using the ACSTO (https://donor.acsto.org/donate). On this site, you must first create an account. Next, you will be taken to the first page of the donation form that helps determine filing status and the amount you are able to donate. The second page allows you to allocate your donation to a specific school. It also includes an option to recommend your donation go towards a child. This means you are able to give your income tax dollars to a child for tuition instead of to the state government. If you are interested in donating towards specific children, let us know! We have many customers with great kids who need assistance with tuition.
Public School Extracurricular Activity/Character Education Program
Purpose: supports extracurricular activities or character education programs sponsored by public or charter schools
Amount: $200 single/head-of-household; $400 married filing jointly
Deadline: April 17, 2018 (for the 2017 tax year)
Notes: Extracurriculars are school-sponsored activities that require students to pay a fee to participate (i.e. band or athletics). Contributions must be made to the school, but donors can specify which program(s) to support.
Tax Form: 322
*** This website shows a list of the organizations accepting this donation: http://ade.az.gov/edd/
Qualifying Charitable Organization
Purpose: provides funds for organizations that serve low-income, chronically ill, or physically disabled children in Arizona
Amount: $400 single/head-of-household; $800 married filing jointly
Deadline: April 17, 2018 (for the 2017 tax year)
Tax Form: 321
***Two of our favorite Charitable Organizations are MidWest Food Bank Arizona Division (Donate to MWFD-AZ here) and YoungLives (Donate to YoungLives here)
Qualifying Foster Care Charitable Organization
Purpose: provide funds for organizations that serve individuals in foster care
Amount: $500 single/head-of-household; $1,000 married filing jointly
Deadline: April 17, 2018 (for the 2017 tax year)
Tax Form: 352
***Need a good one to give to? We love Christian Family Care! Donate to Christian Family Care here.
Military Family Relief Fund
Purpose: provides financial assistance to the families of deployed service members and post 9/11 military families
Amount: $200 single/head-of-household; $400 married filing jointly
Deadline: December 31
Note: This fund has already reached its annual limit of $1 million in donations. Any donations received by the fund will be returned to the taxpayer.
***The Arizona Department of Veterans’ Services donation information web page is https://dvs.az.gov/military-family-relief-fund-2017. This page links to a PDF form you must use to make your donation by mail. Currently, they do not have an option to donate online.
To recap, by taking advantage of these five tax credit programs, married couples can claim up to $4,777 in tax credits in 2017. Single and head-of-household filers can claim up to $2,389 in credits.
Frequently Asked Questions
If I normally get a refund, can I still take advantage of these tax credits? Yes! A refund means you’ve overpaid throughout the year. This doesn’t necessarily mean you don’t have a tax liability. Claiming these tax credits can mean an even higher refund!
Do I need to donate by December 31? The deadline to contribute for most of the tax credits is the tax filing deadline (April 17th, 2018 for tax year 2017). However, donating by December 31 ensures you can still count your charitable donation as a deduction on your federal taxes.
Can I claim my donation as a tax credit and as an itemized deduction? While you can claim the charitable donation as an itemized deduction on your federal taxes, you must remove it from your state itemized deduction if you are claiming it as a tax credit.
What if I donate more than my state tax liability? You cannot claim a credit for more than your tax liability. For example, if you donate $1,000 using the Foster Care Organization tax credit while your state tax liability is only $800, you can only claim an $800 tax credit. You can, however, claim the extra $200 as an itemized deduction. You can also carry forward any unused credit for five years (except for the Military Family Relief Fund credit).
What’s the difference between a deduction and a credit? A deduction reduces the amount of your taxable income. A tax credit reduces your tax liability dollar-for-dollar. A tax credit is always better than a tax deduction. For a taxpayer in the 25% tax bracket, a $1,000 tax deduction means a savings of $250 ($1,000 x 25%) while a $1,000 tax credit means a savings of $1,000.
Do I have to itemize deductions to claim any of these tax credits? No.
Where is the Working Poor Tax Credit? The Working Poor Tax Credit was expanded in 2013 to include Foster Care Organizations and was renamed the Qualifying Charitable Organization tax credit. Beginning in 2016, the Qualifying Charitable Organization credit and the Foster Care Organization tax credit were split and are now claimed as separate credits.
I’m not familiar with any of these organizations, does Stewardship have any they recommend? Yes! We know and love several of the organizations on these lists. If you want to make charitable donations but need a place to send them, look at the recommendations we have listed. If you would like to learn more about these organizations, let us know! We would be happy to share with you the good work they are doing in our community.
If you have questions, we’d love to help. Schedule time with us today!
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