Arizona Tax Credit Information

Arizona allows several non-refundable tax credits.  A tax credit is a dollar-for-dollar reduction of your tax liability—better than a deduction.  A credit is given for the donated amount unless the state tax owed is less.  All of these are independent of each other, so a taxpayer may utilize all of these credits to determine where up to $2,200 of their tax budget is allocated.  A tax deduction—not credit—may be allowed on the Federal tax return.

Arizona Schools: A credit may be taken for up to $200 (single/head of household) or $400 (married filing jointly) for public school donations; for private school donations, the credit is up to $500 (single/head of household) or $1000 (married filing jointly).  For a list of public and charter schools, see http://ade.az.gov/edd/, or for additional information on the AZ school tax credits (including a corporate credit), see http://www.azdor.gov/ReportsResearch/SchoolTaxCredit.aspx#public.   Many schools and school districts now allow online contributions, sometimes with a surcharge.

Working Poor: Arizona also allows an individual income tax credit for the “Working Poor.”  This charitable tax credit is available for donations of $200 (single) or $400 (married filing joint) to qualifying nonprofit organizations.  A list of organizations is available at http://www.azdor.gov/LinkClick.aspx?fileticket=f8jIcRENS7k%3d&tabid=133.  There have been changes to this program making it easier to qualify for the credit.  (No baseline year is needed, as it was prior to 2009.)

Military: A donation to the AZ Military Family Relief Fund helps the families of combat veterans undergoing rehabilitation as well as assisting with financial hardship for families that of soldiers who die in the line of duty.  A credit is available for donations up to $200, single, or $400, married filing joint.  Similar to the AZ Tuition Credits, this is a way to tell the state what to do with your tax dollars you already pay.  Unlike other tax incentive programs, this program has an annual cap of $1,000,000.  This means that once the cap is reached, contributions can be made but do NOT qualify for the tax credit.  The current amount that has been contributed for this year is available at http://dvs.az.gov/benefits/relief_fund.aspx along with the donation form.  (This donation must be sent in.)

Please keep proof of your contributions in your tax file.

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