As an Arizona taxpayer, you have a unique opportunity to direct your tax money to schools and charities you support.
You have to make a donation up front, but β provided you stay within prescribed limits β you get every dollar back in the form of a tax credit.
If you make every possible donation, married couples filing jointly can give $3,706 and all other taxpayers can give $1,853 β and get it all back.
You canβt claim more than you owe in state taxes, but β with the exception of the Military Family Relief Fund Credit β unused credits can be carried forward for five years until used.
Here are some common questions about the process:
What kinds of tax credits can I get for donating to schools or charity?
You can claim a tax credit for donations made to K-12 public schools, including charter schools, and to School Tuition Organizations, which provide scholarships to private schools.
You can also get a tax break for making donations to a qualified charitable organization, which can now include foster-care organizations, or to the Military Family Relief Fund, which provides financial assistance for active duty service members, post 9/11 veterans and their families.
Do I have to choose one of those four categories or can I give to all three?
You can donate up to the maximum amount allowed in each category.
Can I make more than one donation within each category?
Yes, but you need to stay within the limit for each category to get your donation back as a dollar-for-dollar credit.
Can I get a credit for donations made that exceed how much I owe in taxes?
Nope. If your tax liability β the amount of taxes you owe for a given year β is less than your donation, the credit can only be used to reduce your liability to zero. You canβt get an additional refund. Any unused tax credits can be applied to future tax years, but not for more than five consecutive years.
If I claim a tax credit, can I also write off the donation on my taxes?
No. Donations claimed as a tax credit cannot also be used as an itemized deduction.
Once I make the donation, how do I get the credit?
If you donate to a public or private school or to a qualifying charity, you claim a credit on your state income tax return. Use Form 322 for donations to public schools, Form 323 for donations to private schools, Form 348 for additional donations to School Tuition Organizatons, Form 321 for donations to charitable organizations and Form 340 for donations to the Arizona Military Relief Fund.
When is the deadline?
Contributions and fees need to be paid by December 31. The exception is Private School Tuition Organization credits, which can be paid up to April 15, 2016 and still be claimed on your 2015 income tax return. For federal tax deduction purposes, donations are deductible only in the year paid.
How can I get more information?
Visit the Arizona Department of Revenue’s website at azdor.gov and click “Tax Credits” on the left-hand menu. The site has lists of qualifying charitable organizations for the 2015 tax year.
Or call the department at 1-800-352-4090.
