As an Arizona taxpayer, you have a unique opportunity to direct your tax money to schools and charities you support and believe in.
You have to make a donation upfront, 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 $4,869, and all other taxpayers can give $2,435 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 has changed since I filed my 2018 taxes?
The Internal Revenue Service, through regulation, has entirely eliminated the deduction for these contributions on your 2019 federal income tax return.
The regulations say that contributions resulting in a state or local tax credit in return for the contribution will not be deductible for federal tax purposes to the extent of the credit.
Arizona tax credits still reduce your Arizona state income tax, dollar for dollar, so that you can support these organizations without any direct cost to you.
A unique five-digit code has been assigned to each qualifying charitable organization and qualifying foster care charitable organization. These codes must be included on your tax return for the credits to be accepted. For example, the Arizona Daily Starβs Sportsmenβs Fund code number is 20450.
You can find code numbers for qualifying charitable organizations at tucne.ws/charities and for qualifying foster care charitable organizations at tucne.ws/fostercharity
What kinds of tax credits can I get for donating to schools or charity?
You can claim a tax credit for certain 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 or foster care organization, or to the Arizona Military Family Relief Fund, which provides financial assistance for active-duty service members, pre- and post-9/11 veterans and their families.
Do I have to choose one category or can I give to all of them?
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?
Sorry, but no. If your tax liability β the amount of taxes you owe for a given year β is less than your donation, the credit can be used only to reduce your liability to zero. You canβt get an additional refund. Unused tax credits, except for donations made to the Military Family Relief Fund, can be applied to future tax years, but not beyond five consecutive years.
If I claim a tax credit, can I also write off the donation on my taxes?
Generally, donations claimed as a tax credit cannot also be used as an itemized deduction on your Arizona income tax return or for federal income taxes. See a tax professional for help.
Once I donate, 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 Arizona 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 Organizations, Form 321 for donations to charitable organizations, Form 352 for donations to foster care organizations and Form 340 for donations to the Arizona Military Relief Fund.
Arizona has assigned a code number to each charitable organization. Donors are required to enter this number on their tax returns to get the credit. You can find code numbers for qualifying charitable organizations at tucne.ws/charities and for qualifying foster care charitable organizations at tucne.ws/fostercharity
When is the deadline?
Donations to the Arizona Military Family Relief Fund must be paid before the annual cap of $1 million is reached, which was Sept. 23 in 2019.
If you donate after the cap is reached, your donation will be returned. Now would be the time to mark your calendar to make a donation for tax year 2020.
Contributions in all other categories must be paid on or before April 15, 2020 β those made between Jan. 1 and April 15, 2020, can be claimed as a credit on your 2019 or 2020 Arizona income tax return.
