As we prepare to ring in 2017, changes to state tax credits may give Arizonans taxpayers and local nonprofits extra reason to celebrate.
Not only can donations to Qualifying Charitable Organizations and Qualifying Foster Care Charitable Organizations be claimed as separate state tax credits with separate limitations for each, but deadlines for 2016 donations have been extended from Dec. 31 until April 17.
A list of qualifying organizations to which a donation would qualify for a tax credit is available at the Arizona Department of Revenue’s website — azdor.gov
More good news: The 2016 limit for eligible contributions to qualifying organizations has doubled to $400 for single taxpayers and $800 for married taxpayers filing jointly. Limits for the qualifying foster organizations credit have also more than doubled to $500 for single taxpayers and $1,000 for married couples.
Kristen Merrifield, chief executive officer of the Alliance of Arizona Nonprofits , said there are more than 20,000 nonprofits in Arizona and about one-third of them qualify for the tax credit, which can be claimed as a dollar-for-dollar credit to reduce liability on state income tax.
“We expect to see increased giving due to the extended deadline and the fact that nonprofits have additional time to promote the opportunity. When people think about filing their taxes in January, February and March and realize they have a tax liability, they may prefer to make a donation to a charity and offset that liability,” said Merrifield.
Many taxpayers seem to appreciate the control the tax credits give them, she said.
“If you have tax liability anyway, you can choose to let the state decide what to do with the money or you can make a donation to lower your tax liability and direct the money to where you want,” she said.
“That seems to be a driving decision for people: It gives them control as a taxpayer to say, ‘I want these dollars directed toward this homeless shelter or that food bank,’” said Merrifield.
She emphasized that organizations of all sizes are eligible for the tax credit donation and the dollars they receive are often significant for the charities.
“For many organizations, tax credit dollars are an important piece that they plan and budget for. They put strategy behind it and some are putting advertising dollars behind it,” Merrifield said about charities raising awareness about the tax credits available.
More than 30 local charities have joined forces to help promote awareness about the tax credit through the Arizona Charitable Tax Credit Coalition at aztaxcredit-4soaz.uconcepts.net/
Spearheaded by the Pima Council On Aging and other organizations, the coalition is promoting the Arizona Charitable Tax Credit for the benefit of all nonprofits serving the working poor in Southern Arizona.
“Our tagline is ‘Give local. Keep local.’ We decided to get together and bring more awareness that it is an option to keep your money local as opposed to sending it to the state capital ... we want to remind people that there are so many wonderful local charities that can benefit from this tax credit money,” said Kimberley Hoidal, director of development for the Pima Council On Aging.
While many nonprofits in the coalition are high-profile, others are lesser-known.
The Hebrew Free Loan Association is among the many organizations that fill unique niches in the community.
Started locally in 1947 by Murf Handmaker, Leo Rackoff and Joe Fishman, the nonprofit is dedicated to Jewish values of loving kindness as directed by the Torah.
Several verses state that interest should not be exacted when loaning money to those in need. On that premise, the Hebrew Free Loan Association offers interest-free financial assistance to help people of all races, religions and cultures.
“We are the best kept secret in Tucson,” said Phil Bregman, who has been president of the organization for more than 20 years.
At any given time, the association has between $50,000 and $100,000 loaned out to the community. The criteria is simple: Anyone who is 18 years old, has genuine need, has a job and has lived in Tucson for at least a year can apply.
Those who receive loans begin paying them back interest-free in monthly increments after 60 days; a client has 24 months to repay the loan.
Loans have been granted to help people consolidate debt, purchase cars, make household repairs, provide emergency assistance for health expenses or rent and utilities, fund student loans, pay travel expenses and for many other needs. The application process includes completing an application and a pre-loan interview.
“We have people from all walks of life who need money and they just don’t know who to go to and if they go to someone they have been turned down, but we are able to help them,” said Cindy Goritz, executive director for the nonprofit.
“It is really cool. When people donate to us, they are helping so many people because we recycle the loans: We loan the money but then we get paid back so we have more money to loan,” said Bregman.
“ And you don’t have to be Jewish to get a loan. We are based on Jewish values, but we will loan to anyone. It is really a terrific organization,” said Bregman.
The group’s website is tucsonfreeloan.org
