Part II – Redirecting Your AZ Tax Dollars – Public Schools, Charitable Organizations

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Arizona has several helpful tax credits where you can redirect your tax dollars to honorable causes. By making donations to private schools, public schools, qualifying charitable organizations, and qualifying foster care charitable organizations, you can offset your Arizona tax liability. See the below graph to see the updates for 2014.

*The Qualifying Charitable Org. (QCO) and Qualifying Foster Care Charitable Org. (QFCO) combined amounts cannot exceed a maximum credit allowable of $400 for Single and $800 Married. E.g. A single taxpayer donates $150 to a QCO and $400 to a QFCO. The $150 is eligible for the QCO credit and only $250 is eligible for the QFCO credit. The total QCO and QFCO credit is $400 for the single taxpayer.

From the graph above, you’ll find that the maximum allowable 2014 credits for Arizona for donations made to a private school, public school, QCO, QFCO and the AZ Military Family Relief Fund is $1,853 for Single and Head of Household Taxpayers and $3,706 for Married Filing Joint Taxpayers. For more detailed guidelines on each credit, please read more below.

 Private School Tax Credit

See our previous article . We went into detail on the Private School Tax Credit, particularly donations through the Arizona Tuition Connection. These are allowable credits for donations for tuition to private schools and school tuition organizations. Please note that you cannot donate towards your own child’s tuition. The Private School Tax Credit is unique in that you can make donations through April 15, 2015 and it will still be eligible for a 2014 state tax credit.

 Public School Tax Credit

The public school tax credit is allowed for any cash or payroll withholding contributions or fees paid to a public school. The cash or fee paid must be specifically for support of extracurricular activities or for character education programs. This credit allows you to pay fees for your own child or any other child at a public school or charter school in grades kindergarten through 12th. See the chart above for the maximum allowable credits for 2014.

 Qualifying Charitable Organization

In order to obtain the credit, the organization must be approved and listed by Arizona. See this document for a listing of all Qualifying Charitable Organizations for 2014. Qualifying Charitable Organizations provide services such as cash assistance, medical care, child care, food, clothing, shelter, job placement and job training services or any other assistance that is reasonably necessary to meet immediate basic needs and that is provided and used in Arizona. See the chart above for the maximum allowable credits for 2014.

 Qualifying Foster Care Charitable Organization

Legislation in 2013 now allows you to claim a tax credit for voluntary cash contributions made during the taxable year to a Qualifying Foster Care Charitable Organization. To qualify as a listed QFCO, the organization must care for at least 200 foster children in Arizona and spend at least 50% of its budget on ongoing services to foster children in Arizona. See this list for approved QFCOs for 2014.

Arizona Military Family Relief Fund

The Arizona Military Family Relief Fund is administered by the Arizona Department of Veterans’ Services. The tax credit is available through December 31, 2018. Follow this link to see how you can donate today!

If you have any more questions as a current client, please don’t hesitate to give us a call for your unique situation. Also, give us a call today to set up a tax plan consultation!