AZ Charitable Tax Credit
TRUE OR FALSE, you can make a donation to Arizona Baptist Children’s Services and get each dollar back as a tax credit? TRUE!
What is the AZ Charitable Tax Credit?
The Arizona Charitable Tax Credit for the Working Poor allows Arizona residents to designate up to $400 of their state taxes to support Arizona Baptist Children’s Services (ABCS). As a tax credit, your contributions can reduce your Arizona income tax dollar-for-dollar. Now you can help ABCS change lives across Arizona by supporting ABCS with a financial gift, while receiving each dollar back as a tax credit. *Maximum allowable charitable tax credit amount is $200 for individual taxpayers or heads of households, or $400 for married taxpayers filling jointly.
You can also deduct your contributions on your federal income tax return. This means your contributions may be offset by the state credit AND may earn you the federal tax benefit of the deduction. This credit can be claimed in addition to other tax credits allowable under Arizona tax laws.
Frequently Asked Questions:
Q. What about the baseline year & amount?
A: Gov. Brewer signed a law effective September 30, 2009 that eliminates the baseline calculation requirement for the charitable tax credit. The new law is retroactive to January 1, 2009.
Q. Is this the same as the School Tax Credit?
A. No. The Charitable Tax Credit for the Working Poor is separate from the School Tax Credit. You can claim both credits as allowed by state tax laws.
Q: Do I have to itemize deductions to claim the credit?
A: Yes. You must itemize deductions on your Arizona state income tax return even though you may not itemize deductions on your federal income tax return.
Q: Do I claim my charitable contribution as a credit or deduction?
A: Credit. Charitable contributions claimed as a credit cannot also be claimed as a deduction on your state income tax return. You can, however, still claim them as a deduction on your federal income tax return.
Q. Does my gift to ABCS have to be in a lump sum contribution?
A. No. The contributions you claim as a credit can be the sum of multiple contributions. The sum of your contributions is subject to the tax credit limit.
Q: Can I give to ABCS through an umbrella-type organization?
A:Yes. You can make a contribution to ABCS through an umbrella organization like the United Way or Arizona Combined Federal Campaign.
To claim the credit you must:
- be an Arizona resident
- itemize deductions on Arizona Schedule A
- complete Arizona tax forms 301 and 321
- postmark contributions or make them online by December 31st
If you would like more information about the Arizona Charitable Tax Credit, you may click here . You may also consult your tax adviser or call the Arizona Department of Revenue at (602) 255-3381.
Some Helpful Tips/Recommendations:
- Check with your bank and see if you can have them automatically send a check to ABCS every month for you. If you already give on a monthly basis, why not set it up so you don’t have to think about it each month. Many banks provide this as a free service.
- Don’t wait until the end of the year to donate $400, give a smaller amount monthly. You will still get the tax credit without giving a large sum in December when finances tend me be tighter.