AZ Charitable Tax Credit
Did you know that through the Arizona Charitable Tax Credit contributions to Arizona Baptist Children’s Services can reduce your Arizona income tax dollar-for-dollar? That means that you may be able to give up to $200 for single and $400 for married filing jointly to ABCS at no cost to you.
What is the AZ Charitable Tax Credit?
Through the Arizona Charitable Tax Credit, you can claim a tax credit on your Arizona income tax return for contributions made to Arizona Baptist Children’s Services (ABCS). As a tax credit, your contributions can reduce your Arizona income tax dollar-for-dollar up to the maximum allowable amount:
$200 for individual taxpayers or heads of households, or
$400 for married taxpayers filing jointly.
You can also deduct your contributions on your federal income tax return. So 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 is separate; thus you can claim both credits as allowed by Arizona 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: You can claim your contributions to ABCS as a credit. While contributions claimed as a credit cannot also be claimed as a deduction on your state income tax return, you can 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 sum of your contribution throughout the year is included in your itemized deduction for total charitable contributions, which is then used to calculate your tax credit amount. We recommend giving monthly instead of a lump sum in December when giving can be more of a burden.
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 anyways.