For complete details, refer to the Arizona Revised Statutes. In case of inconsistency or omission the language of the Arizona Revised Statues will prevail. Please consult with your tax professional to understand how this information affects or does not affect your individual tax returns.
What is Arizona's Charitable Tax Credit?
For taxable years beginning on or after January 1, 1998, Arizona Law provides a credit for cash contributions made to certain qualified charities.
- You may qualify for this credit if you make cash contributions to a qualifying charity, and RMHC of Southern Arizona is a qualifying charity.
- You may also qualify for this credit if you make cash contributions to a qualified charity through an umbrella type of charitable organization. You must designate the donation be directed to a member organization or member group fund that would qualify on a stand alone basis.
- For 2016 and later years, the maximum amount of the credit is $400.00 for single taxpayers or heads of household.
- For Married taxpayers, the maximum credit is $800.00. If married taxpayers file separate returns, each spouse may claim ½ of the credit that would have been allowed on a joint return.
- This is not a refundable credit. If the allowable credit is more than your tax liability or if you have no tax, you may carry the unused credit forward for up to the next five years.
- Starting in 2010 you may be able to make credit eligible contributions through payroll withholding. Check with your employer to see if your employer has agreed to withhold contributions for this credit from your pay.
I already donate to my child's school. Can I claim this Credit too?
There are five different qualified areas eligible for a tax credit, and you can claim each of them in the same tax year, up to your tax liability from that year.
Qualified Charitable Organization
Qualified Foster Care Charitable Organization
Public or Private Schools
School Tuition Organization
Arizona Military Relief Fund
Each have different requirements and limits. Married couples can actually reduce their State liability by up to $4,813.00 if they were to contribute the maximum amount to each of these credits.
Please note you can use the credits for any particular tax year only up to your liability for that same tax year. However, many of these credits can be carried forward for up to five years if they are unused.
I don't usually have to pay the State each April. Could I still benefit?
The Credit reduces your State tax liability, meaning that, after all credits and deductions, you could be eligible for a refund if you had State taxes withheld from your paycheck or paid estimated taxes. By reducing your initial liability, the Credit could have the effect of reducing the money you owe to the State or increasing your refund.
When is the deadline to make a donation?
Beginning with the 2016 tax year, credit eligible contributions made to a Qualifying Charitable Organization or Qualifying Foster Care Charitable Organization that are made on or before April 15th may be applied to either the current or the preceding taxable year for your Arizona State tax return. In order for donations to qualify for your federal tax return, they must be made by December 31 of that tax year.
Do I have to itemize my tax returns?
You do not!
For taxable years 2013 and beyond, the requirement to itemize deductions on the State return has been eliminated. You cannot claim both a tax credit and an itemized deduction for the same contribution on your State return.
Additionally, beginning with the 2019 tax year, other donations (for which you do NOT claim the tax credit) may be eligible for a 25% deduction – even if you do not itemize and instead use the standard deduction.
How much can I contribute?
For the Qualified Charitable Organization Tax Credit:
For Single taxpayers or Heads of Household, the maximum credit is $400.00. For Married taxpayers, the maximum credit is $800.00. If married taxpayers file separate returns, each spouse may claim ½ of the credit that would have been allowed on a joint return.
Keep in mind:
You may also claim credits for donations made to a public or private school, qualified foster care charitable organization, school tuition organization, and Arizona Military Relief Fund. The total credits applied can total $4,813 for a married couple or your total State tax liability, whichever is less.