Since 1998, Catholic Education Arizona has awarded more tuition scholarships than any other school tuition organization in the state of Arizona. They’ve graduated over 153,000 scholarships totaling in excess of $338 million dollars to students in need of tuition assistance to attend one of 38 schools in the Diocese catholic charities Phoenix of Phoenix. The funding the schools receive is from Arizona’s Private Education Tax Credit legislation that was passed in 1997. This law allows individuals the option to direct their tax liability to tuition scholarships, and in 2006, the Low-Income Corporate Tax Credit legislation was passed offering the tax credit to Arizona corporations as well. Arizona was the first state in the nation to adopt this legislation and to date, 20 states have followed their lead by passing some form of tax credit legislation. Visit the Catholic Education Arizona website at https://catholiceducationarizona.org/ to learn more today!
Now that you know more about Catholic Education Arizona, let’s talk about Arizona Tax Credit vs Deduction: What to Know. Providing tax credits and deductions is a great way to encourage people to donate to qualified organizations. Tax credits are a dollar-for-dollar reduction in the amount of state taxes owed, while deductions reduce the amount of federal income tax owed. Tax credits are more attractive to many taxpayers, particularly those with higher incomes, as they allow the donor to benefit from a larger reduction in their tax liability.
The state of Arizona provides a number of unique individual tax credits that give donors the opportunity to control how a portion of their state tax dollars are allocated. One of these tax credits is the Arizona private tuition tax credit, which allows taxpayers to contribute to Certified School Tuition Organizations that provide scholarships for students to attend qualified Arizona private schools. As with any tax credit, there are certain limitations that must be considered before deciding whether or not to make a contribution. To begin with, the credit is only available to individual taxpayers (corporations and partnerships are not eligible). The amount of the credit that can be claimed each year is limited by the amount of taxes owed at the time of donation.
The maximum tax credit for married couples filing jointly is $2,910, and the amount for a single taxpayer is $1,459. In addition, the taxpayer must submit an online application every school year in order to receive a tax credit for their contributions to STOs. This application covers the Individual, Overflow/Plus, and corporate scholarship award opportunities for children enrolled in private schools. In addition to the private school tuition tax credit, the state also offers a public-school activity/program tax credit for cash donations made to Arizona public and charter schools in support of qualifying activities and programs. This credit is only available to individuals and S corporations, and can be claimed on a Form 323.
While this credit reduces the amount of taxes owed by the taxpayer, it is not a refund and does not exceed the taxpayer’s annual tax liability. Another limitation of this credit is that a taxpayer may not use the activity/program credit to pay for tuition to the same educational institution that received the tax credit, and cannot apply it toward a child’s kindergarten through grade 12 education. Donating to tax credit-eligible organizations is a great way to help children of all ages get the education they deserve, and it’s important to understand the limitations that come with each of these credits in order to maximize their impact. Now that you know more about Arizona Tax Credit vs Deduction: What to Know, it is time to go back to the website of Catholic Education Arizona to find out more today!