Arizona’s Public School Tax Credit

Arizona has a tax credit for individuals who make contributions to a public school to fund extracurricular activities or for character education programs. This is a dollar for dollar tax credit which directly reduces your state tax liability. The credit is limited to $200.00 for an individual and $400.00 for a married couple filing jointly. This is not a refundable credit, but if your donation exceeds your state tax liability you can carry the credit forward for 5 years or until it is used. Additionally, this contribution can be taken as a charitable deduction on your Federal Tax Return.

The state defines extracurricular activities as activities that require a student to pay a fee such as sports, band, science labs, homework clubs, etc. Senior trips and activities that are for recreational or amusement purposes are excluded from the definition of extracurricular activities. A character education program is a program defined in ARS § 15-719. Character education programs must provide education on at least 6 of the following traits: truthfulness, responsibility, compassion, diligence, sincerity, trustworthiness, respect, attentiveness, obedience, orderliness, forgiveness and virtue. Public schools include charter schools and governmental K-12 schools located in Arizona, private schools, preschools, community colleges and universities do not qualify for this credit. For additional information please view the Arizona Department of Revenue’s publication on School Tax Credits.

To ensure compliance with requirements imposed by the IRS, I inform you that any U.S. federal tax advice contained in this document is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing, or recommending to another party any transaction or matter that is contained in this document.

 

 

Robert K Minniti, CPA, CFE, Cr.FA, CFF, MBA

www.minnitiaccounting.com

www.linkedin.com/in/robertminniti