Arizona's Charitable Tax Credits


Why pay Arizona taxes when you can donate instead? Believe it or not, these donations help reduce demand on Arizona government programs.


Summary of the 2018 Arizona Charitable Tax Credits:

Arizona Military Family Relief Fund Credit

MFS/Single $200 | MFJ $400

Must contribute in same year as deduction/credit is claimed. This is limited to $1,000,000 of all contributions –contribute early in the year as this fills up fast!


Qualifying Charitable Organizations

MFS/Single $400 | MFJ $800

Contribute by 04/15/2019 for choice of either the 2018 or the 2019 tax year.


Qualifying Foster Care Charitable Organizations

MFS/Single $500 | MFJ $1,000

Contribute by 04/15/2019 for choice of either the 2018 or the 2019 tax year.


Arizona Public School Tax Credit

MFS/Single $200 | MFJ $400

Contribute by 04/15/2019 for choice of either the 2018 or the 2019 tax year.

See also Arizona Publication 707 – School Credits


School Tuition Organization Tax Credit

MFS/Single $1,107 | MFJ $2,213

Form 323, up to $555 MFS/Single, $1,110 MFJ

Form 348, up to $552 MFS/Single, $1,103 MFJ

Contribute by 04/15/2019 for choice of either the 2018 or the 2019 tax year.


TOTAL credits available MFS/Single $2,407 | MFJ $4,813


Q) Federal or State Standard deduction vs itemized. If I take a standard deduction instead of itemizing my deductions, can I still claim qualified credits?


A) YES!
You are not required to itemize your Federal or Arizona deductions to claim state donations credits. Actually, it is possible you may take a Federal standard deduction and itemize Arizona because Arizona doesn’t have the AGI limitation on medical expenses.

Q) I love XX Organization; can I just contribute $2,407/$4,813 to the one charity?

A) Not really. The total of the credits available are capped at the amounts for that type of organization. Further, you do not have to contribute it all to that one organization – for instance – you could give $10 each to a hundred public schools, but you’ll only be able to take credit on your capped max of $200 ($400 MFJ).

Q) I file Married Filing Separate and my spouse doesn’t do any of these credit donations; can I use them all on my separate return?

A) Not really. This is where things can get a little more complicated. The limits are tied to the individual taxpayer more than to the filing status. Community Property rules sometimes can make a difference, but in this case you’d want to be very careful to expect more of a credit that what you’d be able to claim.

Q) Will the Proposed IRS regulations on limiting Federal deductions on these types of donation affect me?

A) Undoubtedly partially - The proposed regulations provide exceptions for dollar-for-dollar state tax deductions and for tax credits of no more than 15 percent of the payment amount or of the fair market value of the property transferred. A taxpayer who makes a $1,000 contribution to an eligible entity is not required to reduce the $1,000 deduction on the taxpayer's federal income tax return if the state or local tax credit received or expected to be received is no more than $150.

The proposed regulations were effective August 27, 2018. Anything on or before that date is still a dollar for dollar credit as well as charitable contribution. Anything after that date is subject to the 15% charitable contribution, but you still get the full dollar for dollar state tax credit.

Talk with us to determine if taking advantage of this opportunity is right for you!