How does the Arizona Tax Credit Program Work?
The Arizona State Tax Credit program allows you to make a donation to an eligible organization and receive a dollar-for-dollar credit against Arizona state taxes owed. These donations count as charitable contributions and may be deducted on your federal return if you itemize your deductions.
Donating to tax credit eligible organizations will most likely leave you in a tax neutral situation – meaning you’ll pay about the same total amount whether you use the tax credits or just pay the tax. But by donating you get a say in how the money is spent by choosing which of the tax credit eligible organizations you contribute to.
You can contribute up to the amount of your expected Arizona tax liability. If you contribute more than your total state tax amount, the credits can be carried forward five years, so not to worry if you end up with more credits than taxes. In general, you must make your tax credit donations by April 15, 2018, in order for them to apply to the 2017 year. You can find additional information on the Arizona Dept of Revenue state tax credit page.
Arizona Credit for Donations Made to Qualifying Charitable Organizations (formerly know as the “Working Poor Credit”)
Contribution amounts eligible for credit: $400 for single filers/ $800 for joint.
The Arizona Department of Revenue provides a list of qualifying charitable organizations. This credit is claimed using Form 321, and an additional Form 301 is also required.
Sutton Accounting & Tax Services (928) 493-2377 www.suttonaccounting.com