In 1997, the Arizona State Legislature enacted A.R.S. 43-1089, the Arizona Private School Tuition Tax Credit law. This Original Individual Tax Credit law allows Arizona taxpayers to give what they would otherwise owe the state in income tax to a School Tuition Organization (STO), such as Yuma's Education Scholarship Fund for Kids, Inc. (YES Fund for Kids), as a donation instead.
In 2012, the Arizona Legislature enacted A.R.S. 43-1089.03, the Overflow Tuition Tax Credit Law (also known as the Switcher Tax Credit). After contributing the maximum amount allowed under the Original Tax Credit, all additional contribution amounts are then applied to the Overflow Tax Credit.
The state tax credit maximums change each year according to the percentage increase in the Phoenix Metropolitan Consumer Price Index. After making the donation, taxpayers can claim it on their Arizona tax form to receive a dollar-for-dollar tax credit against their state income tax liability. If the taxpayer has actual Arizona state income tax liability less than the allowable maximum credit, then the lax allows a carryover of any unused donation for up to five years. A taxpayer may also be able to claim a federal deduction for the donation. The taxpayer should consult with their tax adviser for specific tax advice.
Donor scholarship recommendations are allowed and considered for the tax credits. A donation may not be made for ones own dependent.
The 2019 Arizona state tax credit deadline for contributions is April 15, 2020, so you can calculate your state tax liability and determine the maximum amount of credit that you should take. If the contribution is made January 1 through April 15, 2020, then the transaction may be considered a 2019 or a 2020 Arizona tax credit.
We understand that many families have moved from another state, leaving behind a support system of family and friends. Since YES Fund for Kids is a charitable 501c(3) organization, out of state donors may be eligible to claim a charitable tax deduction (not a full tax credit) on their Federal and/or state tax returns. In this situation, there are no minimum or maximum contribution amounts.
Arizona allows individuals to redirect a portion pr all of their payroll tax withholding amount in order to make a contribution to a School Tuition Organization. This is great news for taxpayers. Now you can "take the credit" to support school choi8ce without having to adjust you budget.
AEA Federal Credit Union provides loans to individuals who desire participating in the tax credit program. This allows donorw to participate in the Tax credit program without burdening their budget.
Notice: A School Tuition Organization cannot award, restrict, or reserve scholarships solely on the basis of a donor's recommendation. A taxpayer may not claim a credit if the taxpayer agrees to swap donations with another taxpayer to benefit either taxpayer's own dependent. A.R.S. 43-a603(c).
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