With the deadline looming, did your company get the tax credit? Here are seven easy steps to taking the corporate tax credit.
Each year, companies that do business in Arizona are eligible to participate in the corporate tax credit program — it’s free to participate, as it’s simply a redirection of your state tax liability to a scholarship program. For doing so, your company can receive a dollar-for-dollar credit. This year’s deadline for credits for this year is looming; has your company taken advantage of the program yet?
The tax credit program has a statewide cap each year, and the fiscal year ends in June; so if your company plans to participate, time is of the essence.
Where does the money go?
Tax credit contributions given through Arizona School Choice Trust are used for scholarships for low-income students to attend private schools across Arizona. Your company can even designate the scholarships to certain schools or parts of town if there are places you do business. Scholarships can not be named for specific students. This program allows companies to invest back in their communities, improve education in Arizona, and do so at no cost.
Your company can publicly announce your participation or remain anonymous. We have hosted many press conferences with check ceremonies promoting a company’s contribution.
These scholarships ensure children get a great education, are headed toward college, and dramatically improve outcomes for the future workforce.
Arizona School Choice Trust is the oldest and most experienced scholarship organization in Arizona. We take very seriously our dedication to helping families across the state whose children would not otherwise have the opportunity for a quality education. All of our families complete an extensive application process to ensure they demonstrate financial need. We allow parents to chose any private school in the state. Our scholarships are awarded on a first-come, first-serve basis. Each year we have thousands of applicants and, often, a long waiting list. Every corporate contribution goes a long way to awarding dozens of scholarships to students on our waiting list. We work closely with our corporate donors to share stories of the impact their donation has made, both with their internal leadership and publicly if they desire.
Here are the seven easy steps to participate in the corporate tax credit:
1. Identify your company’s corporate tax liability.
2. Determine how much you would like to donate versus pay to the state this fiscal year. (Your company can donate the entire corporate tax liability amount.)
3. Contact Arizona School Choice Trust, informing them of the amount you wish to donate. You can send a letter to ASCT’s office P.O. Box 1616, Glendale, AZ 85311; or contact us by email at firstname.lastname@example.org. Include your company’s name, EIN #, amount you wish to donate and contact information.
4. ASCT will file a one-page form with the Department of Revenue asking for approval for the donation/credit. We will send you a copy.
5. The DOR will respond within 20 days on whether or not funds are available under the current fiscal year cap (for the 2010 fiscal year there is $20M available; 2011 is just over $22M).
6. Within 10 days of DOR approval (DOR and ASCT will notify you), your company must send a check or wire to ASCT for the donation.
7. When you file your company’s taxes, you will take the corporate income tax credit on the standard 120 form and file a 335 form as well listing the credit amount.
*Please consult your tax adviser for advice on filing and using your credit. This is only a guide; it does not constitute tax advice.