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Arizona Tax Credit, ASCT

Is Your Business Taking Advantage of the Arizona Tax Credit Program?

Is Your Business Taking Advantage of the Arizona Tax Credit Program?

Did you know that Arizona businesses can redirect their entire state tax liability to scholarship organizations that help improve education in Arizona statewide?  If your business is not taking advantage of these credits, please read on.

The Program

The Arizona Tax Credit program allows any C-corporation that pays Arizona corporate income tax to redirect that liability to state approved school tuition organizations (STOs) that provide K-12 education scholarships for economically-disadvantaged children. It costs your business nothing; it’s simply a redirection of tax dollars your business must pay each year. Corporate tax dollars can be given to STOs to fund scholarships for low-income children or designated specifically for scholarships for displaced and disabled students.

Corporations receive a dollar-for-dollar tax credit with the state, therefore allowing corporations to redirect funds that they must already pay to the state of Arizona to the STO at absolutely no cost.

The process to enroll is very simple, and the Arizona School Choice Trust (ASCT) can handle all the paperwork for your corporation. Read more information about the program on ASCT’s website asct.org.

How do these dollars help?

Every single scholarship ASCT gives out changes the course of a student’s life forever and gives a child a chance at graduating, going on to college and becoming a productive member of Arizona’s workforce and business community.

Here’s one example of ASCT’s success stories: Jorge has been on scholarship from ASCT for nearly a decade and is now a senior at Glendale Christian Academy. He says the school has transformed his life and plans to go on to college to pursue a BS in business management with a minor in music and one day open his own business.

How can your business participate?

The process is simple. To take advantage of this tax credit, a corporation contacts ASCT and pledges to make a contribution of $X amount (any amount up to the company’s state tax liability for the year).

ASCT then completes a one-page application for that amount and submits it to the Arizona Department of Revenue (ADOR) for the corporation. If the tax credit cap (more than $24 million this fiscal year) has not been met, the ADOR approves the request within 20 days. The corporation has 10 days from the date of approval by the ADOR to make the contribution. The corporation takes the tax credit on its tax return, but may carry any unused credit forward for up to five years. The corporation may take either the federal deduction or the Arizona state credit, but not both. To claim the credit, the corporation lists the credit on the standard 120 form and files a 335 form attached to the return.

Arizona School Choice Trust mission is to provide hope and opportunity to low-income families by providing tuition scholarships to enable their children to attend private elementary and secondary schools (K-12). We believe that a solid primary education is the key to giving children the opportunity to succeed in life and achieve their dreams, and it is key to providing Arizona a strong, educated workforce.

ASCT is the oldest and most experienced STO. ASCT focuses its scholarships on low-income students who qualify for the National School Lunch Program.  Since 1993, it has  provided more than 10,000 scholarships.

Visit asct.org to find out more about how your business can take advantage of these tax credits and change the lives of students across the state.