Did you know that Arizona law allows taxpayers to receive a tax credit by simply making a donation to a local charity organization?
Through the Working Poor Tax Credit by the state of Arizona, joint filers can receive a credit of up to $400, while individuals are eligible for up to $200 — but time is running out as donations must be received by your nonprofit of choice by the end of the year.
Below are some of the most frequently asked questions we get this time of year regarding the tax credit as well as resources for additional assistance.
Q: What is the tax credit?
A: The tax credit, called the Working Poor Tax Credit by the state of Arizona, is a dollar-for-dollar charitable contribution you can give to 501 (c)(3) nonprofit. With the credit, you can receive a dollar -for-dollar tax credit, up to $400, on your state income taxes while helping our community’s youth — at no additional cost to you. You can either pay the State or you can pay the nonprofit organization directly.
Q: How do I qualify for Charitable Tax Credits?
A: If you itemize deductions on your Arizona state tax return, you may qualify for the tax credit. Donations can be made by cash, check or credit card.
Q: What is the maximum I can give?
A: We appreciate any donation you are willing to give, but the maximum tax credit for filling as a married couple is $400 and $200 if filing single.
Q: When is the deadline to contribute for 2012?
A: Any organization must receive your tax credit contribution by Monday, December 31, 2012.
Q: I currently use the Public Education Tax Credit. Can I do this tax credit as well?
A: Yes. Each tax credit is independent. Therefore, you can take advantage of both the Public Education and Working Poor Tax Credits.
Q: How do you nonprofits utilize these tax credit dollars?
A: General to provide critical services. For us, all tax credit dollars will be used by the Boys & Girls Clubs of Greater Scottsdale to provide more than 100 youth development programs at the organization’s nine branches and 12 outreach sites, including sports, fitness and recreational programming; field trips and summer camp programs; and healthy meals and dental services, to name a few.
Q: How do I know the organization I support qualifies for the credit under this program?
A: Click here. Or, to request a list or to see if an organization appears on the list, call the Department of Revenue in Phoenix at (800) 342-4090.
Q: Can a business make a contribution and claim the tax credit?
A: No. Only individual taxpayers may claim this tax credit.
Q: Can I make contributions to more than one qualifying charitable organization?
A: Yes, but the total Arizona Assistance to the Working Poor Tax Credit allowed is still
$200 per individual or $400 for married couples filing jointly, regardless of the number of organizations you support.
Q: Does the tax credit also apply to my federal income tax returns?
A: No. The Charitable Tax Credit applies only on your Arizona State income tax. However, you may be able to claim a federal tax deduction for the amount donated.
Should you have questions, please consult your tax advisor.