Each year Arizonans have a choice when it comes to their taxes. Not just who will file them or when, but even where those tax dollars will go—and it costs you nothing. This is all made possible through charitable tax credits. There are two tax credits available to Arizona taxpayers, one for contributions to a Qualifying Charitable Organization and one for contributions to a Qualifying Foster Care Charitable Organization.
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These tax credits don’t compete with other Arizona tax credits like the Public School Tax credit or contributions to School Tuition Organizations, and they benefit hundreds of organizations in Arizona that provide essential service and care to thousands of Arizona residents. In fact, there are 1,257 Qualifying Charitable Organizations and 58 Qualifying Foster Care Organizations, each serving hundreds of children and families.
While this program has been around since 1998 and has grown and changed significantly over the years, it is still estimated that less than 10% of Arizona taxpayers take advantage of this tax credit. So let me give you four reasons why you should.
One: Non-profit organizations meet the needs Governments cannot. Governments were formed to help keep order and assist people, but it’s not possible, or prudent, for government to solve all problems. Instead, they often partner with non-profit organizations, who are deeply rooted in the communities they serve, to provide the most appropriate aid. While trust in government has been decreasing for years, falling to less than 20%, the PEW Research Center reports trust in non-profits among Americans is still above 50%. It’s easy to find trustworthy organizations to support by looking them up on charity assessment tools like Charity Navigator or GuideStar. The truth is non-profit organizations are well-versed in the problems of their communities and the possible solutions to those problems. They know what needs to be done and the best way to support is to make sure they have the resources they need.
Two: Non-profits create economic growth. The ASU Lodestar Center for Philanthropy recently shared that Arizona’s non-profit sector, if treated as an industry, would rank as the sixth largest industry in the state, employing more than 222,000 employees statewide. The same report noted that the median wage for non-profit workers exceeds the state median wage. This means not only are non-profits creating jobs for hundreds of thousands of Arizonans, but these jobs are also likely providing a livable wage. Arizona has struggled to balance its budget in recent years, despite a strong economy, and some would like to place blame on Arizona’s tax credits, but reducing these tax credits would be a huge financial blow to one of Arizona’s largest industries.
Three: It costs you nothing. Taxpayers who take advantage of these two tax credits receive a dollar for dollar tax credit against their state tax liability. For 2024, the maximum QCO credit for an individual was $470 or $938 for a couple filing jointly. The maximum QCFO credit was $587 for an individual or $1,173 for couples. The amounts will be increased in 2025 to $495 for an individual contribution to a QCO and $618 for an individual, or $1,234 for couples, to a QFCO.
Four: It feels good. The most obvious and greatest reason for taking advantage of Arizona’s charitable tax credits is to help those in need. When you make a contribution to an Arizona non-profit you’re becoming a part of their mission. Whether that mission is empowering disadvantaged populations, feeding the hungry, or improving your community, your gift really does make a difference. When we support those who need help, we rise the tide for all of humanity and that’s more important than any tax benefit.
These tax credits not only benefit these organizations, and the individuals they serve, with unrestricted funds they can use as needed, but they also provide a benefit to the taxpayer and to the state. The good news is it’s not too late to claim this tax credit for yourself. Taxpayers have until the tax deadline to make a donation and claim the credit on the previous year’s taxes.
So speak to a tax professional, research a credible non-profit organization and make your contribution today!
Author: Justin Duran is vice president development and communications at Child Crisis Arizona, serving vulnerable children, youth, and families and committed to ending child abuse and neglect through prevention, education, and intervention programs. For more information, visit www.childcrisisaz.org.
