The Arizona state offers a wide range of individual tax credits that include the Public School Tax Credit, and the Arizona Charitable Tax Credit. Such tax credits enable taxpayers to donate in charities and receive “dollar-for-dollar” deductions in the Arizona state tax liabilities.
Most of the people are aware of this type of credit facility but are not aware of the details pertaining to it. Most taxpayers don’t know the right way to take complete advantage of tax credits of Arizona that includes multiple tax credits and ways to carry forward tax benefits over several years.
This guide will take you through the basics of the Arizona tax credit.
The Arizona Charitable Tax Credit
The AZ charitable tax credit comprises of two non-refundable income tax credits for benevolent charities to Qualifying Foster Care Charitable Organizations, and “Qualifying Charitable Organizations”.
The tax credits offer dollar-for-dollar tax advantages to taxpayers that enable them to lessen their state tax obligations per dollar contributed to donations, up to the maximum permissible tax credit limits.
AFFCF stands for The Arizona Friends Of Foster Children Education. It is a qualifying Foster Care Organization wherein any contribution a person makes in this organization, helps you lower the Arizona state tax bill.
What is the maximum tax credit limit for making charitable donations?
The maximum permissible limit for donation to Qualifying Charitable Organizations is $800 for joint filling by married people, and $400 for separate filing by single, or married people.
The maximum tax credit for donations to Qualifying Foster Care Charitable Organizations is $1,000 for joint filling by married people, or $500 for separate filing by single, or married people.
Important Guidelines To Avail The Charitable Tax Credit in Arizona
- Donations have to be made by individuals. Foundations, corporations, and partnerships do not qualify under this act.
- Donations have to be only in cash. Some types of donations that do not qualify for it is property donations, or donations of books, services, and toys.
- Donations have to be made to Qualifying Foster Care Charitable Organizations, and Qualified Charitable Organizations. It has to be certified by the Arizona state. Gifts to non-approved charities aren’t qualified under the Arizona Charitable Tax Credit.
- Credits that aren’t applied to tax compulsions for the present tax year are passed to the coming tax years.
With this guide, taxpayers must become aware of the right ways to take advantage of Arizona state tax credits.