Arizona Individual Income Tax Credits for 2015

Generally there are few changes to Arizona's individual income tax credits.  Tax credits are better than tax deductions because a deduction only lowers your taxable income but a credit offsets the tax liability, dollar for dollar in the amount of the credit.

The state of Arizona has many tax credits but the most popular are the Working Poor Tax Credit, Qualifying Foster Care Charitable Tax Credit, Arizona Military Family Relief Fund, Fees Paid to Public School and Private School Tuition Organizations.  These credits are non-refundable credits, which means that you can not create a refund solely by donating to these organizations, but these credits act as an offset to your tax liability and may provide a refund of withholding already paid via your paycheck or other tax pre-payments.

The amounts for the tax credits are as listed below:

Working Poor Tax Credit - $200 single/$400 married taxpayers

Qualifying Foster Care Charitable Tax Credit - $200 single/$400 married

Arizona Military Family Relief Fund - $200 single/$400 married

Contributions or Fees Paid to Public School - $200 single/$400 married

Contributions to Private School Tuition Organizations - the maximum credits are $1,067 single/$2,134 married

Qualifications for the credits:

Working Poor Charitable Tax Credit - The Working Poor Tax Credit is for contributions to Arizona based charitable organizations that spend at least 50% of their budget on services to Arizona residents who received TANF (Temporary Assistance for Needy Families), households living below a certain income level, or households containing chronically ill or physically disabled children.  I am partial to Helping Hands for Single Moms (as I am involved with this organization) and Becky Gaylor would recommend ShoeBox Ministry.

For a list of Qualifying Organizations visit this website: List of Qualifying Organizations

Foster Care Charitable Tax Credit - This credit is similar to the Working Poor Tax Credit, but for organizations that might additional criteria in serving qualified individuals.  These organizations can qualify for both the Foster Care Tax Credit and the Working Poor Tax Credit so be aware of that when making your contributions.

For a list of Qualifying Organizations visit this website: List of Qualifying Organizations

AZ Military Family Relief Fund - This credit is administered by the Arizona Department of Veterans Services (Website).  This credit is limited to the first $1,000,000 in donations that are received during the year.  As of the date of writing this entry, they have received $177,000 and based on history they will reach their cap by early December.  If you send your donation after they have reached their cap, they will return the check to you.  To donate you must submit the donation form with your check (AZ Military Family Relief Donation Form)

Contributions or Fees Paid to Public School - Amounts can be made directly to the Arizona school of your choice and to qualify for AZ tax credit, the donation can be made up until April 15, 2016 and taken on the 2015 tax return.

School Tuition Organization - This credit referred to as the STO credit (school tuition organization) has 2 components, the original credit is for donations to scholarships for kids already attending private school and the additional credit (sometime referred to as PLUS or Switcher) is for kids just entering private school or switching from public school to private school.

For a list of Qualifying Organizations visit this website: List of Qualifying Organizations

If you should have any questions about this items, please feel free to contact the office at 602.494.7641 or email info@gaylortaxservices.com

Best regards and many happy returns,

Matt Gaylor