Arizona Tax Credits - Public Schools

Summer vacations are underway but with the 4th of July just passed, most parents and teachers know that means it is close to time to return to school.  For high school students, this means the start of football season, marching band and other extracurricular activities.  For parents of high schoolers, this means money will be spent in athletics fees, participation fees, etc.  It may also mean money to be spent for other expenses such as ACT or SAT tests.

I know very few people that enjoy spending money, but did you know that money paid to K-12 schools in Arizona may be eligible for an income tax credit?

From the Arizona School Tax Credit Publication 707:
"What are qualified activities or qualified programs for the purpose of the public school credit? 

For the purpose of the public school credit, qualified activities and qualified programs include any of the following: 
  • Extracurricular activities 
  • Character education programs
  • Standardized testing fees for college credit or readiness offered by a widely recognized and accepted educational testing organization
  • Preparation courses and materials for standardized testing
  • The career and technical education industry education industry certification assessment "
Extracurricular activities include athletics, band, choir and other similar participation fees.  It may also include field trip or class trip amounts, if paid to the school.  The standardized testing fees and costs must be paid to the school to be eligible.

The amount that is eligible is $200 for single taxpayers (or head of household), $400 for married filing joint taxpayers.  The payment must be in cash/check/credit card and can not be done by in-kind donations (purchased items donated to the school).

The credit is available to reduce your AZ tax liability dollar for dollar up to the amount contributed or the limit for the filing status ($200/$400).  This credit can be used in conjunction with the other Arizona tax credits (Charitable Tax Credit, Foster Care Organizations Credit, Private School Tuition Credit, and Military Family Relief Fund) up to the amount of each of those credit limits (which I will discuss later on another blog post).

Please be sure to check with your advisor to see is this may be of benefit in your particular situation. Look for my additional discussion on the available tax credits to be coming up.