Credit for Donations Made to Qualifying Charitable Organizations
The Credit for Donations Made to Qualifying Charitable Organizations is a dollar-for-dollar charitable contribution you can give to 501(c)(3) corporations (nonprofits). With this tax credit you can receive a dollar-for-dollar tax credit, up to $400 filing single or $800 if filing a joint return, on your state income taxes while helping those in need – at no additional cost to you.
As of January 1, 2016, the credit amount has doubled to up to $400 filing single or $800 filing a joint return. The previous amounts were $200 and $400.
How do I claim the credit for contributions to Qualifying Charitable Organizations?
The credit is available only to individuals. You report the name of the Qualifying Charitable Organization you donated to as well as the dollar amount of your donation to the Department of Revenue on Form 321. You must also total your nonrefundable individual tax credits on Form 301 and include all applicable forms when you file your tax return.
Can I also claim a deduction for contributions to Qualifying Charitable Organizations?
You cannot claim both a deduction and a credit for the same charitable contribution on your Arizona return. You can claim a federal income tax deduction as well as a refundable Arizona income tax credit.
Can I claim the credit for contributions to Qualifying Charitable Organizations in addition to other Arizona tax credits?
Yes, you can claim a tax credit for contributions to Qualifying Charitable Organizations in addition to the Public School Tax Credit, Arizona Military Family Relief Fund, the Private School Tax Credit for School Tuition, and Qualified Foster Care Organizations (LSS-SW does not qualify for the Foster Care Organizations tax credit.)
How much can I claim for the credit for contributions to Qualifying Charitable Organizations?
Taxpayers filing as “single” and “head of household” status may claim a maximum credit of $400. Taxpayers that file as “married filing joint” may claim a maximum credit of $800. This is a maximum – you may claim your contributions below this amount as well.
What is the period for making eligible contributions?
Beginning with the 2016 tax year, credit eligible contributions made to a Qualifying Charitable Organization or Qualifying Foster Care Charitable Organization that are made on or before April 15th (the 15th day of the fourth month following the close of the taxable year) may be applied to either the current or the preceding taxable year and is considered to have been made on the last day of that taxable year. Contributions made from January 1, 2017 through April 15, 2018 can qualify for the 2017 tax year.
Is the credit refundable?
A credit is possible only if you have an Arizona income tax obligation and if the credit claimed is less than your Arizona tax obligation. If the credit claimed is more than your current year Arizona tax obligations, the unused credit may be carried forward up to 5 years.
This is not intended to provide tax or legal advice. Please consult the Arizona Department of Revenue (AZDOR.gov), the Internal Revenue Service (IRS.gov), or a tax adviser for specific guidance.