Arizona also allows taxpayers to control additional amounts of their tax dollars by supporting public school extra-curricular activities. The maximum credit amount that can be claimed for a married taxpayer is $400 and $200 for single taxpayers. This does not reduce the amount that can be claimed for the private school tax credit. To participate in this type of credit, please visit your local public school district office or website.
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In 1997, the Arizona State Legislature enacted A.R.S. 43-1089, the Arizona Private School Tuition Tax Credit law. This Original Individual Tax Credit law allows Arizona taxpayers to give what they would otherwise owe the state in income tax to a School Tuition Organization (STO), such as Yuma's Education Scholarship Fund for Kids, Inc. (YES Fund for Kids), as a donation instead. In 2012, the Arizona Legislature enacted A.R.S. 43-1089.03, the Overflow Tuition Tax Credit Law (also known as the Switcher tax credit).
After contributing the maximum amount allowed under the Original Tax Credit, all additional contribution amounts are then applied to the Overflow Tax Credit.
The state tax credit maximums change each year according to the percentage increase in the Phoenix Metropolitan Consumer Price Index. After making the donation, taxpayers can claim it on their Arizona tax form to receive a dollar-for-dollar tax credit against their state income tax liability. If the taxpayer has actual Arizona state income tax liability less than the allowable maximum credit, then the law allows a carryover of any unused donation for up to five years. A taxpayer may also be able to claim a federal deduction for the donation. The taxpayer should consult their tax adviser for specific tax advice.
Recommendations are allowed and considered for the tax credits. A donation may not be made for ones own dependent.
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The 2017 Federal tax donation deadline is December 31, 2017. The 2017 Arizona state tax credit deadline for contributions is April 15, 2018, so you can calculate your state tax liability and determine the maximum amount of credit that you should take. It is important to keep the tax deadline dates in mind when making your contribution so that you may claim the credit and donation on your 2017 tax forms. If the contribution is made January 1 through April 15, 2018, then the transaction can be considered a 2017 or a 2018 Arizona tax credit, but must be considered as a 2018 Federal deduction.