Maximize Control of Your Arizona Tax Dollar
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The State of Arizona has announced it has moved the deadline for filing and paying state individual 2020 income taxes from April 15 to May 17, 2021. Additionally, the Arizona Department of Revenue advises taxpayers they now have until May 17 to contribute to certified qualifying charitable organizations, qualifying foster care charitable organizations, school tuition organizations, and public schools to claim the tax credits on their 2020 individual income tax return.
In 1997, the Arizona State Legislature enacted A.R.S. § 43-1089, The Arizona Individual 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. 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). This tax credit was created with the primary purpose of assisting students who are switching from a public school to a private school. After contributing the maximum amount allowed under the Original Tax Credit, all additional contribution amounts are the applied to the Overflow Tax Credit. This additional tax credit not only means that taxpayers may control more of their tax dollars, it also means that there will be more scholarship dollars available to assist students with school choice. Studies show that this is a savings to the state because less is spent on educating a child in a private school.
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 tax law allows a carryover of any unused donation for up to five years. The taxpayer should consult with their tax advisor for specific tax advice.
Scholarships are awarded from funds in which donors are utilizing the Arizona Individual Private School Tuition Tax Credit by making contributions each year. The law requires that 90% of the donation go for grant/scholarships, we currently award 96% of funds received, while retaining only 4% to cover the cost to operate our program. Donor scholarship recommendations are allowed and considered in determining awards. Financial need will also be considered when awarding scholarships. All final decisions in awarding scholarships are at the discretion of the YES Fund for Kids board of directors. Priority will be given to students and siblings on the YES Fund wait list. A donation recommendation may not be made for ones own dependent.
The 2020 Arizona State Individual Income Tax Credit deadline for contributions was May 17, 2021. The 2021 Arizona State Individual Income Tax Credit deadline for contributions is April 15, 2022, so you can calculate your state tax liability and determine the maximum amount of credit that you should take. If the contribution is made between January 1 through April 15, 2022, then the transaction may be considered a 2021 or a 2022 Arizona tax credit.
For general information about school tax credits, see Arizona Department of Revenue School Tax Credits Publication #707
The 2021 Arizona State Individual Income Tax Credit amounts have increased.
2021 Individual Private School Tax Credit Maximums
|Single Taxpayer||Tax Credit Amount||Married Tax Filers||Tax Credit Amounts|
|Original Tax Credit||$611||Original Tax Credit||$1,221|
|Overflow Tax Credit||$608||Overflow Tax Credit||$1,214|
|Combined Total||$1,219||Combined Total||$2,435|
Lesser donations are welcome. Monthly donations are also an option by using this Recurring Donation Form
Donation by Check
Print the 2021 Donation Form , complete it, and mail it along with your check made payable to Yuma’s Education Scholarship Fund for Kids, Inc. at the address listed on the form. A tax receipt will be mailed to the donor once funds have been collected by YES Fund for Kids.
Tax Credit Loans
For many years, AEA Federal Credit Union has provided the option of Tax Credit Loans, allowing individual donors to participate in the tax credit program without burdening their budget. This option is available from October 1 through December 31. The loan is written at 0% interest A.P.R., provided the loan is paid back by May 31 of the following year. Visit AEA Federal Credit Union for more information and the loan application.
Out of State Donations
We understand that many families have moved from another state, leaving behind a support system of family and friends. Since Yuma’s Education Scholarship Fund for Kids, Inc. is a charitable 501c(3) organization, out of state donors may be eligible to claim a charitable tax deduction (not a full tax credit) on their Federal and/or state tax returns. In this situation, there are no minimum or maximum contribution amounts. The taxpayer should consult with their tax advisor for specific tax advice.
Claiming the Tax Credits
Original Tax Credit is claimed on Arizona Tax Form 323 . This form is usually generated by the tax preparer or tax software program.
Overflow/Switcher Tax Credit is claimed on Arizona Tax Form 348 .This form is usually generated by the tax preparer or tax software program.
Public School Tax Credit
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 tax credit does not reduce the amount that can be claimed for the private school tax credits. A taxpayer may participate in multiple tax credit options each tax year. To participate in this type of credit, please visit your local public school district office or website.