If you have any questions, contact your tax attorney or CPA.
Take advantage of the Tax Credit Law – Arizona tax law (ARS 43-1089) allows taxpayers a tax credit if they contribute to extracurricular activities in public schools. The allowable tax credit limits are as follows: $400 for a married COUPLE filing a joint return.
A tax credit is a dollar-for-dollar deduction in the actual tax owed. (A regular deduction only allows you to subtract the contribution from your taxable income). It is not a deduction. It basically means that you direct how your tax dollars are spent. If you owe $40 in Arizona income tax and you send the school $40 then you don’t pay another dime to the State. If you owe $600 in Arizona income tax and you as a single person send $200 or $400 as a married couple then you will owe the State of Arizona $400 if you are single and $200 if you are married.
Who is eligible? This tax credit is available to all Arizona INDIVIDUAL taxpayers regardless of whether they have children in school. (Note: this credit can only be claimed on individual tax returns.
Contributions from businesses are welcome and are deductible, but cannot be claimed as a credit).
What is an extracurricular activity? Extracurricular activity means any optional, non-credit educational or recreational activity that supplements the education program of the school. This includes activities such as athletics, JROTC, Fine arts, clubs, course related clubs, service clubs, Student Government, 9special student activity programs, etc.
The following website has a list of all qualifying foster care charitable organizations and all qualifying charitable organizations associated with the Arizona Tax Credit Program.