Advantage of AZ Qualifying Charitable Organization Tax credit

Support AZ Families

Thanks to the Arizona Charitable Tax Credit, you can donate up to $400 for individual and $800 for married couple and get it right back on your Arizona tax return. You can take both BizELife AZ Charitable Tax Credit in addition to your donation to school tax credit as well.

 


How is a credit different from a deduction?
A deduction reduces the amount of your income upon which the tax is determined. A credit reduces your tax liability as if you had already paid the tax.



How It Works

Step 1

     
Donate to BizELife to support entrepreneurial education

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Step 2

     
File your taxes and claim the credit by using AZDOR Form 321

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Step 3

     
Receive your tax credit!
(Up to $800)

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Tax Credit vs Tax Deduction Example

TAX Credit Example

  • Joe and Mary earned $50,000 this year. They made an $800 gift to BizELife which is a Qualifying Charitable Organization for the tax credit. Their Arizona tax liability based on $50,000 in earnings is $1,680. They can take an $800 credit against their tax liability reducing it to $880.

$1680    Joe and Mary original AZ tax liability
−$800    AZ Charitable Tax Credit for BizELife donation
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$880    Joe and Mary’s final AZ tax liability

TAX Deduction Example

  • Joe and Mary earned $50,000 this year. They made a $800 gift to other charities not qualified for AZ tax credit. Their taxable income is reduced by $800 and their liability is now based on $49,200. In 2017 that means their AZ tax liability is $1,255.
$50,000 Joe and Mary taxable income
−$800    ABC charitable donation (not BizELife)
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$49,200    Joe and Mary reduced taxable income
$1,183 possible AZ tax liability (no other itemize deduction and 2 personal exemptions.

Frequently Asked Questions:

Q: HOW DOES THE TAX CREDIT WORK?

A: Here are some general guidelines about using the Charitable Tax Credit. Please consult your tax advisor for expert advise on your specific tax situation.

  • The gift is from an individual (corporations, foundations, partnerships, etc. do not qualify)
  • The gift is cash (in-kind donations such as toys, books and services do not qualify)
  • The maximum credit allowed for single taxpayers or heads of households is $400, for joint taxpayers it is $800

Q: HOW DO I VERIFY THE ORGANIZATION I SUPPORT QUALIFIES FOR THE CREDIT?

A: Visit the Arizona Department of Revenue website to see if an organization is a qualified charity.

Q: I CURRENTLY USE THE PUBLIC EDUCATION TAX CREDIT. CAN I DO THE CHARITABLE TAX CREDIT AS WELL?

A: Yes, each tax credit is independent. Therefore, you can take advantage of both the Public Education and Arizona Charitable Tax Credits.

Q: CAN MY CHARITABLE DONATION BE MADE THROUGH PAYROLL DEDUCTIONS?

A: Yes. You can make cash contributions through payroll deductions. Please consult with your employer to set up your payroll deduction.

Q: HOW DOES BIZELIFE UTILIZE THE CHARITABLE TAX CREDIT DOLLARS?

A: 100% of all donations go directly to support BizELife members and programs.

Q: DOES THE TAX CREDIT ALSO APPLY TO MY FEDERAL INCOME TAX RETURNS?

A: The Charitable Tax Credit applies only on your Arizona State income tax. However, you may be able to claim a federal tax deduction for the amount donated.

Q. HOW DO I DOCUMENT MY CONTRIBUTION?

A. BizELife will send you a receipt confirming your contribution. This receipt documents your contribution and is necessary to support your tax credit. Payroll deductions also require a pay stub receipt.

Q. HOW DO I FILE FOR THE CREDIT?

A. More information on the tax credit, including how to claim the tax credit on your taxes can be found here.

Q: WHEN IS THE DEADLINE TO CONTRIBUTE FOR 2017?

A: Any donation made on or before April 17th, 2018 can be applied toward your Charitable Tax Credit for your 2017 Taxes.