Tax Credits

Charitable Tax Credit

Did you know The Arc of Tempe is a Qualifying Charitable Organizaion (QCO) through the Arizona Charitable Tax Credit program? Now, you can receive a dollar-for-dollar refund on your next tax return — all while helping The Arc continue to grow.

FAQs

What is the Arizona Charitable Tax Credit?

The Charitable Tax Credit is a dollar-for-dollar charitable contribution you can give to 501(c)3 organizations. You can receive a dollar-for-dollar credit – up to $400 for individuals and $800 for married couples filing jointly – by redirecting your state taxes via the Arizona Charitable Tax Credit.

I can't afford to spend that much. Can I donate less and still get the credit?

Any amount up to $400 ($800 for married couples) can be applied toward your tax liability. If you want to make the biggest impact but can not donate one large lump sum you can break it up into monthly payments ($33.33 a month for individuals or $66.66 a month for married couples.)

How does the Charitable Tax Credit (CTC) work?

If you make a donation to an Arizona Qualified Charitable Organization (QCO), you can take a credit against your Arizona state income taxes. The Arc of Tempe is a qualified charity. A credit is better than a deduction, as a credit is a dollar for dollar reduction in your tax liability.

Can I donate to both School Tax Credit and the Charitable Tax Credit?

The state of Arizona has a number of independent tax credits. The Public School – Extra-Curricular Tax credit and the Private School – Tuition Organization credits are two of these. Each work similarly, yet independently. As long as your tax liability exceeds the credit parameters of each, you can take advantage of the many tax credit programs available including CTC.

Will I be refunded if I donate more than I owe?

First, be careful NOT to confuse “what I owe” with “what is my tax liability.” You may be getting a refund because you had more taxes withheld (from your paycheck, pension, other sources, etc.) than what your liability was. In this case, if you qualify for the CTC, you would get a larger refund. The direct answer to the above question is you cannot get a refund if you donate more than your income tax liability; however, any unused contribution may be carried forward and used up to 5 years after the donation.

Is there a limit to how much credit I can receive?

Yes. Your contribution amount, not to exceed $400 ($800 if married filing jointly). Otherwise there is a limit based on your income tax liability as discussed above.

How do I file for the credit?

You can file for the CTC when you file your income tax return for the state of Arizona. Arizona Forms 321 and 301 are necessary to claim the refund (available at the end of the year).

What is the last day I can donate?

New 2016 law extends the contribution date for these tax credit donations to April 15th of the following year similar to your IRA contributions.

When will I receive a receipt from The Arc of Tempe?

A tax receipt will be sent by mail within two weeks of your donation. You will also receive a tax receipt at the end of the year for the total amount donated to The Arc of Tempe through the tax credit program for the whole year. This means that if you choose you can donate a small amount all year long rather than doing one large donation a year.

If I donate on April 15th of the following year, do I still get the credit?

The IRS will view the transaction date as the point of reference.

Do you have to itemize to qualify for the CTC?

It is not necessary to itemize.

Can I make contributions to more than one Qualifying Charitable Organization (QCO)?

The total Arizona Charitable Tax Credit allowed is $400 per individuals and $800 for married couples filing jointly regardless of how many organizations you contribute to.

Where can I get more information?

You can get more information on the Arizona Charitable Tax Credit by visiting the Arizona Department of Revenue’s website or by calling Taxpayer Assistance at 602.255.3381 and 800.352.4090.

The Arc promotes and protects the human rights of people with intellectual and developmental disabilities (IDD) and actively supports their full inclusion and participation in the community throughout their lifetimes.

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