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Arizona Charitable Tax Credit Changes – NEW INCREASED LIMITS for 2016

Posted Jan 18, 2017

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Arizona Governor Doug Ducey recently signed into legislation SB 1216 (found here), which increases 2016 charitable tax credit donation limits. The bill was introduced to allow individuals to give more to nonprofit organizations while allowing them to take larger dollar-for-dollar tax credits, subject to income tax liability thresholds and the below caps. The bill also separated out the Foster Care credit (previously “housed” under the Qualifying Charitable Organization credit) so that taxpayers can effectively offset their tax liabilities in amounts more than double the prior law amounts. SB 1217 (found here) was signed into action alongside SB 1216, changing the donation due dates for the Qualifying Charitable Organization tax credit and the Foster Care tax credit to April 15th of the following year.

New 2016 limits and due dates:

Type of Credit Donation due date for tax year 2016 Single / Head of Household cap Married Filing Joint cap Which nonprofits can I donate to for this credit?
Qualifying Charitable Organization 4/15/2017 $400.00 $800.00 2016 Qualifying Charitable Organizations
Foster Care Charitable Organization 4/15/2017 $500.00 $1,000.00 2016 Foster Care Organizations
Public School Tax Credit 4/15/2017 $200.00 $400.00 Look up Arizona public schools here
Private School Tuition Tax Credit (Forms 323 and 348) 4/15/2017 $1,087.00 ($545 – Form 323;$542 –   Form 348) $2,173.00 ($1,090 – Form 323;$1,083 – Form 348) 2016 School Tuition Organizations qualified for the Arizona tax credits
Military Family Relief Fund Tax Credit* 12/31/2016 $200.00 $400.00 Download the form and payment instructions here

As a result of the above increases in caps, if you have an Arizona tax liability large enough to absorb the tax credits, married couples and single/heads of household taxpayers are eligible for up to $4,773.00 and $2,387.00 in 2016 Arizona tax credits respectively. Should you have questions on this or how much you should give to offset your anticipated 2016 Arizona tax, please contact your tax professional.

You can read more on SB 1216 here.

*Note: the Military Family Relief Fund tax credit is subject to a donation limit of $1M in aggregate per year, meaning once $1M has been donated for the year, the credit is no longer available. In past years, the credit typically reaches the cap by Thanksgiving weekend, so if you plan on making this tax credit, we strongly advise doing so prior to late November. Also ensure you get your receipt for it. Your tax practitioner is not allowed to submit for this tax credit without a copy of the receipt/donation letter, so when it comes in the mail, make sure it gets included with the source documentation you provide to your tax practitioner.  As of October 14th 2016, the Veteran’s fund had reached $528,705 of the 2016 $1M cap.

 





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