Arizona Department of Revenue (AZDOR) sanctions various tax credits that support local nonprofits and (summarily) redirect what would be your Arizona tax dollars to these nonprofits. This article addresses the tax credits available to individual tax return filers, with dollar limits that vary based on your filing status. All credits are non-refundable and provide a dollar-for-dollar credit towards your Arizona income tax liability. If your total tax credit contributions exceed your tax liability, the unused portion for the first four (4) credits listed below can be carried forward for up to five (5) years. Please keep copies of your receipts for your tax records and provide them to us at time of tax return preparation.
Please consult the AZDOR lists of eligible organizations each year before giving to organizations for current year tax credit donations. The lists change each year, and organizations may no longer be listed as eligible for tax credits in the current year. For example, if you see a charity on the 2023 Arizona Department of Revenue list, but you are making your donation in February 2024, you should check the 2024 AZDOR lists (not available at time of this article publication) to ensure that the charity is still listed for 2023 tax credit purposes.
The chart for the 2023 tax year dollar limits based on filing status is at the bottom of this article.
Public/Charter Schools *
Contributions made or fees paid to Arizona public, Arizona career technical education district, and Arizona charter schools are eligible for this credit. Fees paid for support of the following are eligible for this credit:
- standardized testing for college credit or readiness offered by a widely recognized and accepted educational testing organization
- the career and technical education industry certification assessment
- preparation courses and materials for standardized testing
- cardiopulmonary resuscitation training
- extracurricular activities, which may include sports, school trips for competitive events, and fine arts programs (note, senior trips or events that are recreational, amusement or tourist activities are not qualified for tax credit purposes)
- character education programs
- from and after June 30, 2019, through June 30, 2024, contributions or fees paid for the following items qualify:
- (a) acquiring capital items, as defined in the uniform system of financial records, including those items listed in section 15-903, subsection c, paragraphs 2 through 8,
- (b) community school meal programs (excludes meal card payments),
- (c) student consumable health care supplies,
- (d) playground equipment and shade structures for playground equipment.
Private School Tuition Organizations (STO) *
There are two (2) private school tuition tax credits. Taxpayers who donate the maximum amount under the first tax credit are eligible to make the additional (second) credit donation. The amount listed below is the maximum amount you may donate, inclusive of both private school tax credits. Your donation will not qualify if you designate a student beneficiary as a condition of your contribution to the STO. You may recommend a specific student, but it may not be a condition of the donation. Also, the tax credit is not allowed if you agree with another person to designate each other’s contributions to the STO for the direct benefit of each other’s dependent, a practice commonly known as swapping. The link to the list of eligible organizations for this tax credit can be found HERE.
Qualifying Charitable Organizations (QCO) *
Cash contributions paid to certain charities that provide assistance to residents of Arizona who either receive Temporary Assistance for Needy Families benefits, are low income residents of Arizona, or are children who have a chronic illness or physical disability are eligible for this credit. The list of eligible organizations at the Arizona Department of Revenue’s website can be found HERE.
Qualifying Foster Care Charitable Organizations (QFCO) *
Cash contributions paid to qualifying foster care charitable organizations are eligible for this credit. The list of eligible organizations at the Arizona Department of Revenue’s website can be found HERE.
Military Family Relief Fund (MFRF)
The Arizona Military Relief Fund provides financial assistance to families of currently deployed service members, post 9/11 military members, and veterans. Unlike the others, this credit cannot be carried forward and is available only to taxpayers receiving a receipt letter from MFRF. Donations to this fund are capped at $1 million annually. See AZ Department of Veteran’s Services at https://dvs.az.gov/donate/military-family-relief-fund-2023 for more information.
2023 Arizona Tax Credits
|Single / Head of Household
|Married Filing Joint
|Public Schools Credit
|Private School Tuition Credits
|Credit for Qualifying Charitable Organizations
|Credit for Qualifying Foster Care Charitable Organizations
|Military Family Relief Fund
|Total Potential Credits
Special rules apply to individuals who are Married Filing Separate. Your tax credit may be limited to 50% of the donation. Please consult your tax advisor.
*Amounts contributed for the credit between January 1, 2024 and April 15, 2024 may be used once as a tax credit on either your 2023 or 2024 Arizona income tax return. Be sure to designate the appropriate tax year when making the contribution if made between 1/1/24 – 4/15/24. Again, for amounts donated 01/01/2024 through 04/15/2024, be sure to consult the 2024 AZDOR tax credit lists for eligible organizations (not available at time of this article publication) to ensure your donation qualifies for a tax credit donation.
HBL is always available to answer any Arizona tax credit questions or any other tax questions you may have. Please contact our office at (520) 886-3181.