Catholic Education Arizona “Take the Credit”
If you are someone who pays Arizona income taxes, you are able to make a donation to Catholic Education Arizona and claim the donation back as a tax credit. This credit will reduce your income tax liability for 100% of what you donate, up to the maximums allowed for the current year. A credit does not necessarily equal a refund, it simply reduces what you owe to the state, and could potentially result in a refund if you also pay taxes to the state out of your paycheck throughout the year.
What is a tax credit?
A tax credit is not a tax deduction. A tax credit is a dollar-for-dollar reduction in the actual tax owed. For example, if you owe $1,000 in state income taxes and you donate $750 to Catholic Education Arizona, you can subtract the $750 from your state tax bill and pay the state just $250.
Did you know…
That Arizona is one of the few states to have a law that allows taxpayers to re-direct tax dollars to a qualified Student Tuition Organization (STO) allowing the taxpayer to receive a dollar for dollar tax credit on their state taxes.
That it is easy to make a donation until April 15 of the qualifying school year to Catholic Education Arizona.
That as an Arizona taxpayer, an individual may claim a credit for making a donation to Catholic Education Arizona and these donations are then used to fund scholarships to Our Lady of Mt. Carmel Catholic School students with financial need.
That there is new contribution amounts for 2016. A donor may now allocate up to $1,087 if they are single or head of household or up to $2,173 if they are married and filing jointly.
What do I need to do in order to redirect my tax dollars to Catholic Education Arizona?
- Go online to catholiceducationarizona.org and complete the donor form. You can mail in a check or pay online with a credit card.
- Catholic Education Arizona will mail you a receipt of the amount you redirected for your taxes.
- It is that simple!
What is the deadline to “redirect” my tax dollars to Catholic Education Arizona and receive the tax credit?
Your donation to Catholic Education Arizona must be either postmarked by April 15th or received online by midnight on April 15th to be eligible for the Arizona dollar-for-dollar tax credit on the previous year’s Arizona state tax filing.
Will I get a refund for my donation to Catholic Education Arizona?
Depending on how much you pre-paid in taxes throughout the year, one of several things could happen when you file your state taxes after making your donation:
- What you owe is reduced, and you pay the difference to the state.
- You overpay on your taxes, and you get a refund from the state.
- You donate in excess of your liability and the remaining credit can be carried forward and used to offset state income taxes for up to five years.
Can my family and friends redirect their state tax dollars to Catholic Education Arizona and recommend Our Lady of Mt. Carmel Catholic School?
Yes! As long as they pay taxes in the State of Arizona they can redirect their tax dollars to benefit the students at OLMC. When making their donation, make sure they designate Our Lady of Mt. Carmel Catholic School.
Are donations to Catholic Education Arizona also eligible for a federal income tax deduction?
A donation may be eligible for a federal deduction. Donors should consult their tax advisor for specific tax advice. The April 15th deadline does not apply when considering the federal deduction.
Is there a way to make a monthly contribution to Catholic Education Arizona rather than making one large payment to receive the dollar for dollar tax credit?
Yes. Scheduling your contribution to Catholic Education Arizona over the entire year makes good financial sense. It is much easier to make 12 smaller contributions than one large one. The total of all contributions must be made by April 15th of the following year that you are claiming your credit. You cannot claim the credit and then begin to make schedule contributions.
I work for a Corporation. Can they redirect their tax dollars to Catholic Education Arizona to benefit Our Lady of Mt. Carmel students?
In 2006, the Corporate Tax Credit was added to allow C-corporations to redirect their tax liability. In 2009, the legislation was expanded to allow insurance companies to contribute their premium tax liability as well. 2015 brought additional expanded legislation to allow for S-corporations to take the credit, too. Companies are allowed a tax credit of up to 100% of their corporate tax liability or in the case of insurance companies 100% of their insurance premium sales tax. Each year the State of Arizona puts a cap on the total corporate funds available under the Corporate Tax Credit program. The annual cap for fiscal year 2017 is $61.9 million. Submissions must be made through a qualified School Tuition Organization.
How can I apply to receive a scholarship for my student from Catholic Education Arizona?
To apply for Catholic Education Arizona, families must complete an online application to www.fairapp.com. Application deadlines do apply. For further information please visit catholiceducationarizona.org.