Individual Tax Credit
The Individual tax credit program allows Arizona taxpayers to donate money to qualified STOs and receive a 2023 tax credit of up to $1,308 for married couples filing jointly or $655 for singles. A taxpayer may donate through April 15, 2024 and count their donation as a tax credit in the preceding tax year of 2023.
2024 Individual Tax Credit Donation: Single heads of the household $731 Married couples filing jointly $1459
Overflow / Plus Tax Credit
This new tax credit was signed by Governor Jan Brewer in February 2012 and became effective in August 2012. The overflow tax credit is in addition to the Individual tax credit. A donor must first give the maximum toward the Individual tax credit, but then has the opportunity to give an additional $1,301 if married filing jointly or $652 for single filer for tax year 2023. A Taxpayer may donate through April 15, 2024 and count their donations as a tax credit in the preceding tax year of 2023.
2024 Overflow/Plus Tax Credit Donation: Single heads of the household $728 Married couples filing jointly $1451
Arizona Tax Credit then distributes those funds in the form of scholarships to students through participating private schools. The Individual tax credit / Overflow/Plus tax credit can be recommended toward a specific student and/or a specific school.
Notifying your community of the tax benefits from donating to an STO can help encourage people to have a choice in how they spend their tax money. By helping children succeed, they can get a dollar-for-dollar tax credit on their Arizona state taxes.
Donors participate by making a donation to Arizona Tax Credit and then claiming the appropriate tax credit when they file their state taxes. The credit is used to offset the donor’s Arizona state tax liability and may be carried forward for up to five years. Many families receive donations from relatives, friends, neighbors and coworkers, recommending their children. Those who leverage this program the most successfully are those who spend time explaining the benefits of the program to others and asking them to participate.
The funds available through the Individual tax credit program are available to all students enrolled in private schools. Students may receive awards totaling 100% of their tuition costs for the current school year. A student can receive multiple scholarships from one or more STO. If your student receives more scholarship funds than are needed for the current school year tuition costs, the STO will hold the excess scholarship and will disburse the scholarship to the school when the following school year begins.
Undesignated funds are also available. Although many donors make specific recommendations for a school or student, there are many donors who do not recommend anyone in particular. Therefore, the undesignated funds may be available to you and we encourage you to apply to a variety of STOs.
You may recommend anyone who is not your child or dependent, but the selection committee retains complete discretion regarding all awards. There are no designations or guarantees.
Parents cannot plan to donate to each other’s children; this is called swapping. The law states, “A taxpayer may not claim a tax credit if the taxpayer agrees to swap donations with another taxpayer to benefit either taxpayer’s own dependent.”