AZ Tax Credits – Control Where Your Dollars Go

You have found Us! We are here to help with everything Arizona State Private School Tuition Tax Credits. I know it is a bit early to be thinking about 2013 taxes.. Or maybe not. School is or has started. Before we know it will be Halloween, Thanksgiving and Christmas/Hanukah. What is left? Tax Time! Here is some additional information about the ins and outs of the AZ Private School Tuition Tax Credit is…

As a taxpayer, you are allowed to make two types of credit-eligible contributions for private school tuition. Contributions must be made to a qualified “school tuition organization” (STO) – Hey, that’s us again!

“Original” Credit. Under the first type of contribution (for the “original” credit), the maximum credit amount that may be taken for tax year 2013 is $1,034 for married taxpayers filing jointly and $517 for single taxpayers. The tax credit for contributions to private school tuition organizations is claimed by the individual taxpayer on Form 323.

“PLUS” Credit. An individual may claim an additional credit for making an STO contribution if the amount contributed is greater than the maximum amount that can be claimed on Form 323. The maximum credit amount that may be taken for tax year 2013 is $514 for single, unmarried head of household and married filing separate filers and $1,028 for married filing joint filers. This tax credit is claimed on Form 348.

Combined, the two private school tuition credits allow taxpayers to contribute a total of $2,062 (married) or $1,031 (single).

In making a contribution, the taxpayer may designate a private school to receive the contribution and can request that the contribution be applied to the tuition of a specific student. The decision on how much, if any, of the contribution will be applied to a designated student rests solely with the STO and depends on many factors (e.g., whether the student has applied for tuition assistance, the relative financial needs of other applicants, etc.). Unfortunately for parents of private school students, credit-eligible contributions may not be designated for a student who is a dependent of the contributor. In other words, friends, relatives, neighbors, etc., may request that their contribution benefit a particular student, but the parents of that student may not. Parents are still eligible for the credit – provided they do not earmark their contribution for their own child.

In all of the above case, contributions that reduce the taxpayer’s state income tax liability below zero can be carried forward to future tax years.

Don’t worry about the necessary tax forms. We will be post them on our website to help you not have to try and locate them. We are here to help! Just Click on the Big Red Donate Here Button!

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