AZ Tax Credits

Arizona has a number of tax credits that reduce your AZ tax liability.

All of Arizona's tax credits are non-refundable:

• A refundable credit is a tax credit that is refunded to the taxpayer no matter how much your tax liability is.
• A non-refundable credit means that you will only receive a benefit to the extent of your Arizona Tax Liability.

You will not save any money by contributing to any of the Arizona tax credits.

Your money simply goes to a different recipient other than the State...you are still minus the money.

Credit eligible contributions made on or before the 15th day of the fourth month following the close of the taxable year may be applied to either the current or the preceding taxable year and are considered to have been made on the last day of that taxable year.

Private & Public School Tuition Credits

Two separate non-refundable Tax Credits...which can be combined... are available to individuals for contributions made to a Certified School Tuition Organization which provides scholarships for students enrolled in Arizona private schools.

• Combined Maximum Credit for Private School Plus "Switcher" Tuition Credit
  • For tax year 2019 the maximum combined Credit is $1,135 ($569 + $566) for singles or $2,269 ($1,138 + $1,131) for married joint
  • For tax year 2020 the maximum combined Credit is $1,183 ($593 + $590) for singles or $2,365 ($1,186 + $1.179 for married joint.

• Private School Tuition Organizations Tax Credit
  • For tax year 2019, the maximum credit is $569 for single, heads of household & married filing separate & $1,138 for married filing joint.
  • For tax year 2020, the maximum credit is $593 for single, heads of household & married filing separate & $1,186 for married filing joint.

• "Switcher" School Tuition Organizations Tax Credit
  • For tax year 2019, the maximum credit is $566 for single, heads of household & married filing separate & $1,131 for married filing joint.
  • For tax year 2020, the maximum credit is $590 for single, heads of household & married filing separate & $1,179 for married filing joint.
  • Available to taxpayers who donate the maximum amount allowed under the Credit for Contributions to Private School Tuition Organizations Tax Credit (above) & make an additional donation to a Certified School Tuition Organization.

Charitable Organization Credit

Arizona has two separate non-refundable Tax Credits for taxpayers who contribute to charitable organizations:

• Qualified Charitable Organizations (QCOs)
  • Maximum Credit is $400 for Singles & Head of Household...$800 for Married Couples.

• Qualified Foster Care Organizations (QFCOs)
  • Maximum Credit is $500 for Singles & Head of Household...$1,000 for Married Couples.
  • The QFCO tax credit is available for contributions to Qualifying Charitable Organizations that provide assistance to residents of Arizona who either receive Temporary Assistance of Needy Families (TANF) benefits, are low income residents of Arizona, or are chronically ill or physically disabled children including those in Foster Care.

• List of QFOs & QFCOs for every year.

• The Arizona Charitable Organization Tax Credit permits any credits for contributions to QCOs and QFCOs that are not applied against obligations for the most recent taxable year to be carried forward for a period of five consecutive years.

Public Schools Extracurricular Activities Credit

You can claim a non-refundable tax credit for making contributions or paying fees directly to a public school for support of "extracurricular activities."

The maximum credit allowed is $400 for married filing joint filers and $200 for single, heads of household and married filing separate filers.

The Arizona Department of Revenue now requires taxpayers report the school’s County Code, Type Code, and District Code & Site Number (CTDS) number on Form 322, which is included with the Arizona income tax return.

The term "extracurricular activites" is misleading as you can make contributions or pay fees to a public school located in Arizona for the following public school extracurricular purposes:

• Standardized testing for college credit or readiness offered by a widely recognized and accepted educational testing organization,
• Career and technical education industry certification assessment,
• Preparation courses and materials for standardized testing,
• Cardiopulmonary resuscitation training,
• Extracurricular activities,
• Character education programs.

All of the above are considered to be extracurricular activities & qualify for the Arizona tax credit.

"Standardized testing for college credit or readiness" includes the SAT, PSAT, ACT, advanced placement and international baccalaureate diploma tests and other similar tests.

"Widely recognized and accepted educational testing organization" means the college board, the ACT, the international baccalaureate and other organizations that are widely recognized and accepted by colleges and universities in the United States and that offer college credit and readiness examinations.

"Career and technical education industry certification assessment" means an assessment for career and technical preparation programs for pupils.

NOTE: Your contribution for the support of standardized testing fees, career and technical education industry certification assessments, preparation courses, or materials for standardized testing, must be made directly to the public school located in Arizona.

Contributions made to any other organization will not qualify for this credit. 

Military Family Relief Fund Credit

The Fund provides financial assistance to the families of currently deployed service members...pre & post 9/11 Military and Veteran Families for hardships caused by the service member’s deployment.

Assistance from the Arizona Military Family Relief Fund (MFRF) is determined by an Advisory Committee. The Committee is comprised of twelve members appointed by the Governor, as well as the Director of the Arizona Department of Veterans’ Services. 

The MFRF is capped at $1 Million annually.

If the cap is reached then no more contributions are allowed for that tax year...so make your contribution early in the tax year.

Non-Refundable credits are $200 for Singles & $400 for Married Joint.

Here's the 2020 Arizona Military Family Relief Contribution Form.