I came across some excellent questions and answers on the AZ. School Tax Credit and thought I would list them below.
Remember, this is an excellent dollar for dollar credit against any Arizona Tax Liablity you have. If the credit exceeds your tax liability, it will carry forward for 5 years.
What school tax credits are available to individuals?
An individual may claim a credit for making
contributions or paying fees to a public school for
support of extra curricular activities or character
education programs. An individual may also claim a
credit for making a donation to a qualified school tuition
organization for scholarships to private schools.
Who may claim the individual school tax credits?
The individual school tax credits are available only to
individuals. Partnerships and S corporations cannot pass
these credits through to their partners or shareholders.
These credits are also not available to trusts, estates,
regular corporations, or S corporations.
Can a taxpayer claim both credits in the same
taxable year?
Yes.
Must a taxpayer have a child in school in order to
claim one or both of these credits?
No.
Is a charter school considered to be a public school
or a private school?
A charter school is defined in ARS §15-101 as a public
school. Therefore, a charter school is eligible for the credit
for contributions made or fees paid to a public school to
support extracurricular activities or character education.
What do I have to do to qualify for this credit?
To qualify for the credit you must make cash contributions
or pay fees to a public school for support of extra
curricular activities or for character education programs.
Will I qualify for the credit if I pay fees for my own
child to participate in an extra curricular activity or
character education program?
Yes, fees that you pay for your own child to participate
in an extra curricular activity or character education
program qualify for the credit.
Do contributions I make to the school qualify for
the credit?
Yes, if the contributions are in support of extra
curricular activities or a character education program.
What is the maximum dollar amount of the credit?
The credit is equal to the amount contributed or the
amount of fees paid. However, for single taxpayers or
heads of household, the credit cannot exceed $200. For
married taxpayers that file a joint return, the credit
cannot exceed $400. If married taxpayers file separate
returns, each spouse may claim 1/2 of the credit that
would have been allowed on a joint return.
What public schools and grades are eligible for
the credit?
Public schools and charter schools that provide
instruction in grades kindergarten through 12 are
eligible for the credit. Nongovernmental schools, preschools,
community colleges, and universities do not
qualify for the credit.
What is the maximum dollar amount of the credit for Private School Tuition?
The credit is equal to the amount contributed. However,
for single taxpayers or heads of household, the credit
cannot exceed $500. For married taxpayers that file a joint
return, the credit cannot exceed $1,000. If married
taxpayers file separate returns, each spouse may claim
only 1/2 of the credit that would have been allowed on the
joint return.
What is a school tuition organization?
A school tuition organization is one that is tax exempt
under Section 501(c)(3) of the Internal Revenue Code,
allocates at least 90 percent of its annual revenue to
scholarships or grants, and makes its scholarships/grants
available to students of more than one qualified school.
Remember, a Private school must be Qualified by the state, be sure to check if your donation will be accepted for the credit.
For a List of Qualified School Organizations in Az. click on link below.
www.azdor.gov/LinkClick.aspx?fileticket=HZtBZXHPWRA%3d&tabid=114
Tuesday, December 8, 2009
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