Breaking news on making donations for Arizona $1 for $1 tax credits!
On August 23rd, the IRS released new rules limiting charitable donations and state tax credits. Previously, when you made a donation that qualified for an Arizona $1 for $1 tax credit you received a state tax credit and a Federal charitable deduction. Since the 2018 itemized deduction for taxes is limited to $10,000, this was especially valuable. Beginning Monday, August 27th, this could change!
A public hearing for the proposed rule change is scheduled for November 5, 2018. Because this is still in process, the amendment is not yet final, and we do not know if the proposed date of applicability – August 28, 2018 – will take effect, you might consider making your donations now. Donations made after Monday August 27th still qualify for the Arizona tax credit but will receive NO Federal charitable deduction.
Note: The Federal Register (FR Doc. 2018-18377) announcing the November hearing and setting the 8/28/2018 applicability date was filed 8/23/2018 at 4:15pm and is due to be published 8/27/2018.
As a reminder, below are the Arizona tax credits qualify for a $1 for $1 reduction in Arizona tax.
- Credit for Contributions to FSL = a Qualifying Charitable Organization (QCO) ($400 Single / $800 Joint)
- Credit for Contributions to a Qualified Foster Care Organization (QFCO) ($500 Single/$1,000 Joint)
- You can claim either charitable credit or both in the same taxable year
- More information can be found at Contributions to QCOs and QFCOs
- Credit for Contributions Made or Fees Paid to Public Schools ($200 Single/$400 Joint)
- More information can be found at the ADOR website Public School Tax Credit
- Credit for Contributions to Private School Tuition Organizations ($555 Single/$1,110 Joint)
- “Switcher” Credit to Certified School Tuition Organizations ($552 Single/$1,103 Joint) The “Switcher” credit is only available if you have first done the Private School Tuition Organization credit. The combined credits are $1,107 Single / $2,213 Joint.
- For additional information & a list of the certified School Tuition Organizations – STO
- Credit for Donations to the Military Family Relief Fund ($200 Single/$400 Joint)
The Arizona Military Family Relief fund is administered by the Arizona Department of Veterans’ Services so support goes directly to Arizona families in need. Don’t forget that Arizona only approves the first $1 million in donations as credits so mail your donation early.
- The form and more information can be found at the MFRF website.
Information provided by our friends and partners at Henry & Horne, LLP.