Now that children (and grandchildren) are heading back to school in Arizona, it's that time of year when you’ll to be asked to contribute to local public or private schools -- whether it’s for donated school supplies, field trip fees, fund raisers or cash contributions.
Five Tax Credits Available
For Arizona residents, the Department of Revenue offers five tax credits for your contributions to public schools or private tuition organizations. These credits reduce tax liability dollar for dollar, are non-refundable credits, and if the credit exceeds the tax owed, it can be carried forward up to five years.
• Credits for contributions made or fees paid to public schools earn a maximum credit of $200 (S, HH, or MFS) or $400 for MFJ returns.
• Credits for private school tuition organizations (PSTO) contributions are $545 or $1090 (MFJ).
• Credit for contributions to a certified school tuition organization are $542 or $1,083 (MFJ). Only the amount that exceeds your contribution to PSTO can be claimed.
• Credit for business contributions by an S corporation to school tuition organizations (STO) receive varying credit; and finally
• Credit for S corporation donations to STO for displaced students or students with disabilities.
These credits have rules so I recommend you consult a tax professional about them. For example, only donations by cash, check or credit card qualify. Giving items such as text books or used sporting equipment would not qualify for the credit.
For help with this or any tax issue, contact H and R Block Green Valley at 520-625-8732.