Q&AZ: What Is The Impact Of Charitable Tax Credits In Arizona?

By Claire Caulfield
Published: Wednesday, August 22, 2018 - 11:59am
Updated: Wednesday, June 10, 2020 - 11:38am
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When you donate to certain charities, you can claim a tax credit on your Arizona tax return.

KJZZ listener Willie Leonard was wondering about the impact of those donations, and asked via Q&AZ.

Using tax credits to incentivize charitable giving in Arizona dates back to 1998. It used to be called the “working poor tax credit” but in 2012 the requirements changed. The Arizona Department of Revenue now keeps a list of over 800 “qualifying charitable organizations.”

“It was expanded to include charitable organizations that provide immediate basic needs to Arizona residents who receive temporary assistance under benefits for needy families, our low-income Arizonans or our children who have a chronic illness or physical disability,” said spokesman Ed Greenberg.

Arizona tax payers said they gave $58,459,196 to those organizations in tax year 2016.

There’s also a tax credit if you donate to one of 44 approved foster care organizations, which netted $16,334,609.

The number of participants has been steadily increasing over the past five years, with a jump for tax year 2016.

“The limits were increased which is one factor that would have contributed to the increase in the total credit amount,” said Greenberg.

The limits on “qualifying charitable organizations” went from $400 to $800 for married filing joint filers and from $200 to $400 for single, heads of household and married filing separate filers. For donations to foster care organizations, the limit went from $800 to $1,000 for married filing joint filers and from $400 to $500 for single, heads of household and married filing separate filers.

Charitable donations are claimed on form 321 and foster care donations are claimed on form 352.

The Revenue Department said 148,703 filers claimed this tax credit in 2016, just about four percent of the 3.3 million individual income tax returns filed that year.

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