Arizona Tax Credit Information for Corporations
Arizona’s business community can assist children obtain a great education and promote school choice. In 2006, the Arizona Corporation School Tuition Tax Credit Law, A.R.S. Section 43-1183, was passed to allow corporations to receive a dollar-for-dollar tax credit against their state income tax liability. These funds help eligible children receive a quality private education.
Arizona Tax Credit Program Facts
- Corporate Tax Credits are allowed on a first come, first serve basis.
- Though there is no maximum amount a Corporation may donate, the corporate tax program has an assigned cap.
- Unused credits can be carried forward for up to 5 years.
- A Corporation cannot designate a specific student but it can designate a qualified private school. AESF is certified to received Corporate Tax Credit contributions. If there are qualified children at the designated school, every attempt will be made to scholarship these students. If there are no more qualified students at the designated school and if there are additional funds available, AESF will scholarship other qualified students at other participating AESF schools.
- C-Corps that pay Arizona corporate income tax are eligible to participate in this program. If an S-Corp files its income tax on a 120 Corporate Income Tax Return, then it can donate money to receive a credit. If the S-Corp passes its liability through to its individual shareholders or partners, it cannot donate money to receive a credit under this program. Typically “C” corporations are the ones eligible for receiving a tax credit.
- Corporations lead by example in providing the children of Arizona school choice opportunities.
- Your support will help grow the next generation of competent leaders. Our communities all win when our children win!
- Your company’s employees will appreciate having contributions targeted to their children’s private school
- Disadvantaged children will have an opportunity to move out of unsuccessful public schools and into a school that best meets their unique needs.
- Arizona families will be able to CHOOSE the school that will best meet the educational needs of their children.
- Scholarships give families hope and pride at having the opportunity to make the best possible education choice.
- A dollar-for-dollar tax credit can be realized for your company even at the time of the Arizona tax payment.
- A charitable donation to a nonprofit (STOs are 501 (c)(3) organizations) will result in publicity for your company and its generous contribution in support of education for Arizona children.
- A Corporate Contribution Request Form must be submitted to AESF.
- AESF must then notify the Arizona Department of Revenue via Express Mail for approval to receive the contribution for the purpose of the Corporation taking a tax credit.
- The Department of Revenue has 20 days to approve the contribution and then notify AESF of the approval/denial. The request shall be approved if there is credit available under the maximum allocation allowed for the fiscal year.
- AESF will notify the contact person designated on the original Corporate Contribution Request Form of either the approval or denial by the ADOR.
- Once approval has been received from the ADOR – the contribution must then be received by AESF and AESF must notify the ADOR within 20 days to send the contribution. ADOR needs to be informed of the exact date the donation is received for the statewide donation limit considerations. Failure of both receiving the contribution and notifying the ADOR within 20 days will result in the Corporation being removed from cap. The application would then need to be resubmitted for approval.
- The Corporation can take the full state tax credit. Please consult your accountant or tax professional for complete information and instructions about Tax Credits.