AZ Tax Credit Donation: Funding Options

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Description

People are often surprised to discover that although Legacy Traditional School feels very much like a private school, it is in fact, a tuition-free public charter school. We often are asked, “How do charter schools do so much more with less?” The Arizona State funding of public charter school students is traditionally 20% less than what is given to public schools. Charter schools are finding success because the private sector is better at managing funds, motivating teachers and staff, and giving more of what children need in a quality education. A culture of excellence, caring, generosity, and going above the norm is evident at Legacy Traditional Schools.

How can families and the community support the school and encourage teachers and students to continue on their path toward excellence? By directing funding to the areas that are most important to them. If only 100 families contribute the $400 allowed by the State of Arizona, $40,000 towards our schools, above and beyond what the government provides. What could an extra $40,000 do for the Fine Arts Program, or the Music Program or the Athletic Program? What if 1,000 friends and families joined this effort?

Frequently Asked Questions

  • When do I need to make my donation by? For the 2018 tax year, donations can be made up until April 15, 2019, and applied to your 2018 tax bill.
  • What is the difference between a tax deduction and a tax credit? A tax deduction lowers the amount of your taxable income while a tax credit lowers the amount of taxes you owe.
  • How does a tax credit work? In 2018, if you had a $1,000 Arizona tax bill, by donating $400 to your child’s school, your tax bill would be lowered to just $600.
  • Can only parents take advantage of Arizona’s Education Tax Credit? No – any Arizona resident may donate to a school and take advantage of the tax credit. Grandparents, aunts, uncles, even neighbors can donate and receive a tax credit, as long as they have an Arizona Income Tax liability.
  • How large is the tax credit? Couples filing jointly can receive a $400 tax credit for a $400 donation. Single and Head of Household filers can receive a $200 tax credit for a $200 donation.
  • Does an entire donation have to be given to just one school? No. Your donation can be applied to multiple schools. For example, if you have two children, one whom attends a Legacy school and the other attends a local high school, a $200 donation could be made to each school for a total of $400.
  • How do I know if I will have a 2018 Arizona tax liability?
    • Single individuals have a $200 Arizona tax liability if they have earned roughly $15,000.
    • Head of Household filers (single with dependents) have a $200 Arizona tax liability if they have earned roughly $22,100 and have one dependent.
    • Married couples filing jointly have a $400 Arizona tax liability if they have earned roughly $30,000 and have no dependents.
    • Married couples filing jointly have a $400 Arizona tax liability if they have earned roughly $34,250 and have one dependent.
  • Where can I find more information on Arizona’s Education Tax Credit? Details on Arizona’s School Tax Credits are available here in Pub 707 created by the Arizona Department of Revenue.

Notes

If you are paying AZ state income tax you have the opportunity to decide how your tax dollars are spent/ used. By making an ECA Tax Credit donation to a qualifying school like LTS you can support the program of your choice. Individuals can claim up to $200 and those filing a joint return can claim up to $400. Payments can be made in a lump sum or in installments. Contact us if you want to set up a recurring donation (like $33 per month for 12 months). Please consult your tax advisor to determine how to take advantage of your donation.

 

Tax Credits are non-refundable.