Information for Donors
The nation’s longest running scholarship tax credit program, Arizona’s Individual or Original Scholarship Tax Credit and the “PLUS” or Switcher Tax Credit, provide all Arizona taxpayers the opportunity to contribute directly to a School Tuition Organization (STO) and receive a dollar-for-dollar tax credit against their Arizona state tax liability.
This is a TAX CREDIT, not a deduction.
The STO uses these tax credit funds to provide scholarships to both children attending and children wishing to attend private schools. By law, STOs must allocate 90% of contributions to scholarships.
For Tax Year 2020, a married couple filing jointly can claim a maximum credit of up to $2,365. An individual tax filer can claim up to $1,183.
To qualify for tax year 2020, contributions must be sent directly to the STO and postmarked by April 15, 2021.
Additionally, certain Arizona businesses can participate!
- S-Corps & LLCs that file as an S-Corp
- Insurance Companies that pay premium taxes in Arizona
Who can participate?
Any taxpayer with an Arizona state tax liability can contribute to a School Tuition Organization (STO) and receive a dollar-for-dollar tax credit when they file their Arizona taxes.
With your contribution, you not only change lives, but you save the state of Arizona money. The average tax credit scholarship is only a small portion of what Arizona would actually pay to educate the child if enrolled in a district school.
Can I recommend a specific school or student with my donation?
STO policies vary, and some allow student and/or school recommendations. Arizona state law says that an STO cannot award, restrict or reserve scholarships solely on the basis of a donor’s recommendation. Additionally, a taxpayer cannot claim a tax credit if the taxpayer agrees to “swap” donations with another taxpayer to benefit either taxpayer’s own dependent. Any designation of your own dependent is prohibited.
Are there other Arizona tax credit opportunities?
The state of Arizona offers several other tax credit opportunities. These include the public school extracurricular tax credit and the credit for charitable organizations (also called the working poor tax credit). A taxpayer may contribute to as many of the various tax credit programs as long as they have the state tax liability to do so. Please visit the Arizona Department of Revenue at www.azdor.gov for more information.
How do I report the contribution on my tax return?
Individual or Original contributions are filed using Arizona Form 323. Contributions to the PLUS or “Switcher” tax credit are filed using Arizona Form 348. Filers will also need to complete Form 301. Forms are available from the Arizona Department of Revenue at www.azdor.gov
More information can be found on the Arizona Department of Revenue’s website at https://azdor.gov/tax-credits/credits-contributions-certified-school-tuition-organizations.