Month: December 2021

While thoughts of taxes often bring feelings of stress, that doesn’t have to be the case. If you live in the state of Arizona, there is a way that you can use your funds to benefit both yourself and your community. By taking advantage of the Arizona Charitable Tax Credit, you can receive dollar-for-dollar reductions in your Arizona state tax liabilities while helping working poor charities such as Paz de Cristo. According to the National Philanthropic Trust, there are more than 1.5 million charitable organizations in the U.S. Keep reading to learn more!

What Is the Tax Credit?

The Arizona Charitable Tax Credit is comprised of two individual income tax credits for charitable contributions, which are nonrefundable. To receive the credit, you direct funds to Qualifying Charitable Organizations (QCOs) such as Paz de Cristo and/or Qualifying Foster Care Charitable Organizations (QFCOs). If you are married filing jointly, the maximum allowable credit for contributions to QCOs is $800 and to QFCOs is $1,000. If you are single, a head of household, or married filing separately, you can donate up to $400 to a QCO or $500 to a QFCO. When you donate, you are provided with a dollar-for-dollar tax benefit. This allows you to reduce your state tax liability for each dollar that you donate. Not many people know that the tax credit for gifts towards QCOs dates back to 1998. Back then, it was referred to as the ‘Working Poor Tax Credit.’

What Happens With My Funds?

Qualifying Charitable Organizations are described as organizations that ‘provide immediate basic needs to residents of Arizona who receive temporary assistance for needy families (TANF) benefits, are low-income residents of Arizona, or are children who have a chronic illness or physical disability.’ Paz de Cristo, for instance, utilizes the funds that we receive to provide baths, food boxes, and help to those who need additional job or life skills.

How Do I Take Advantage of the Tax Credit?

The process is simple! First, you choose a certified QCO or QFCO to direct your funds to. Once you make your donation, you hold onto the receipt of your gift that you receive from the charity. You must provide a copy of this receipt with your tax return. Next, you will complete the required tax form in order to claim one or multiple credits for your gift or gifts. For QCOs, you will fill out Arizona Form 321. For QFCOs, you will fill out Arizona Form 352. Find out what your individual tax return is. Then, subtract your tax credits from your tax liability to decrease your Arizona state tax balance. Include the completed form with this return.

To learn more about the Arizona Tax Credit federal deduction, or to find out information about volunteer opportunities, reach out to Paz de Cristo. We are always ready to help you on your journey towards bettering your community!

Do you want to do good for those in your community, but you don’t have the time to invest in volunteer opportunities? You aren’t alone, and you should know that there is still an option for you to make a difference. One option comes in the form of the Arizona Charitable Tax Credit. Keep reading in order to learn more about what the Arizona Charitable Tax Credit is, who it helps, and the restrictions surrounding it.

The Basics of the Tax Credit

To make the most of the Arizona Charitable Tax Credit, one has to donate money to a qualifying organization. You direct funds towards an organization that helps those suffering financially and who need extra assistance day-to-day, such as Paz de Cristo. Once you make a donation, you keep track of your gift receipt which you receive from the organization that you donated to. You then fill out necessary forms during tax time and file them along, with your receipt, with your tax return. You then receive a dollar-for-dollar return for the money that you gifted.

Organizations You Can Donate To

You can give money to two separate types of organizations. The first is Qualifying Charitable Organizations (QCOs). These organizations offer essential needs to those living in Arizona who receive temporary assistance for needy families, otherwise referred to as TANF benefits. They also help low-income Arizona residents, as well as children living with chronic illnesses and disabilities. They must utilize at least 50% of their annual budgets on ‘qualified services for qualified Arizona residents.’ Paz de Cristo proudly qualifies as a QCO. We use our budget to provide food boxes to our community. Additionally, we provide dinners to those who need them every night of the week.

The second type of organization you can direct funds to is a Qualifying Foster Care Charitable Organization (QFCOs). These need to meet all the requirements that Qualifying Charitable Organizations do, but with a separate stipulation. They must use at least half of their budget on services for kids in either child welfare agencies or foster homes.

The Limitations to the Tax Credit

As referenced by Give Local Keep Local, single taxpayers, those who are married and filing separately, and heads of households can donate up to $400 to QCOs and $500 to QFCOs. Joint taxpayers can donate up to $800 to QCOs and $1,000 to QFCOs. Only money can be gifted to receive the tax credit. Donations such as clothes, toys, and time do not count — though they are encouraged. Contributions do not need to be made by December 31st of the year that you donate! You can claim tax credits for gifts through April of the current year for the tax year prior.

To learn more about the tax credit, or to find other ways to do good in your local Arizona community, contact Paz de Cristo! We can help you gain a more thorough understanding of how the credit works and how we use your donations along with helping you find community service opportunities!