3 Myths About the Arizona Charitable Tax Credit, Busted

The Arizona Charitable Tax Credit has changed over recent years, so you may not be up to date with all of the existing rules. Or perhaps you’re just finding out about it and are looking to understand it a bit more clearly. Whatever the case may be, we’re here to get you up to speed on some ins and outs of the Arizona Charitable Tax Credit.

Myth #1: Donations Can Be Made By Corporations

In order to claim the Arizona Charitable Tax Credit, a donation has to be made by individuals. Organizations such as corporations, partnerships, foundations, and more do not qualify. Another thing to keep in mind is that the donations must be made in cash and that items donated such as clothing, toys, and services do not count.

This limitation shouldn’t discourage corporations from making donations of money, items, or time, however! There are plenty of ways for organizations to get involved with Paz de Cristo. Groups are welcome to help out with our evening meals. Paz de Cristo has offered dinner to the community every night since 1988, and we’d love it if your team could be a part of that!

Myth #2: The Maximum Allowable Credit Is $400

While this is true for single taxpayers, those who are married and filing separately, and heads of households, it is not true across the board. When it comes to joint taxpayers, the maximum allowable credit is actually $800! When you direct these funds to Paz de Cristo, we put them towards our goals of feeding, clothing, and empowering those in our local area. We do this by providing Grab n’ Go dinners and emergency food boxes, offering showers and clothing on a weekly basis, and providing requested documentation and mail to community members.

Myth #3: You Need to Contribute Before Dec 31 to Receive the Credit

Many people operate under the misunderstanding that Arizona taxpayers must make their charitable contributions prior to December 31 to be eligible for state tax credits for that year. Arizona permits taxpayers to claim tax credits for gifts through April of the current year for the tax year prior. The deadline for making a charitable contribution was moved to mid-May for taxpayers looking to file and claim for the 2020 tax year.

In the year 2020, most charitable dollars went to religion, with education, human services, grantmaking foundations, and public-society benefit following afterward. Whatever you’re donating to, be sure that you are making the most of your donation and claiming your Arizona tax credit federal deduction. We at Paz de Cristo would be happy to work with you, explaining the process more thoroughly and seeing how you could contribute to the hard work that we do.