Not every donation to a non-profit organization qualifies for a tax credit. The charities need to meet certain requirements set out by The State of Arizona and the federal government for your donation to count as a tax-deductible charity. The Arizona Department of Revenue publishes a list of all Qualifying Charitable Organizations and Qualifying Foster Charitable Organizations each year that you can contribute to.
The ADOR periodically recertifies the charities to ensure that they continue to meet the required legal requirements. Effective 2018, the Arizona Department of Revenue assigned five-digit code numbers to identify QCOs and QFCOs for tax credit purposes. Taxpayers have to use the “QFCO code” or “QCO code” in their Form 352 and 321, respectively, to claim their tax credit.
For an organization to qualify as a tax deductible charity, it must complete the QCO form and submit it to the ADOR alongside supporting documents. The non-profit needs to provide immediate basic needs to Arizonians. These include those that receive temporary assistance for needy family (TANF) benefits, low-income residents, or children with chronic illness or disability. The tax deductible charity also must spend at least 50% of its annual budget on “qualified services to qualified Arizonian residents.”
According to the Arizona Department of Revenue, qualifying services include cash assistance, shelter, food boxes, job placements, medical care, job training opportunities, or any other assistance that meets basic needs provided and used in the State. Low-income residents have a household income that is less than 150% of the federal poverty level. The State also indicates that chronically ill or physically disable individuals have a severe physical condition that requires ongoing medication or surgical intervention.
You can claim the tax credits on Form 321 for a maximum of $400 for single filers and $800 for married joint filers.
A QFCO that qualifies as a tax deductible charity needs to meet the requirements of a QCOs. Additionally, the organization needs to spend at least 50% of its budget on ongoing services for at least 200 children placed in foster homes or on child welfare agencies. The State indicates that qualified individuals are foster children or people under 21 participating in a transitional independent living program.
You can claim your tax credit to QFCO on Form 352 for a maximum of $500 for single filers and $1000 for married joint filers.
Donations to a tax deductible charity can earn you tax credits on your State taxes and federal deductions. Paz de Cristo is a certified QCO in which 93 cents of every dollar donated goes to feed, clothe and empower. Your donation can make a difference in our community.