What Exactly Is a Qualifying Charitable Organization in Arizona?

If you are just hearing about the Arizona Charitable Tax Credit for the first time, you may not yet feel confident about moving forward with directing your tax credits. There is a lot of terminology to be aware of, so it’s understandable to want to seek out more information. One thing that many people may not fully understand is who you can actually direct your tax credits to. In this article, we will summarize the tax credit and provide some clarity about who benefits from it.

What Is the Arizona Charitable Tax Credit?

The Arizona Charitable Tax Credit allows taxpayers to make charitable contributions and receive dollar-for-dollar reductions in their Arizona state tax liabilities. According to Phoenix Children’s Foundation, the tax credit for gifts to Qualifying Charitable Organizations (QCOs) began in 1998 Back then it was referred to as the “Working Poor Tax Credit.”

As opposed to directing funds straight from your pocket, giving items like food boxes, or using your time for volunteer opportunities, the tax credit allows people to direct their tax credit to a working poor charity in Arizona. The specific charity that you donate to will depend on whether or not they are certified as either a Qualifying Charitable Organization or a Qualifying Foster Care Charitable Organization (QFCO). You can inquire with your CPA about this at any time of the year, but be sure to bring it up around tax time!

What Makes a QCO a QCO?

According to the Arizona Department of Revenue (ADOR), a QCO is a tax deductible charity that offers immediate assistance in the form of basic needs to Arizona residents who are given TANF benefits — temporary assistance for needy families. These residents must be low-income and live in Arizona, or they may have a child suffering from either a chronic illness or living with a physical disability. These organizations must utilize at least 50% of their yearly budget towards services for qualifying residents of Arizona.

As a tax deductible charity that provides local residents with necessities such as food, clothing, and more, Paz de Cristo is proud to qualify as a QCO under Arizona law. When you direct your tax credits to us, we make the most of them by hosting daily dinners, helping with resumes, providing bus passes to help with transportation to and from interviews, and more.

To learn how you can use your tax credits to help our Qualifying Charitable Organization, reach out to us today or speak to your CPA!