Nov 28, 2023 | Guides, Tax Planning

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2023 Arizona Individual Tax Credits

Versant Capital Management’s individual tax credit guide can help you navigate 2023 Arizona tax credits for charitable donations. It’s a great way to dictate where your tax money goes even if you are not eligible for a federal benefit. For most credits, you can donate until April 15, 2024, and apply it to your 2023 tax return.

Qualifying Charitable Organizations (QCO) Credit

Credit for cash contributions made to certain nonprofits

  • Maximum credit for the 2023 tax return:
    • $421 for single, heads of household, and married filing separate filers
    • $841 for married taxpayers filing a joint return
  • Credit can offset Arizona tax liability dollar for dollar but is not refundable
  • Unused credit can be carried forward five years
  • Qualifying charitable organizations for 2023:
    https://azdor.gov/sites/default/files/2023-05/CREDITS_2023_qco.pdf
  • Contributions can be made from January 1 to April 15 of the following calendar year

 

Qualifying Foster Care Charitable Organizations (QFCO) Credit

Credit for cash contributions made to certain foster care nonprofits

  • Maximum credit for the 2023 tax return:
    • $526 for single, heads of household, and married filing separate filers
    • $1,173 for married taxpayers filing a joint return
  • Credit can offset Arizona tax liability dollar for dollar but is not refundable
  • Unused credit can be carried forward five years
  • Qualifying foster care charitable organizations for 2023: https://azdor.gov/sites/default/files/2023-03/CREDITS_2023_qfco.pdf
  • Contributions can be made from January 1 to April 15 of the following calendar year

 

Public Schools Credit

Credit for cash donations made or fees contributed to public schools for extracurricular activities or character education programs

  • Maximum credit for the 2023 tax return:
    • $200 for single, heads of household, and married filing separate filers
    • $400 for married taxpayers filing a joint return
  • Credit can offset Arizona tax liability dollar for dollar but is not refundable
  • Unused credit can be carried forward five years
  • Qualifying public and charter schools for 2023: https://azdor.gov/sites/default/files/2023-03/PUBLICATION_ADESchoolListing.pdf
  • Contributions can be made from January 1 to April 15 of the following calendar year

 

Certified (Private) School Tuition Organizations (STO) Credit

There are two credits available for contributions made to Certified School Tuition Organizations:

1) Original Individual Tax Credit

Credit for cash donations made to a Certified School Tuition program for scholarships to qualified private schools

  • Maximum credit for the 2023 tax return:
    • $655 for single, heads of household, and married filing separate filers
    • $1,308 for married taxpayers filing a joint return
  • Credit can offset Arizona tax liability dollar for dollar but is not refundable
  • Unused credit can be carried forward five years
  • School Tuition Organizations certified to receive donations for 2023:
    https://azdor.gov/sites/default/files/2023-06/REPORTS_sto-i-list.pdf
  • Contributions can be made from January 1 to April 15 of the following calendar year

 

2) Switcher Individual Tax Credit
Credit for cash donations made to a Certified School Tuition Organization for scholarships to qualified private schools

  • Maximum credit for the 2023 tax return:
    • $652 for single, heads of household, and married filing separate filers
    • $1,301 for married taxpayers filing a joint return
  • Credit can offset Arizona tax liability dollar for dollar but is not refundable
  • Unused credit can be carried forward five years
  • Credit can only be taken if the individual taxpayers donate the maximum amount to the first credit
  • School Tuition Organizations certified to receive donations for 2023:
    https://azdor.gov/sites/default/files/2023-06/REPORTS_sto-i-list.pdf
  • Contributions can be made from January 1 to April 15 of the following calendar year

 

Military Family Relief Fund (Credit)

Credit for cash donations to provide financial assistance to the families of currently deployed Service Members and post-9/11 Military and Veteran families for hardships caused by the service member’s deployment to a combat zone. This fund tends to cap out quickly, so check before you contribute.

  • Maximum credit for the 2023 tax return:
    • $200 for single, heads of household, and married filing separate filers
    • $400 for married taxpayers filing a joint return
  • Credit can offset Arizona tax liability dollar for dollar but is not refundable
  • Unused credit cannot be carried forward
  • Contributions can be made from January 1 to December 31 of each calendar year if the cap has not been met
  • Credit capped at $1,000,000 annually
  • Available on a first-come, first-serve basis per date of donation

If you contribute for a prior tax year, ensure you work off the current calendar year’s organization list. If you contribute in January of 2024 for your 2023 Arizona tax return, be sure the charitable organization you are donating to is on the 2024 eligible organization list.

The 2024 list of eligible organizations is available on the Arizona Department of Revenue website. The list of eligible organizations will be updated periodically throughout the year as eligible organizations receive their authorization to receive donations under the QCO and QFCO programs. An organization can be certified one year and not the next, so verify that the organization is certified to receive tax credit donations when you donate.

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