Notice: A school tuition organization cannot award, restrict or reserve scholarships solely on the basis of a donor recommendation. A taxpayer may not claim a tax credit if the taxpayer agrees to swap donations with another taxpayer to benefit either taxpayer's own dependent.

Benefits

Private School Tuition Tax Credit

A tax credit is a dollar-for-dollar reduction of the income tax you owe. For example, if you owe $1,000 in federal taxes but are eligible for a $1,000 tax credit, your net liability drops to zero.

Individual Limits
Collectively, the limit for individuals for tax year 2023 is $2,609 (married filing jointly) or $1,307 (filing single or separately). 

Collectively, the limit for individuals for tax year 2024 is $2,910 (married filing jointly) or $1,459 (filing single or separately). 

The way it works for tax purposes is as follows: individual donations are applied to the "Original Individual Tax Credit" until the donor reaches their "tax credit limit" for the tax year. At that time, the excess dollars are applied to the new "Switcher Individual Tax Credit" until that credit is also maxed for the tax year. Any donations in excess of the total limit, $2,609 (married filing jointly) or $1,307 (filing single or separately), are treated as donations which can be taken as itemized deductions on both your federal and state income tax returns. 

  1. Original Individual Tax Credit (Claimed on Arizona Form 323) 
    • Donors that file married filing jointly, for income tax purposes, can take a tax credit up to $1,308 (2023) or $1,459 (2024).
    • Donors that that do not file married filing jointly, for income tax purposes, can take a tax credit up to $655 (2023) or $731 (2024).
  2. Switcher Individual Tax Credit (Claimed on Arizona Form 348)
    • Donors that file married filing jointly, for income tax purposes, can take a tax credit up to $1,302 (2023) or $1,451 (2024).
    • Donors that that do not file married filing jointly, for income tax purposes, can take a tax credit up to $652 (2023) or $728 (2024).
  • You will receive a dollar-for-dollar tax credit on your Arizona income tax return up to the amount of your income tax, or the amount of your donation, whichever is less.
  • The law allows a carry-over of any unused donations for up to five years.

Public School Tax Credit
Maximum Annual Public School Tax Credit:

  1. Married taxpayers $400
  2. Single taxpayers $200

The Public School Tax Credit may be taken in addition to the Private School Tuition Tax Credit. 

You may also be able to claim a deduction on your federal tax return for your donation. Taxpayers should consult with their tax professional for specific tax advice.

Notice: A school tuition organization cannot award, restrict or reserve scholarships solely on the basis of a donor recommendation. A taxpayer may not claim a tax credit if the taxpayer agrees to swap donations with another taxpayer to benefit either taxpayer's own dependent.

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