QUALIFYING CHARITABLE ORGANIZATIONS

This individual income tax credit is available for contributions to Qualifying Charitable Organizations that provide assistance to residents of Arizona who either receive Temporary Assistance of Needy Families (TANF) benefits, are low-income residents of Arizona or are chronically ill or physically disabled children residing in Arizona.

Starting with the 2013 tax year, taxpayers no longer have to itemize deductions to claim a credit for contributions to a Qualifying Charitable Organization or Qualifying Foster Care Charitable Organization.

Maximum Credit for Any Tax Year

Single or head of household: $400 (Qualifying Charitable Organization) + $500 (Qualifying Foster Care Organization) = $900

Married filing jointly: $800 (Qualifying Charitable Organization) + $1,000 (Qualifying Foster Care Organization) = $1,800

*Beginning in 2016, the qualifying charitable organization and qualifying foster care organization donations are no longer linked, so you can take both credits for a new maximum of $900 ($1,800 for married filing jointly).

Donation Deadline

2015 & prior: December 31
Beginning in 2016: April 15 (for previous tax year)

Form to File

Credit/Deduction Distinctions

Any charitable contribution that is included in itemized deductions on your federal return must be removed from your Arizona itemized deductions if the contributions were claimed as an Arizona credit. Donations made to organizations not listed on the department’s published website are typically allowable as deductions. You cannot claim both a deduction and a credit for the same charitable contribution on your Arizona return.

Criteria for a Qualifying Charitable Organization

  • Must be exempt from federal income taxation under Section 501(c) (3) of the Internal Revenue Code or a designated community action agency that receives community services block grant program monies pursuant to 42 United States Code Section 9901.
  • Must spend at least 50% of its budget on services to Arizona residents who receive Temporary Assistance for Needy Families benefits, to Arizona resident low-income households or to chronically ill or physically disabled children who are residents of Arizona.

*If the charity meets both criteria listed above as well as the following two criteria, it is also a Qualifying Foster Care Charitable Organization.

  • Must provide services to at least two hundred foster children in Arizona.
  • Must spend at least 50% of its budget on services to foster children in Arizona

NOTE TO DONOR: Many charities indicate on their websites if they are qualified for this credit. Annual reports are often available online as well so that you can see how the organization spends its money. If a charity’s website does not provide this information, you can call and ask for copy of its certification letter from the ADOR.

Resources

Hoping to become a Qualifying Charitable Organization or Qualifying Foster Care Organization? Here are the forms you’ll need: QCO Forms, QFCO Forms. You can reference the state’s FAQ for charitable organizations for more information.