Credit for Donations

The Arizona Tax Credit to Qualifying Charitable Organizations allows Arizona taxpayers to receive a dollar-for-dollar tax credit of up to $800 joint/married and $400 individual on state taxes when they donate to Mikey’s League through Special Olympics Arizona. Additionally:

– You do not have to itemize
– You can donate to this AND to the public school, private school, foster agencies, and other tax credits
– You can use the same donation as a deduction on your federal return
– When you fill out your Arizona tax return, complete the very simple Form 321 and deduct the amount of your gift, up to $400 per individual or $800 per couple filing jointly, from what you owe in state taxes for the year. Remember to include your charitable donation on your federal tax return and you can end up getting back more than you donated.

Tax circumstances vary greatly. Please consult your tax advisor for specific questions related to your tax situation.

How Tax Credits Work

Assume you are a married tax filer and normally pay about $3,000 in total Arizona state taxes. This year you decide to contribute to organizations eligible for the tax credit.

Let’s assume you write checks to four organizations that qualify for four different tax credits (the QCO Credit for $800, the QFCO for $1000, and the Public School Tax Credit for $400 and the Private School Credit for $1,092) for a total of $2,200.

You get a dollar-for-dollar credit against state taxes owed for $2,200. By donating to tax credit eligible organizations, now your total state tax liability equals $3,000 less the credit of $2,200, for $800 of remaining tax liability. Your total dollars paid remains $3,000 whether you use tax credits or not – it’s either $3,000 all paid to the state, or $2,200 paid to tax credit eligible organizations and $800 paid to the state. If you had already paid in the full $3,000 in state taxes during the year, you would get a refund for the $2,200.

Frequently Asked Questions about Arizona Tax Credit for Qualified Charitable Organizations

Q: Where can I get more information about the tax credit?

A: You can get more information by visiting the Arizona Department of Revenue website or by calling Taxpayer Assistance at (602) 255-3381 or (800) 352-4090. Please consult your tax advisor for specific questions as tax circumstances vary.

Make your Arizona tax credit contribution this year. Contributions must be received before April 15 to get the Tax Credit on your state return!

Donating to Special Olympics Arizona can qualify you for tax credits, known as the Arizona Tax Credit to Qualifying Charitable Organizations (QCO)

Q: How do I qualify for Arizona Charitable Tax Credit for Qualifying Organizations?

A: If you make a cash donation (cash, check, credit card payment) to Special Olympics Arizona and you file an Arizona state tax return, you may qualify for the tax credit. Donations of clothing, food or other tangible items do not qualify.

Q: How does my money get to Mikey’s League?

A: When you make your donation, please mark Mikey’s League as the delegation or if you are writing a check please write “For Mikey’s League” in the comment section. The money will then go into an account for our use.

Q: What is your Qualified Charitable Organization (QCO) Code?

A: Special Olympics Arizona, Incorporated’s QCO Code is: 20882 – Remember to keep your donation receipt (provided by Special Olympics Arizona Incorporated), fill out AZ Form 321 and include it with your state tax filing.

Q: Can I take this credit and other credits such as credit for donations to schools and foster care agencies?

A: Yes, they are separate credits and you can take advantage of all of them.

Q: What is the difference between a tax credit and a tax deduction?

A: A tax credit is significantly more beneficial than a tax deduction. A tax credit reduces your taxes, dollar-for-dollar. A tax deduction reduces the taxable income upon which your tax liability is calculated.

Q: Do I have to donate $400 or $800 at once?

A: No, you do not have to donate the whole amount at once. Donations given throughout the year that add up to the $400 and $800 limits qualify for the tax credit.