What Is a Tax Credit?
We created this short video to give you a visual about how ACSTO works. Don’t want to watch, or can’t listen right now? Read below for more!
If you're an Arizona taxpayer, you can make a donation to ACSTO and receive a dollar-for-dollar state tax credit in return! But what does that mean?
At the end of the year, if you typically get a refund, you’ll get a bigger refund. If you typically owe, you’ll owe less.
This is because a tax credit is different than a normal charitable deduction—rather than reduce your taxable income, it directly reduces your state tax liability (a.k.a. the tax you pay). For example, if your tax liability (obligation) is $1,000, and you make a $750 donation to ACSTO, your liability will be reduced by $750—meaning that your tax liability will only be $250! Keep in mind, if you usually receive a refund, a tax credit makes it bigger—it is to your advantage to participate in this program.
In addition, you can make a donation all the way up until April 15 (your donation must be made prior to filing your taxes—if you are filing an extension your donation needs to be made by April 15), and still claim the credit for the previous tax year!
The best part? ACSTO uses your tax credit donation to award tuition scholarships to Christian School students attending one of our Partner Schools! When you make a donation, you can identify a specific school, or even recommend a specific student to be considered for a scholarship!
Because of your support, thousands of families, who otherwise couldn’t, have been able to afford Christian Education—none of this is possible without you!
What are you waiting for? More than 85,000 Arizona taxpayers have already joined us to make Christian Education affordable for 38,000 students! Point the way for Arizona students today!
Now sure how much to give? Check out our video:
APRIL 15 DEADLINE
Donations can be mailed or submitted online to ACSTO prior to filing taxes, but no later than April 15 (whichever comes first), and still be eligible for the tax credit for the previous tax year. For any donations made between January 1 and April 15, it is up to the donor to determine which tax year they will claim the donation. Donations must be postmarked or submitted online by midnight of April 15—even if you plan on filing an extension. (The federal deadline for charitable deductions is still December 31.)
Arizona law allows donors to recommend a student when making their donation, however, a recommendation is not a guarantee of a scholarship award. This is because Arizona law and ADOR regulations state that, "A school tuition organization cannot award, restrict, or reserve scholarships solely on the basis of a donor's recommendation." Recommendations are one of the three criteria our Selection Committees consider when making scholarship awards, in addition to the Financial Circumstances of the student's family (a required factor by state law) and the Narrative provided in the Scholarship Application.
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 (for example, swapping recommendations with another parent for each other's children is prohibited, even in groups of three or more). A taxpayer also may not recommend his/her own child or dependent.
Only certain students qualify to receive Overflow Scholarships. These students must meet one of the following criteria:
- The student attended an Arizona public or charter school for at least 90 days, or a full semester, in the prior school year, then transferred to a private school.
- The student is currently enrolled in Kindergarten at a private school.
- The student is a dependent of a member of the U.S. Armed Forces who is stationed in Arizona under military orders.
- The student previously received an Overflow or Corporate Scholarship in a prior year, and has attended private school continuously since.
Since ACSTO is a certified 501(c)(3) charitable organization, any giving which goes above and beyond the allowed tax credit maximums can still be treated as a charitable deduction. In addition, donations made by taxpayers who have no Arizona tax liability would fall under this category. Donations of these types will appear in a separate column on your ACSTO donation receipt labeled "Other Contributions." For more information about claiming your ACSTO donation as a charitable gift, we encourage you to speak to your tax advisor.
Give us a call at 480.820.0403 today—we'd love to help! Our office is open Monday–Friday between 9am–12pm and 1pm–4pm. Can’t call us during that time? No problem—contact us online, and we'll get back to you within one business day.
Thank you for making Christian Education affordable for Arizona families!