Tax Credit Guide

A tax credit is money that taxpayers receive back dollar-for-dollar from the state for their donation, which goes against what they would otherwise owe as a state tax payment.

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, a tax credit 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.

If you donate through your Donor Portal account, your receipt is available to print or download immediately. If you donate as a Guest (online), by phone, or by mail, your receipt will appear in your portal the day after ACSTO processes the donation.

For donors without a Donor Portal account, an annual receipt statement is mailed by January 31 of the following year. If you need it sooner, call our office at 480.820.0403.

Your receipt will show how your donation is split between the Original and Overflow Tax Credits, and will tell you which forms to use when filing.

Arizona’s withholding tax reduction law (A.R.S. 43-401) allows individuals to authorize their employer to send their state withholding tax amount to ACSTO as a dollar-for-dollar tax credit donation. It counts the exact same as a lump-sum donation — but this way you give smaller amounts throughout the year without touching your paycheck.