Tax Credit Guide

What is a tax credit?

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.

Tax Credit Explained

Still have questions? Watch this video for a quick walkthrough of how the Arizona tax credit works and how your donation can make a difference for local students.

When can I donate?

Tax credit donations can be mailed or submitted online to ACSTO prior to filing taxes, but no later than Tax Day (whichever comes first), and still be eligible for the tax credit for the previous tax year. For donations made between January 1 and Tax Day, it is up to the donor to determine if the tax credit will be claimed for the previous or current tax year. If claiming for the prior year, donations must be postmarked or submitted online prior to midnight on Tax Day — even if you plan on filing an extension.

Your donation in action

ACSTO uses your tax credit donation to award tuition scholarships to Christian School students at one of our Partner Schools. When you donate, you can identify a specific school — or even recommend a specific student to be considered for a scholarship.

108,000

+
Arizona taxpayers have donated

50,500

+
Students have received scholarships
$

370

Million and counting awarded since 1998

2026 Tax Credit Maximums

SINGLE TAXPAYERS

Original Tax Credit

$787

Overflow Tax Credit

$784

Combined Total

$1571

MARRIED FILING JOINTLY

Original Tax Credit

$1570

Overflow Tax Credit

$1561

Combined Total

$3131

You may donate up to these amounts OR your actual state tax liability, whichever is less.

How do I figure out my liability?

Knowing your state tax liability sounds complicated, but it’s not. Here’s the quick way to find it:

  • Pull out your most recent Arizona tax return and find Form 140.
  • Turn to page 2 and look for the line labeled “Balance of Tax.”
  • That number is your tax liability — the maximum you can claim as a credit for that tax year.

Don’t forget: you can donate any time before you file your taxes (all the way up until Tax Day). This means you can calculate your Balance of Tax first, then donate to ACSTO so you know exactly how much to give without over- or under-donating.

If you still have extra tax liability after donating toward the Private School Tax Credit, you can take advantage of some of Arizona’s other tax credits, too! Use the worksheet below to help plan your tax credit donations.

Know Your Max: How Much Can You Give?

Ready to help make Christian Education affordable for an Arizona student, but not sure how much you should donate? This short video explains the maximum tax credit amounts, and will also help you figure out what your tax liability is.

Claim your credit

Your Receipt

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.

Claim Your ACSTO Tax Credit in Minutes

This short video walks you through how to claim the tax credit for your ACSTO donation — from reading your receipt to filling out the right forms and understanding each section.

Note: This video covers paper tax returns. If you use tax preparation software, it will typically ask about charitable giving and apply the credit automatically.

Tax Forms

If you’re filing paper returns, you’ll need a few short forms to claim your credits. You’ll definitely need Form 301 and Form 323, and you may also need Form 348 if your donation exceeded the Original Tax Credit maximum.

Note: If you’re claiming a tax credit, you cannot use short forms 140A or 140EZ — these don’t include fields for the tax credits.

Form 301

Summary of all Arizona credits — required alongside Forms 323 and 348

Form 301Form 301 Instructions
Form 323

Original Tax Credit — use for the first portion of your donation

Form 323Form 323 Instructions
Form 348

Overflow Tax Credit — use only if your donation exceeded the Original max

Form 348Form 348 Instructions

Other tax credits

Arizona offers several other tax credit opportunities — for charitable organizations, foster care, public schools, and military families. You can donate to as many of these as you like, as long as you have the state tax liability to do so.

ACSTO only deals with the Individual Private School Tax Credits (Original and Overflow) and cannot accept donations for any other type. If you plan to take advantage of multiple tax credits, we encourage you to speak with your tax advisor.

Give without affecting your take-home pay

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.

How to sign up
  1. Check with your employer to see if this is a benefit they’re willing to provide.
  2. Fill out a Withholding Pledge Form (download below).
  3. Return the form to your employer, who will submit it to ACSTO.
  4. Your employer will begin forwarding donations from your state tax withholdings.
  5. View your donations and print receipts at any time through your Donor Portal account.

Donate Your Tax Dollars, Change a Life

You already pay state taxes—so why not decide where that money goes? This short video breaks down how you can donate your state tax withholding to ACSTO as a dollar-for-dollar tax credit donation, funding scholarships for students to attend a Christian school, all without reducing your take-home pay. Watch to see just how simple the process is, from the paperwork to claiming your credit at tax time.

Matching gifts

Want your ACSTO donation to go even further? Some employers will match donations given by their employees to ACSTO. Contact your employer today to find out if your donation is eligible for a Matching Gift.

  1. Make your personal donation directly to ACSTO first.
  2. Complete your employer’s matching gift request and submit it per their instructions.
  3. Once approved, your employer’s giving program will contact ACSTO to confirm your personal donation.
  4. The matching gift is sent directly to ACSTO.

Companies that have matched employee donations

These employers have matched employee donations to ACSTO within the past few years. Don’t see your employer? That doesn’t mean they won’t match — it just means we haven’t received one from them recently.

AbbVie
Alaska Airlines
Allstate
American Express †
Ameriprise
Apple
ADP
AssetMark
BAE Systems
Bank of America
Bank of the West
BASF
Becton Dickinson
Boeing
Bristol Myers Squibb
CarMax
Caterpillar
Charles Schwab
Chubb
Cigna
CVS
Dell Technologies
Eaton
Eide Bailly
Fidelity
Freeport McMoRan †
Gartner
General Dynamics
General Electric
Gilead
GitHub
GoDaddy
Google
Guardian Life Insurance
Hewlett Packard
Home Depot
Humana
Intuit
Johnson & Johnson
JP Morgan Chase
KLA
Marathon Petroleum
Markel
Mastercard
McKesson
McKinsey
Medtronic
Microsoft
Morgan Stanley
Moss Adams
MUFG Union Bank
New Relic
Newrez
Nordstrom
NortonLifeLock
PayPal
PepsiCo
Pfizer
Raytheon
Ryan
Securian Financial
Sentry Insurance
SiriusXM
State Farm
Texas Instruments
The Hartford
Thrivent
Thunderbirds
UBS
Union Pacific
UnitedHealth Group
USAA
Vanguard
Viasat
Voya
Wells Fargo

Matching gifts

Want your ACSTO donation to go even further? Some employers will match donations given by their employees to ACSTO. Contact your employer today to find out if your donation is eligible for a Matching Gift.

  1. Make your personal donation directly to ACSTO first.
  2. Complete your employer’s matching gift request and submit it per their instructions.
  3. Once approved, your employer’s giving program will contact ACSTO to confirm your personal donation.
  4. The matching gift is sent directly to ACSTO.

Companies that have matched employee donations

These employers have matched employee donations to ACSTO within the past few years. Don’t see your employer? That doesn’t mean they won’t match — it just means we haven’t received one from them recently.

  • AbbVie
  • Alaska Airlines
  • Allstate
  • † American Express
  • Ameriprise
  • Apple
  • AssetMark
  • Automatic Data Processing
  • BAE Systems
  • Bank of America
  • Bank of the West
  • BASF
  • Becton Dickinson
  • Boeing
  • Bristol Myers Squibb
  • CarMax
  • Caterpillar
  • Charles Schwab
  • Chubb
  • Cigna
  • CVS
  • Dell Technologies
  • Eaton
  • Eide Bailly
  • Fidelity
  • † Freeport McMoRan Copper & Gold
  • Gartner
  • General Dynamics
  • General Electric
  • Gilead
  • GitHub
  • GoDaddy
  • Google
  • Guardian Life Insurance
  • Hewlett Packard
  • Home Depot
  • Humana
  • Intuit
  • Johnson & Johnson
  • JP Morgan Chase
  • KLA
  • Marathon Petroleum
  • Markel
  • Mastercard
  • McKesson
  • McKinsey
  • Medtronic
  • Microsoft
  • Morgan Stanley
  • Moss Adams
  • MUFG Union Bank
  • New Relic
  • Newrez
  • Nordstrom
  • NortonLifeLock
  • PayPal
  • PepsiCo
  • Pfizer
  • Raytheon
  • Ryan
  • Securian Financial
  • Sentry Insurance
  • SiriusXM
  • State Farm
  • Texas Instruments
  • The Hartford
  • Thrivent
  • Thunderbirds
  • UBS
  • Union Pacific
  • UnitedHealth Group
  • USAA
  • Vanguard
  • Viasat
  • Voya
  • Wells Fargo

Have additional questions about giving to ACSTO?

We’d love to help you receive a dollar-for-dollar state tax credit! Contact us with any additional questions.

Contact Us