You may carry over only that portion of the credit that you do not apply to tax. You cannot carry over any amount that you gave that was more than the amount allowed as a credit.
For example: During 2017, Mary, a single person, gave $1,400 to a school tuition organization. For 2017, Mary is allowed a maximum credit on Form 323 of $546. Mary’s 2017 tax liability is $400. Mary may apply $400 of the $546 credit claimed on Form 323 against her 2017 tax liability. Mary may carryover the unused credit of $146 to her 2018 income tax return. Mary may not claim a credit on Form 323 for the $854 gift that was more than the allowable credit ($1,400 minus allowable credit of $546).
However, Mary may claim a credit on Arizona Form 348 for the contribution made to the school tuition organization that was more than the $546 allowable credit. The credit Mary may claim on Form 348 cannot exceed the maximum credit allowed on that form.
To compute that credit, Mary must complete Form 348 in addition to Form 323. Mary must also complete Arizona Form 301.