Note: Beginning 2014, you must also complete Arizona Form 301, Nonrefundable Individual Tax Credits and Recapture, and include Forms 301 and 322 with your tax return to claim this credit.
Arizona law provides a credit for cash contributions made and for certain fees paid to public schools in Arizona. The credit for contributions made or fees paid to a public school must be claimed in the year of the donation. The credit is equal to the amount contributed or the amount of fees paid. For single taxpayers or heads of household, the credit cannot exceed $200. For married taxpayers that file a joint return, the credit cannot exceed $400. In most cases, for married taxpayers who file separate returns, each spouse may claim only one-half (1/2) of the credit that would have been allowed on a joint return.
If the allowable tax credit is more than your tax or if you have no tax, you may carry the unused credit forward for up to the next five consecutive taxable years’ income tax liability. This credit is available only to individuals. Corporations may not claim this credit. A partnership may not pass the credit through to its partners. An S corporation may not pass the credit through to its shareholders. To qualify for the credit, you must make contributions or pay fees to a public school for support of character education programs, or extra curricular activities. You may be able to make credit eligible contributions to a
public school through payroll withholding. Check with your employer to see if your employer has agreed to withhold contributions that qualify for this credit from your pay. A character education program is a program defined in Arizona Revised Statutes (A.R.S.) § 15-719. Under this statute, each district may develop its own course of study for each grade. At a minimum, the character education program must include instruction in the definition and application of at least six of the following character traits: truthfulness, responsibility, compassion, diligence, sincerity, trustworthiness, respect, attentiveness, obedience,
orderliness, forgiveness, and virtue. Extracurricular activities are school-sponsored activities that require enrolled students to pay a fee in order to participate. The activities must supplement the school's education program and may be educational or recreational. Each school district will determine what activities are extra curricular activities for each public school located in that district. Extracurricular activities may include the following.
- Use of band uniforms
- Use of equipment or uniforms for varsity athletics
- Use of scientific laboratory equipment or materials
- In-state or out-of-state trips that are solely for competitive events
Extra curricular activities do not include any senior trips or events that are recreational, amusement or tourist activities. You must make cash contributions or pay fees to a public school or charter school located in Arizona. The school must provide instruction in grades kindergarten through 12. Contributions made or fees paid to any of the following do not qualify for this credit. A nongovernmental school
- A pre-school
- A community college
- A university
- A public school located outside of Arizona
You cannot claim both a tax credit and an itemized deduction for the amount of contributions made to a public school for which you are claiming a credit.
Before claiming this credit, make sure the public school issues you a receipt for the contributions or qualifying fees you paid. The receipt should show all of the following. Name of the public school
Name and number of the school district
Name of the taxpayer
Amount paid or contributed
Date paid or contributed
Description of the activity for which the contributions were made or the fees were paid
Please keep this receipt with your tax records. For more information on school tax credits, see the Arizona Department of Revenue brochure, Pub 707, School Tax Credits.