General Instructions
NOTE: You must also complete Arizona Form 301, Nonrefundable Individual Tax Credits and Recapture, and include Forms 301 and 321 with your tax return to claim this credit.
Arizona law provides a credit for cash contributions made to certain charities that provide assistance to residents of Arizona who either receive Temporary Assistance of Needy Families (TANF), are low income residents of Arizona, or are children who have a chronic illness or physical disability.
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.
The maximum amount of credit that a taxpayer can establish for the current taxable year for these donations is $400 for single taxpayers or heads of household. For married taxpayers filing a joint return, the maximum amount of credit that a taxpayer can establish for the current taxable year is $800. In most cases, for married taxpayers who file separate returns, each spouse may claim only one-half (1/2) of the total credit that would have been allowed on a joint return.
The maximum credit may be increased for cash contributions made to a qualified foster care charitable organization that is also a qualified charitable organization. If you made a contribution to a qualified foster care charitable organization, you can increase the maximum credit amount established from $200 to $400 for single taxpayers or heads of household; and $400 to $800 for married filing joint. 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.
You are not required to contribute to a qualified charitable organization in order to claim a credit for contributions made to a qualified foster care charitable organization. If you only made cash contributions to a qualified foster care charitable organization, you may claim the amount contributed up to the maximum credit of $400 for single taxpayers or heads of household. For married taxpayers, the maximum credit is $800.
However, if you made cash contributions to both types of charities during the taxable year, the total combined maximum credit that you can establish for the current taxable year is $400 for single taxpayers or heads of household but no more than $200 of the total may be for contributions to a nonfoster care qualifying charitable organization. For married taxpayers, the total combined maximum credit that a can establish for the current taxable year is $800 but no more than $400 of the total may be for contributions to a non-foster care qualifying charitable organization.
NOTE: The maximum amount of credit established for the current taxable year does not include any unused valid carryover amount(s) from prior taxable years. Because this is a nonrefundable credit, the total amount of available credit [current year plus any valid carryover amount(s)] that a taxpayer may use for the taxable year cannot be greater than the tax liability shown.
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.
You cannot claim both a tax credit and an itemized deduction for the amount of contributions made to a qualifying charitable organization for which you are claiming a credit.
You may qualify for this credit if you make cash contributions to a qualified charity through an Umbrella Charitable Organization (UCO). An UCO is a charitable organization that collects donations on behalf of member charities and directs that donation as designated by the taxpayer to a qualifying charitable organization or a qualifying foster care charitable organization that is certified by the department. In this case, 100% of the donation to a specific qualifying charitable organization or qualifying foster care charitable organization or to a specific fund of the UCO must be distributed to a qualifying charitable organization or a qualifying foster care charitable organization that is certified by the department. The UCO will need to provide you with a receipt for your donation that specifies the qualifying charity or fund to whom the donation is designated and certifies that 100% of the donation will be distributed to the named charity. If a fund is designated then the receipt should certify that either 100% of the fund is distributed to a qualifying charity that is certified by the department or 100% of the fund is distributed to qualifying foster care charitable organization that is certified by the department.