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Arizona Form 321 Contributions to Charities That Provide Assistance to the Working Poor

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Arizona Form 321 Contributions to Charities That Provide Assistance to the Working Poor

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NOTE: Beginning 2014, 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 help to the working poor. The maximum amount of credit for these donations is $200 for single taxpayers or heads of household. For married taxpayers, the maximum credit is $400. 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 allowed from $200 to $400 ($400 to $800 for married filing joint). If you made cash contributions to both types of charities during the taxable year, the total combined maximum
credit allowed for the 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 non-foster care qualifying charitable organization. For married taxpayers, the total combined maximum credit allowed for the taxable year is $800 but no more than $400 of the total may be for contributions to a non-foster care qualifying charitable organization.


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. If you are married filing a separate return, but you could have filed a joint return, you may take only 1/2 of the total credit that you and your spouse would have been allowed to take 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. 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.


NOTE: You may be able to make contributions to these charities through your payroll withholding. Contact your employer and ask if they can withhold contributions for this credit from your pay. For more information about this credit, see the department’s publication, Pub 710, Credit for Contributions to Qualifying Charitable Organizations.

What is a Qualifying Charitable Organization?
A qualifying charitable organization (charity) is a charity that is exempt from federal income tax under Internal Revenue Code (IRC) § 501(c)(3). A qualifying charity is also a charity that is a designated community action agency that receives Community Services Block Grant Program money under the United States Code, Title 42, Section 9901. The charity must spend at least 50% of its budget on services to Arizona residents who receive Temporary
Assistance for Needy Families benefits, who are low income Arizona residents, or who are chronically ill or physically disabled children.

For the purpose of this credit, qualifying services are services that meet the recipient’s immediate basic needs. The services must be provided and used in Arizona. Services that meet these needs include cash assistance, medical care, childcare, food, clothing, shelter, job training, and job placement services.A qualifying charitable organization also includes charities that are qualifying foster care charitable organizations. A qualifying foster care charitable organization is a qualifying charitable organization that each operating year provides services to at least two hundred foster children in Arizona.
The charity must spend at least 50% of its budget on services to foster children in this state.

"Foster child" means a child placed in a foster home or child welfare agency. "Foster home" means a home maintained by any individual or individuals having the care or control of minor children, other than those related to each other by blood or marriage, or related to such individuals, or who are
legal wards of such individuals.

How Can I Tell if a Charity Qualifies? In order to qualify, a charity must provide the Department with written certification that it meets the criteria necessary to be considered a qualifying charity. To see if a particular charity qualifies, you should visit the department’s website and click on Tax Credits to see a list of the qualifying charities.


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Views: 959 Created on: Jun 15, 2013
Date updated: Sep 11, 2015
Posted in: STATES, Arizona

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