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Arizona Tax Deductibles Charity-Focused

by | Aug 12, 2020 | Tax Credits, Blog

Charitable giving is one great way to express one’s compassion and show camaraderie, particularly within a community. The State of Arizona shows their appreciation to citizens who are so inclined to share with their fellowmen that they passed a law on it, the Arizona Qualifying Charitable Tax Law. This law does not merely reward charity-giving taxpayers but also encourages everyone to give back to their community. 

What does this law say? 

This particular tax law allows you to receive a dollar-for-dollar tax credit on your AZ State taxes when you contribute to any of the Qualifying Charitable Organizations certified and included in the list provided by the Arizona Department of Revenue. 

You are allowed a maximum credit of $400 for single filers or $800 for joint filers. Since there’s already a dollar-for-dollar credit, these amounts are no longer eligible for the 25% deduction. However, whatever donations you make that exceed the amounts mentioned above qualify for the 25% deduction. 

It’s also important to note that this only applies to cash donations; hence, property or in-kind contributions such as books and services do not qualify. There is also no minimum dollar requirement, only the maximum cap amounts. Individuals could make a $10 or $20 donation and receive a tax credit in the same amount.

Arizona Charitable Tax Credit

What are charitable organizations on the list? 

Qualifying Charitable Organizations (QCOs), as defined by the Arizona Department of revenue, are those that “provide immediate basic needs to residents of Arizona who receive temporary assistance for needy families (TANF) benefits, are low-income residents of Arizona, or are children who have a chronic illness or physical disability.” The list of QCOs is updated every year, so if you are thinking of getting a tax credit on your donation, be sure to check if the organization you will be giving to is a certified QCO. 

What does this law actually do? 

There have been Federal Tax deduction limitations that have been imposed. The Arizona Qualifying Charitable Tax Law allows citizens to stretch their dollars within the limits of the law. This means that any tax relief from this Arizona tax law could be channeled by the citizens to other charitable institutions. It would be like increasing the value of your dollars to benefit more people from whatever amount you so graciously give. 

Tax, by principle, is imposed and collected for public purposes which means that the benefits would be funneled back to the people. However, like this particular one imposed by Arizona, charitable tax laws allow citizens to have a more personal connection as to where their particular dollars go. It is more personal in the sense that the charitable organizations included in the certified list operate within Arizona or benefit the people of Arizona. Such a program allows people to choose organizations close to their hearts that could benefit from the taxes.


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