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Can You Use AZ Tax Credit If You Don’t Owe State Taxes?

by | May 18, 2022 | Blog, Tax Credits

AZ tax credit


What does it mean when you don’t owe state taxes in Arizona? When you don’t owe taxes in Arizona or receive a refund from the State of Arizona, your employer has withheld the right amount of money for your tax every paycheck you get. It is a perfect situation wherein each year, a taxpayer will receive the W-2 form from their employer defining the details for filing your income tax for the prior year. In this article, you will be learning more about tax, using your AZ tax credit, and how these things work.

How Important Is The W-2 Form That You Receive From Your Employer?

The W-2 form your employer gives you to file your income tax return for the prior year has extremely important information that taxpayers should know how they got zero tax or a big refund for this year or big tax liability for this year. The W-2 form provides information from the employer concerning your earnings, withholding tax, benefits, and other information. Each year, the employer gives the W-2 form to each employee to file their individual or personal income tax returns.

How Are State Taxes Or Tax Refunds Computed?

Many taxpayers expect refunds each tax season. Some individuals do not prepare their income tax returns, so they do not know how they got a refund or a tax liability. Those taxpayers who prepare for themselves say that it is very simple and knows how to balance their earnings for the next tax season. Taxable income is calculated from your total gross income less than the total exemptions and less than the total deductions.

After calculating your taxable income, this is where your tax withheld from the W2 form comes in. You get your refund or your tax liability by subtracting the tax withheld from your computed taxable income. If the taxable income is equal to the withholding tax, you do not owe taxes in Arizona.

Can You Donate For An AZ Tax Credit Even If You Don’t Owe State Taxes?

If you do not owe any state taxes, certainly you can donate to a non-profit charity organization and earn tax credits for your donations. Your AZ tax credit can be used for the next tax season as it is a rule that it is valid for 5 years from the date of donation. This is a great way to give your luck and good fortune to those less fortunate. A good deed makes others smile. Be sure that you get a receipt or a document for filing your donation for the next tax season.

Certified Non-Profit Charitable Organizations

What if You Don't Owe State Taxes and You Pay for Arizona Tax Credit

The State of Arizona promotes and certifies these non-profit charity organizations for the less fortunate. These non-profit charity organizations link together charity donations and taxes to collect revenues for their operations. Charity donations and taxes are key money factors to be used for the community’s welfare or of the state. There is a difference between charity donations and taxes in which donations can be directed immediately to the donor’s choice.

In contrast, taxes go to a treasury used by the state government’s projects and expenditures. You can choose a non-profit charity organization that is classified as a Qualified Charitable Organization (QCO) or a Qualifying Foster Care Charitable Organization (QFCO).

A qualified charitable organization can provide a maximum $400 AZ tax credit for a taxpayer filing individually or up to a maximum $800 AZ tax credit for a married couple filing jointly. A Qualifying Foster Care Charitable Organization is also one of the non-profit charity organizations that can provide a maximum $500 AZ tax credit to a taxpayer filing income. It can be taxed individually or up to a maximum of $1000 tax credits for a married couple filing income tax jointly.

The State of Arizona has certified lists of these non-profit charity organizations, which we can introduce some as below:

Children’s Care Arizona

Children’s Care Arizona is one of Arizona’s best non-profit charity organizations, providing child care, support, and supervision needs for all ages with low-income families. The QCO school will use the donated funds.

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Arizona Burn Foundation

Arizona Burn Foundation is one of the listed non-profit charity organizations in Arizona established in 1967. Its goal is to improve the life quality of burn survivors and their families and promote burn prevention and fire safety proposals and information drives. Survivors are given professional support, emotional support, compassionate services, financial assistance, development programs for those who encountered the devastating effect of burn injuries until they are not considered burn victims but as normal human beings of value. This foundation is listed as a qualified charitable organization.

Arizona Housing, Inc.

Arizona Housing Inc is one of the certified non-profit charity organizations in Arizona providing a helping hand and reducing the number of rising homelessness, helping people attain self-sufficiency by providing quality affordable housing with comprehensive social services. The organization has been founded in 1995 and owns and operates over 616 cheap apartments in Phoenix, Arizona. With its mission of ending houselessness, the foundation is asking your share for a donation to continue this advocacy.

Aster Aging Inc (formerly East Valley Adult Resources)

Aster Aging Inc is one of the certified non-profit charitable organizations in Arizona, having the vision to be one of the leaders in giving services and resources of quality support to the varying needs of the elder and aging population. They also empower and support older people and families to be independent in engaging with various communities.

Programs are established, such as in-home support, which has two main features that would enable neighbors to support and maintain that seniors will remain in their homes by providing personal care, housekeeping, and in-home respite care that seniors cannot do on their own. This foundation is certified as a qualified charitable organization.

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Black Family and Child Services of Arizona

Since 1984, this foundation has been a non-profit charitable organization providing services to children and families of ethnic backgrounds. There are generous donors and supporters from hundreds of businesses, civic leaders, parents, educators, clergy, private citizens, and others with a kindled heart who have joined to support this agency’s advocacy for its mission and vision towards giving more like services to tens of thousands of families and children and more. The taxpayer will enjoy a qualified charitable organization tax credit in Arizona by donating.

Boys & Girls Clubs of Central Arizona

The Boys and Girls Clubs of Central Arizona is one of the leading non-profit charitable organizations providing after-school and summer programs for youth aged 6 to 18 in the Northern Arizona area. It is believed that youth having a good character and citizenship with a healthy lifestyle can change their life to a better future. This is a qualified charitable organization for your AZ tax credit.

The Takeaway

Donating to a non-profit charitable organization would not give you a refund if you don’t owe any taxes to the state. It gives you a great feeling that you are given a chance to donate to help your community. You are a part of the community, and a healthy community makes you a healthy member of the community. You are given a chance to donate and improve other people’s lives.

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