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Charitable Tax Credit For Education, Anyone?

by | Aug 12, 2020 | Qualified Charitable Organization

Any taxpayer would want their payment for income tax reduced. A charitable tax credit makes this possible since it reduces the amount of income subject to tax; hence, reducing the amount of tax you have to pay, generally. All the taxpayer has to do is understand what a tax credit is, its different types, know which categories would be most appealing to him and how to claim them in his income tax return.

A charitable tax credit for education is one insightful choice. Tax credits, specifically, an education credit, can help taxpayers with their costly expenses for higher education in the United States. If the credit reduces your tax to less than zero, you may get a refund. There are two charitable tax credit types for education available: the American Opportunity Tax Credit and the Lifetime Learning Credit.


charitable tax credit


Who May Avail of The Charitable Tax Credits For Education?

To qualify for either American Opportunity Tax Credit or the Lifetime Learning Credit, you, your spouse, or a dependent must be enrolled at a qualified school or university. The allowable educational expenses for higher education must also be paid for either you, your dependent, or third party. You must have this stipulated on your income tax return. 

The law requires that to claim the AOTC, both you and your qualifying student have a valid Social Security Number or Individual Taxpayer Identification Number issued before the due date for your tax return. 

Tax credits are also available for donations made by individual taxpayers and for donations made by corporate taxpayers for contributions made to Certified School Tuition Organizations, which provide scholarships to students enrolled in Arizona private schools.

An individual may claim a nonrefundable tax credit for making contributions or paying fees directly to a public school in Arizona for support of eligible activities, programs or purposes as defined by statute. The public school tax credit is claimed by the individual taxpayer on Form 322, which is included with the Arizona income tax return. The County Code, Type Code, and District Code & Site Number (CTDS) of the school must also be indicated. The maximum credit allowed is $400 for those who are married and filing jointly while $200 for single, heads of household, or married but filing separately.  

Donations for scholarship or grants in the category of School Tuition Organization can also be claimed as a tax credit if such donation totals $ 1,110 for an individual or $2,206 for a couple filing jointly. It must be noted that the School Tuition Organization and Certified School Tuition Organization are considered two different subcategories. The credits have to be claimed separately.

Said scholarship or grant is generally an amount paid or allowed to a student at an educational institution to aid in the pursuit of studies. The student may be either an undergraduate or a graduate. 

The Takeaway

With all those charitable tax credit for education available, you surely don’t want to miss out on the opportunity to change the world through education. Your tax credit can help a child get through their schooling expenses through a charitable tax credit. You can also use your tax money to sponsor a child through their tuition in a public, private, or chartered school in Arizona. 

For more information, speak with one of Children’s Care Arizona‘s representatives. We are a qualified charitable organization located in Phoenix, AZ. For many years, we have been helping low-income families with their child care and schooling expenses. You may call us at 480 795 3775 or email at support@childrenscareaz.org.

Get your tax money move today and help change lives for the better. Donate now.


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