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Donating To The Best Qualified Charitable Organizations in Arizona

by | Jan 13, 2022 | Blog, Qualified Charitable Organization

A qualified charitable organization or QCO and their participation with Arizona’s tax credit as gifts date back to 1998. In 2012, the benefits for the use of tax credits were extended to help the state residents with temporary assistance funds, particularly for low-income families and children with disabilities or chronic illnesses. From being called the “Working Poor Tax Credit,” this opportunity is now known as the Arizona Charitable Tax Credit. A qualified charitable organization in Arizona can issue a receipt from a donation given by an individual or couple and be used during tax filing.

What Do I Need To Know About Arizona’s Charitable Tax Credit Opportunity?

Would helping a family or individuals in need in Arizona through your tax credits be something you can consider? We have prepared a general guideline about donating your Arizona charitable tax credit to the best charitable organizations in the state. Nevertheless, please do note that it might still be best to do an in-depth consultation with a professional tax advisor for the specifics of your tax situation.

  • The donation should come from an individual or a couple sharing one tax account.
  • Donations from foundations, cooperatives, corporations, or partnerships are unacceptable for qualification to use tax credits.
  • The contribution must be in the form of money (cash or online transfer). In-kind donations like services, books, toys, and goods are not included in terms of the tax credit.
  • The donations must clearly state the name of the qualified charitable organization in Arizona. Payables to non-certified philanthropic institutions are not eligible for the tax credit.
  • If your tax credit was not applied to this year’s tax obligation, it could be carried forward to the next tax year.
  • The allowable credit limit for donations to a qualified charitable organization in Arizona is $400 for individuals and married people filing separately, while it is $800 for a couple’s joint filers.
  • A taxpayer can enjoy a dollar-for-dollar benefit, helping individuals and couples lower their state tax liabilities, depending on their allowable limits.

Qualified charitable organization

How To Make Donations To A Qualified Charitable Organization in Arizona?

The process of donating to Arizona’s best charitable organizations as part of the charitable tax credit program is relatively concise. All an Arizona taxpayer needs to do is follow our four-step process:

Step 1: Find and donate to a reliable and qualified charitable organization with a 501(c)(3) registration like Children’s Care Arizona.

Step 2: Receive a receipt of your donation from the QCO, which you, in return, can use when filing your taxes.

Step 3: Accomplish the necessary tax forms to claim your tax credits for your donations to the best charitable organizations in Arizona. It should include the Arizona Form 321, specifically for contributions made to QCOs.

Step 4: Carefully calculate and review your individual tax return and subtract the tax credit from your total tax liability. Ensure to include all the necessary forms and receipts when submitting your tax reports.

Using Your Payroll Withholding For the Arizona Charitable Tax Credit Application

Did you know that you can make a charitable donation using your payroll withholding? Through Arizona Forms 352 and 321, you are allowed to record the charitable contributions you made during the years through your payroll withholding. The condition is that your employer made the donations to an Arizona-qualified charitable organization deducted from your pay.

Key Dates You Must Remember When Making Donations

Contrary to the common belief, there is no need for Arizona taxpayers to donate to their best charitable organizations before the 31st of December to be eligible for the state tax credit in the same year. The state permits taxpayers to apply for the charitable tax credit until April of the following year. For example, the deadline for making a donation and applying it under your tax credit for the 2021 tax year is the 15th of April, 2022.

However, ensure that the charitable contributions you made for different calendar years are filled separately using Arizona From 352 and 321. If you made the donation between the 1st of January and 31st of December, 2021, you must list them on Part 1, Sec A of Form 321. However, use Part 1, Sec B of the same form if you made your contribution from 1st of January to 15th of April 2022.


qualified charitable organization

Final Thoughts

The State of Arizona offers fantastic opportunities to help other people through giving options to donate through your state tax credits to the best charitable organizations. In return, you can lower your tax liabilities. While there is a lot of information to fully understand how this charitable tax credit works, here is a quick summary of the pointers mentioned above.

  • This Arizona Charitable Tax Credit only applies to individuals or couples with joint filing. It is entirely different from tax deductions and is not applicable when filed as an organization, corporation, or partnership.
  • Unapplied donations that can be applied with your tax obligations as credit can be carried forward to a maximum limit of five successive years.
  • Single taxpayers’ allowable credit limit is $400, while taxpayers using joint-filing have an $800 acceptable credit limit for qualified charitable organizations’ contributions.

Are You Ready To Donate?

Using the information above, you can contribute to the best charitable organizations in Arizona today and use your tax credits for a noble cause. More to helping families, schools, institutions, and individuals using the tax credits, you now have control of where your tax dollars are used.

If you are on the lookout for Arizona’s best qualified charitable organization, please consider donating your tax credits to Children’s Care Arizona, a 501(c)(3) charitable organization that is qualified to receive your donations and provide a receipt, which you can use in filing your taxes. Rest assured that your donation will go and support a child’s care needs for schooling and supervision. Help us change lives today.

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