Frequently Asked Questions
Q. What is a tax credit dollar-for-dollar donation?
A. A tax credit reduces an individual’s tax liability (or the total amount of tax debt owed to the government) on a dollar-for-dollar basis, up to the maximum allowable amount. In the State of Arizona, residents can choose to redirect their state tax liability to 5 types of organizations: Public School Tax Credit (applies to public charter schools), Private School Tax Credit, Switcher Individual Income Tax Credit, Qualified Foster Care Organizations, and Qualified Charitable Organizations.
Q. What's the difference between a tax credit and a tax deduction?
A. A tax deduction reduces an individual’s taxable income. For every dollar an individual claims as a tax deduction, their taxable income is reduced by a dollar. Based on the calculation from their income bracket, the individual pays a tax on the amount left over after deductions are subtracted.
Q. What is the maximum I'm allowed to donate?
A. When donating through the Tax Credit program, the maximum allowable amount for single taxpayers, married (filing separately) filers, or heads of households is $400 and for joint taxpayers, the maximum credit is $800. When making a tax deductible donation, we recommend reaching out to your tax advisor for guidance.
Q. Is there a minimum amount I must donate?
A. No. Donors may contribute any amount their budget allows and still be claimed as a tax credit, thereby reducing their state tax liability.
Q. Can you make more than one tax credit donation?
A. YES! You can donate to more than one tax credit organization, as long as the amount donated does not exceed your total state tax liability. For example, if you have a state tax liability of $1200 and you file married, you can donate $800 to Children’s Care Arizona as well as $400 through the Public School Tax Credit.
Q. Can donors request a specific child for the donation?
A. No. Donations made through Children’s Care Arizona are designed to support as many low-income families as possible, therefore, specifying a child is not permissible. However, donors may request a specific organization be the recipient of the donated funds.
Q. How do you qualify for the low-income scholarship funds?
A. State and Federal law require that for a household to qualify as low-income they must:
– be below the 150% Federal Poverty Level
– a resident of Arizona.
Q. Who is eligible to receive scholarships?
A. Everyone is eligible to receive scholarships, however, in order to receive Low-Income funds, they must meet the low-income parameters, which is determined through the application process.
Q. How do families apply?
A. Families’ point of contact is their school/organization. They should reach out to the Children’ Care Arizona representative within their program.
