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If I Paid My State Taxes, Can I Still Apply for My AZ Tax Credit?

by | Apr 23, 2022 | Blog, Qualified Charitable Organization, Tax Credits

The AZ tax credit has been created to help the taxpayer cope with the financial level of an individual or family. The taxpayer should acknowledge that the government also needs funds in its expenditures. Charitable organizations and certified school tuition organizations are also created by the government to support the less fortunate people. In turn, tax credits are offered to reward those who want to donate to these charitable organizations. These organizations support the social services that the government cannot provide in totality.


AZ tax credit


But, what if you have already paid your state taxes, can you still apply for your AZ tax credit?

Two scenarios can be generated in this case. The first scenario is in situations where you have paid your income tax and submitted your income tax return. How can you still apply for your AZ tax credit? This case is an over withheld tax that can be refunded to the taxpayer. The AZ tax credit cannot used on the current tax season but can be used on the next tax season.

The second scenario is that you have paid your income tax and have not submitted your income tax return, how can you still apply for your AZ tax credit? You can still apply for the AZ tax credit in your income tax return but have to attach the payment document that you have paid the amount of your tax liability to clear your tax due, which is done in good faith. The explanation of the court about this case is very limited. In such a case that a re-assessment of the tax falls on a tax deficiency, it is acceptable to use the AZ tax credit to be utilized in the current year rather than be forwarded to the succeeding tax year.

No tax liability or have paid your state taxes

If you have not submitted and filed your income tax return (ITR) and have no tax liability or have paid your state taxes, you can still apply for your Arizona tax credits.

There are three AZ tax credit categories that you can choose from, which are non-refundable, refundable, and partially refundable tax credits. Each of the three types has a certain requirement for a taxpayer to meet to be qualified to receive the credit. Below are the three types that a taxpayer can choose from:

  1. Non-refundable type tax credits: This type of Arizona tax credit can be earned in three main types: donating to qualifying charitable organizations, qualifying foster care charitable organizations, and public school credits.
  2. Refundable tax credits: These are tax credits that can give a tax refund even if you don’t owe any tax. This type of Arizona tax credit have some qualification requirements before the taxpayer can avail, which are:
    • An income range of the taxpayer: Refundable tax credits are targeted at low-income individuals. The tax credit has a step level of credit, making the lower range have higher credit.
    • Size of family.
    • The taxpayer has an earned income.
  3. Partially Refundable tax credits: These Arizona tax credits have a combined non-refundable amount and a refundable amount. There are requirements that the taxpayer can be qualified to earn this type of tax credit.


AZ tax credit


Donating to Charitable Organizations

Although you have paid your tax liabilities or tax dues for the current tax year, no one can stop you from donating to charitable organizations because you want to volunteer to give money instead of joining volunteer activities committed persons do in their own time.

Some religious persons donate without expecting any rewards. Charitable organizations that can claim you non-refundable tax credits are as follows:

  • Donating to Qualifying Charitable Organizations: These are organizations that are non-profit and are tax-exempt organizations under IRS code (c) 3. These organizations provide immediate services to needy families and residents of Arizona that are low income and lack the financial capability to pay for basic humanitarian needs. The taxpayer can claim a maximum $400 tax credit when filing individually or a maximum of $800 for a couple filing ITR jointly.
  • You can claim your AZ tax credit for the current tax year or the preceding tax year if the contribution is submitted on or before the 15th day of April. A receipt furnished by the charitable organization must be attached to form 321 when claiming the tax credit.
  • Donating to Qualifying Foster Care Charitable Organizations: These organizations have the same vision and goals as qualifying charitable organizations, but it includes providing basic needs to qualifying individuals in a foster care system. To claim the Arizona tax credit, form 352 is used. The taxpayer may claim a maximum of $500 for filing individually or head of a household or a maximum $1,000 tax credit for a couple filing jointly.
  • A credit of contributing to a Certified School Tuition Organization: Two separate non-refundable tax credits can be availed when donating to certified schools that provide scholarships to students enrolled in Arizona private schools. These two AZ tax credit types are contributions to private schools tuition organizations and certified schools organizations. For private school tuition organizations, use form 323, which can earn a maximum of $611 tax credit for filing individually or a maximum of $1221 for filing jointly. For a certified school tuition organization, use form 348, which can earn a maximum of $608 for filing individually or head of household or a maximum credit of $1214 for a couple filing jointly.


One of the most used refundable tax credits is the Earned Income Tax Credit (EITC). This refundable AZ tax credit is created to help low-income taxpayers, so there are qualifying criteria set for the IRS. To qualify for this AZ tax credit:

  1. Worked with earned income of less than $57,414
  2. Have an investment income of below $10,000.
  3. Own a valid social security number
  4. A US citizen or a resident alien.

The American Opportunity Tax Credit

A partially refundable credit that you can look into is the American Opportunity tax credit. This credit applies to qualified education expenses to an eligible student. A taxpayer must qualify to claim this tax credit. One of the qualifications of a taxpayer is the modified adjusted gross income of $80,000 or less individually ( for a couple $160,000 or less). A taxpayer can receive a maximum of $2,500 per eligible student.

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Paying your income tax is a good thing when you do not owe any tax liability to the government. With your present situation, you are better off than others who have a difficult situation. Imagine if you cannot pay your taxes which you have calculated into your income tax return, a certain penalty will be imposed on you by the government. You have the luxury of purchasing and investing in certain items or other things you want but choosing to donate to charitable organizations to help your community can lighten your heart and mind.

Imagine people who cannot pull things to meet their needs can result in penalties in taxes which you may want to help by donating to charities or have no health insurance for medical consultations or people becoming homeless in your neighborhood. With your helping hand, you can choose cloth, feed the hungry, give a home to the homeless, free medical care, home care, and lots more. See what happens to low-income taxpayers if they cannot pay their taxes, resulting in poverty and penalties.

Learn more about how to use your AZ tax credit, what documents you need, and more by speaking with one of our representatives. Children’s Care Arizona has been helping children for years now. Call us through 480 795 3775.

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