Owe taxes? School donation tax credit deadline extended

Williams High School math teacher Jet Feliciano explains school district budget challenges to his students. (March 2015 file photo by Ryan Williams/WGCN)

Williams High School math teacher Jet Feliciano explains school district budget challenges to his students. (March 2015 file photo by Ryan Williams/WGCN)

WILLIAMS, Ariz. - Arizonans have been given an extension to donate money to Arizona public and charter schools and receive a state tax credit this year. Beginning in 2016, contributions made to a public school from January 1 through April 15, 2016 may be used as a tax credit on either a 2015 or 2016 Arizona income tax return

According to the Arizona Department of Revenue (ADOR) taxpayers filing in Arizona have the unique opportunity to redirect a portion of state tax dollars they already pay, to public education. The credit allows an Arizona taxpayer to contribute $200 per individual tax return or $400 per joint tax return to a school's extracurricular programs.

Contributions can be made to the school of your choice. Local schools such as Williams Unified School District (WUSD), Heritage Charter School, Ash Fork Joint Unified School District and Maine Consolidated School can accept donations and have many extracurricular activities that can benefit.

"If you owe state income tax you can donate it to our school instead of giving it to the state," said WUSD Business Manager Joyce McNelly.

Activities such as field trips, after-school enrichment programs, character education, clubs, athletics, visual and performing arts, and trips for competitive events can be funded with tax credit money. Senior trips or events that are recreational, amusement, or tourist activities cannot be funded with the tax credit money.

"In the past we have used it for athletics, field trips and travel," McNelly said. "Like state playoffs and assisting with food, uniforms and equipment."

Any Arizona resident paying state income tax can make a tax credit contribution, whether they have a child in school or not. Individuals do not have to donate to the district they live in, they can contribute to any public school in the state.

WUSD Athletic Director Phillip Echeverria said the money has to be spent directly on students

"We use it on some equipment like t-shirts, shorts, knee braces, rib protectors," he said. "We just can't supplant what the school is supposed to buy, but we can enrich it. We use a lot of our athletic donations for travel costs and entry fees."

The credit may only be used to the extent that it reduces a tax liability to zero on an Arizona tax return.

The money must be paid directly to a public or charter school and cannot be paid through a school club or PTSA type organization. Donations must be made to the school district, and can be directed toward a specific activity or to a central fund at a specific school.

According to ADOR, any amount claimed as a tax credit cannot be taken as an itemized deduction, but any excess over the amount claimed as a credit can be claimed as an itemized deduction as long as the contribution did not benefit the individual's dependent.

How it works

If a person made a $300 tax credit contribution to WUSD, when that person files their state taxes it needs to be noted on Arizona Form 322 form. If a person's state tax return calculates to a $500 refund, applying the credit will increase the refund to $800. If the state tax return calculates to a $400 liability (money owed) then applying the credit will reduce the liability to $100. However, a refund received cannot be greater than your state income tax assessment for the tax year.

More information about the credit can be found by contacting a tax professional. Specific details on how to donate to a school and obtain a receipt can be found at: Williams public schools (928) 635-2057; Ash Fork public schools (928) 637-2561; Heritage Charter School (928) 635-3998 and Maine Consolidated School (928) 635-2115.

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