2016 Arizona Tax Credits

The State of Arizona has made significant changes for 2016 to individual tax credits.  These tax credits can help reduce your Arizona income taxes with a dollar for dollar reduction of your Arizona State income tax, allowing the taxpayer to self-direct their Arizona income taxes.  These Arizona credits also qualify as a Federal Itemized Charitable Deduction.
 
Below is a summary of the 2016 individual taxpayer credits, requirements, and maximum credit amounts.
 
Public School Tax Credit – The credit limit is $200 for single and $400 for married taxpayers filing jointly.  This credit can be funded into the following year up to April 15^th.  For example, the contribution could be funded between 1/1/17 – 4/15/17 and qualify for a 2016 Arizona tax credit.  However, if funded in 2017, the federal charitable deduction is not available until the 2017 Federal tax return is filed.  For more information on this credit click here.
 
Private School Tuition Tax Credit – The new credit limits, in total, are $1,087 for single and $2,173 for married taxpayers filing joint.  This credit also allows for funding of the credit by April 15, 2017 to reflect a 2016 Arizona credit (similar to the example for public school credit above).  Click here for more information on this credit.
 
Qualifying Charitable Tax Credits

•  Qualifying Charitable Organization Credit – For 2016, this credit has been separated from the Qualifying Foster Care Charitable Organization Credit. The increased maximum amounts are $400 for single and $800 for married filing joint taxpayers.
• Qualifying Foster Care Charitable Organization Credit – Now a stand-alone credit, the increased maximum amounts are $500 for single taxpayers and $1,000 for married filing joint taxpayers. 

These credits now allow for funding of the credits by April 15, 2017 to reflect a 2016 Arizona credit (similar to the example for public school credit above).  For a list of qualified charitable and qualified foster care charitable organizations, please click here.
 
Military Family Relief Fund – This fund provides financial assistance to families of currently deployed service members, post-9/11 military, and veterans.  The law allows the Fund to receive up to $1,000,000 in donations each year that qualify as an Arizona tax credit.  The maximum credit available is $200 for single and $400 for married taxpayers filing jointly.  As of the printing of this newsletter the Fund has received almost $500,000 of their $1,000,000 credit maximum.  We suggest contributing as soon as possible, to ensure you will get tax credit treatment for 2016.  To read more about the Military Family Relief Fund here.