Are you looking for a new way to divert some of what you owe the state? Arizona Public Radio’s Howard Fischer reports on a new tax credit.
The credit is available for donations to what are called qualifying foster care organizations. This is an extension of existing credits for qualifying charities: groups that spent at least half of their revenues on low-income Arizona residents. The cap on those credits is $200 for individuals and $400 for couples. Donations to the foster-care groups qualify for double those credits. But, Sean Laux of the Department of Revenue said these groups have to meet some additional qualifications.
“You have to serve at least 200 foster children in Arizona,” he said. “And then at least 40 percent of your budget has to be spent on services.”
Credits are essentially a diversion of taxes. Once a taxpayer computes the state taxes owed, the credit is applied, reducing that person’s tax liability by that amount. Put another way, the credit costs the taxpayer nothing: It’s either paid to the charity, or paid to the state. But, Laux said those who max out on the new foster-care credit cannot also take the credit for charitable groups. Either way, would-be donors need to act fast: Tax credits are available only for donations made before the end of the year. That’s Tuesday.
A list of qualifying organizations is available on the Department of Revenue’s website at www.azdor.gov and click on tax credits.