School Tax Credit Information

ATTENTION PARENTS, FRIENDS, & FAMILY OF MOHAVE VALLEY SCHOOL DISTRICT

2007 ARIZONA TAX CREDIT
DONATING TO SCHOOL AT NO COST TO YOU 

As a taxpayer, you initiate a school donation, and Arizona pays the bill?  What a deal?  This article, in question and answer format, will give you the fine points on how the tax credit works, and how you can donate money to a school'’ activities, which are out of the normal day at no cost to you. 


Click Here for Tax Credit Form

What is this tax credit I’m hearing about?  Is this a tax deduction?

The tax credit means that you get the amount you donate deducted from you Arizona State tax bill for your 2006 filing, providing that you have a tax liability that is in excess of your donation.  The amount of your tax bill will be reduced by the amount of your donation.  If you have an amount due, that amount will be reduced by the amount of your donation; if you are entitled to a refund, your refund will be increased by the amount of your donation.  We will give you an official tax credit receipt that you will attach to your State return as evidence of your donation.  In essence, you initiate a donation that is paid for by the Arizona State treasury.  As a taxpayer bonus, you may also list your donation as a charitable donation that is paid for by the Arizona State treasury.  As a taxpayer bonus, you may also list your donation as a charitable donation on your federal form if you file the “the long form.” 

How much money may I donate for the tax credit?

A married couple filing jointly may donate any amount up to a maximum of $400 during the calendar year of 2007.  A person filing as a single may also donate any amount up to a maximum of $200 for the year.  Worthy of note is the fact that the tax credit is based on a calendar year, not a school year.  Donations for the 2007 tax credit should be made by December 21, 2007, since the schools will be closed for winter break for the remainder of the calendar year.  However, donations can be made to the district office, although they too will be closed on December 24th, 25th, and 31st for the Christmas holidays. Anyone may donate for a tax credit; having a child in a school is not a requirement.  Grandparents might be interested in this, also.

 What if I have students in two or more schools?  What are the rules for donating?

The rules above apply for the maximum in family donation.  If you choose to make donations at multiple schools, that’s fine, but the total donated to all schools selected may not exceed the maximum of $400.  You will receive a receipt at each school where you donate. 

How and when do I make the donation?

Donations may be made to a specific school at the school office at any time the school office is open.  Just come in, see the school secretary, make your donation, get your official receipt, and you’re finished.  Just be sure your donation is made during 2007. 

Will my donation be used at the school I specify, or will donations be “pooled” among all district schools or go to a general fund for all schools in the state?

Donations made at a school will stay at that school and be used to benefit that school’s extracurricular programs.  Regulations prohibit donations given to a specific school to be “pooled” to a larger fund.  

How will my donation be used at the school?

The law regarding the tax credit is very specific that donations will be used for extracurricular school activities.  Extracurricular is defined as any school-sponsored activity, which takes place outside the school day.  This includes after-school intramural activities in which students pay a fee such as clubs, fine arts performances, etc.  Overnight field trips may be funded by tax credit donations, but field trips that schools take during the school day may not be paid for with tax credit money; those trips are considered “co-curricular” rather than extracurricular.

What’s the catch?  Having the State of Arizona give me a tax credit for a donation I make to a school seems too good to be true.

There is no catch.  Your school donation will cost you absolutely nothing out of pocket.  People who pay Arizona tax on their income in excess of the amount they choose to donate are really initiating a donation to the school from the State treasury.  The only inconvenience is that you must make your donation by the end of December, and you will not have your tax credit (reduced tax bill or tax refund) until you file your 2007 Arizona State tax return.

This article in part was taken from several other schools.