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How does the Arizona Tax Credit Work?
Contribute to the McKenna Youth Foundation and receive a
dollar for dollar return. Here is how it works!
The Arizona State Tax Credit program allows you to make a donation to the
McKenna Youth Foundation (Qualifying Charity Organization)as well as other types
of Arizona tax credits (Military, Foster, Public and Private Schools)and
receive a dollar-for-dollar credit against Arizona state taxes owed. This
donation counts as a charitable contributions and may be deducted on your
federal return if you itemize your deductions.
Donating to tax credit eligible organizations will most likely leave you in a
tax neutral situation – meaning you’ll pay about the same total amount whether
you use the tax credits or just pay the tax. But by donating you get a say in
how the money is spent by choosing which of the tax credit eligible
organizations you contribute to.
You can contribute up to the amount of your expected Arizona tax liability. If
you contribute more than your total state tax amount, the credits can be carried
forward five years, so not to worry if you end up with more credits than taxes.
In general, you must make your tax credit donations by April 15, 2018, in order
for them to apply to the 2017 year. You can find additional information on the
Arizona Dept of Revenue state tax credit page.
The McKenna Youth Foundation is a Arizona Credit for Donations Made to
Qualifying Charitable Organizations (formerly know as the “Working Poor
Credit”)
Contribution amounts eligible for credit: $400 for
single filers/ $800 for joint.
How Tax Credits Work
Assume you normally pay about $3,000 in total Arizona
state taxes. This year you decide to contribute to organizations eligible for
the tax credit.
Let’s assume you make four tax credits (the Arizona Military Relief Fund Credit
for $400, the Working Poor Tax Credit for $800, the Public School Tax Credit for $400
and the Private School Credit for $1,092) for a total of $2,692.
You get a dollar-for-dollar credit against state taxes owed for $2,692. By donating to tax credit eligible organizations,
now your total state tax liability equals $3,000 less
the credit of $2,692, for $308
of remaining tax liability. Your total dollars paid remains $3,000
whether you use tax credits or not – it’s either $3,000
all paid to the state, or $2,692 paid to tax credit
eligible organizations and $308 paid to the state. If
you had already paid in the full $3,000 in state taxes
during the year, you would get a refund for the $2,692.
If you itemize your deductions, you also get to take a federal deduction as a
contribution to a charitable organization for $2,692.
This saves you $673 in federal tax at the 25% rate, or
$403 at the 15% rate. (Note: if you had paid the state
tax of $2,692 rather than contributing to the tax
credit programs, the $2,692 would be part of your
itemized deductions anyway as state taxes paid qualify as an itemized
deduction, so this deduction may not be in excess of what you would get
anyway.)
Your tax professional can answer additional questions about tax credits and the
forms you need to file with your tax return to get the credit.
Please make a Tax Credit Contribution to the McKenna Youth Foundation and MAKE
A DIFFERENCE IN A CHILD'S LIFE!
The Holiday Party for the Children 2017 was Extremely Successful! Thank you to all who participated, this is possible because of YOU!
Thank you Disney for your generous donation!
