- What do I have to do to qualify for the School Tax Credit?
To qualify for this credit, you must make cash contributions to a registered school tuition organization that provides scholarships or grants to qualified schools.
- What is a school tuition organization (STO)?
A school tuition organization is one that is tax exempt under Section 501(c)(3) of the Internal Revenue Code, allocates at least 90 percent of its annual revenue to scholarships or grants, and makes its scholarships/grants available to students of more than one qualified school.
- Will the Department of Revenue certify STO’s?
No. There is no requirement that the department certifies an STO. However, the taxpayer should ask questions of the organization to determine if the organization (1) is tax exempt under Section 501(c)(3) of the Internal Revenue Code; (2) allocates 90 percent of its annual revenues to scholarships; and (3) makes scholarships available to students of more than one school
- What is a qualified school?
CSF requires its schools to be certified.
The state defines a qualified school as a preschool that offers services to students with disabilities, nongovernmental primary or secondary school that is located in Arizona and that does not discriminate based on race, color, disability, familial status or national origin. All teaching staff and personnel that have unsupervised contact with students are required to be fingerprinted. A Qualified school does not include a charter school or any program operated by a charter school.
- All approved STO’s are listed on the ADOR’s list of certified STOs.
- What schools does the Christian Scholarship Foundation Award Scholarships To?
Christian Academy of Prescott and Trinity Christian School
- Who may claim the individual school tax credits?
The individual school tax credits are available only to individuals.
School tuition organizations cannot award, restrict or reserve scholarships solely on the basis of donor recommendation. A taxpayer may not claim a tax credit if the taxpayer agrees to swap donations with another taxpayer to benefit either taxpayer’s own dependent.
- What form does an individual use to claim these credits?
An individual that makes a contribution to a qualifying STO would use Arizona Form 323 to claim this credit.
- How do I make a contribution?
You may contribute in one of 2 ways:
- Go to the “Contribution Form” of this website and print out the form. Enter all the necessary information and write a check payable to Christian Scholarship Foundation. Send the check and contribution form to:
Christian Scholarship Foundation
PO Box 10502
Prescott, AZ 86304
- To make a contribution online through PayPal: Fill out the online form and hit “Submit”. you will then be redirected to the donations page. You can pay with a Credit/Debit card or with your PayPay account.
All contributions must be made before December 31 of the current year. Then when you make out your tax return for that year you can claim the tax credit against your taxes.
- What if I already give to Public Schools?
You may give to public schools and still give up to $1,000 for married or $500 for single head of household to CSF
- Can a taxpayer receive a refund of these credits?
No. The credits may only be used to the extent they reduce a tax liability to zero. Any unused amounts may be carried forward for not more than five consecutive taxable years.
- Can a taxpayer claim both credits in the same taxable year?
- Do I have to itemize my taxes?
No. Every taxpayer can claim the tax credit by filling out either the simple tax return or itemized return.
- On the Arizona state income tax return, can a taxpayer claim both an itemized deduction and a tax credit for a contribution made to an STO?
No. Any amount claimed as a tax credit cannot be taken as an itemized deduction. However, you may still claim any excess over the amount claimed as a credit as an itemized deduction as long as the contribution did not benefit your dependent.
- Must a taxpayer have a child in school in order to claim this credit?
- What is the maximum dollar amount of the credit?
The credit is equal to the amount contributed. However, for single taxpayers or heads of household, the credit cannot exceed $500. For married taxpayers that file a joint return, the credit cannot exceed $1,000. If married taxpayers file separate returns, each spouse may claim only 1/2 of the credit that would have been allowed on the joint return.
- Do I get a receipt for my taxes?
Yes. A receipt will be mailed to contributors on or before January 31.
- How do I know what my state income tax is going to be?
Look at last year’s State Tax Return Form 1040; unless your circumstances have changed significantly, this year’s taxes should be similar.
- What happens if my tax credit overpays my state tax obligation?
If you overpay your tax credit, the balance remains with the Department of Revenue and will be carried over for you, so you can apply it to next year’s State taxes.
- My taxes are withheld by my employer so I get a refund each year anyway. Why take a tax credit as well?
If you have your State taxes withheld by your employer or if you pay quarterly, resulting in an overpayment that qualifies you for a refund, you can still participate.
You have prepaid $1,300
You pay a tax credit to CSF of $1,000
If your total tax obligation is $1,100
Refund from AZ Dept. of Revenue $1,200
- Can I make partial payments?
We accept partial payments throughout the year. Please see “Partial Payment Plan” panel on Contribution Form
- Are there situations where a contribution to an STO, as defined in statute, would not qualify for the tax credit?
The law lists only one situation that does not qualify for the tax credit. The credit will not be allowed if the taxpayer designates a donation to the STO for the direct benefit of a dependent of the taxpayer
- Can a taxpayer designate that their tax credit be awarded for a scholarship to one particular student?
Yes. However, the STO reserves the right to use some of the funds to help a needy student if other funds are not available
- An STO must allocate at least 90 percent of its annual revenues to scholarships or grants. Does that mean that the organization must actually pay out 90 percent of its annual revenues in any given year?
No. The organization may, for instance, grant a four-year scholarship to a student and pay the money out in four installments at the beginning of each school year. The total amount of the four-year grant, however, must be included in the allocation percentage of the year in which the scholarship was granted and not split over the life of the scholarship, if the monies were received and became part of the annual revenues of the year the scholarship was granted
- What happens if a student is granted a four-year scholarship, but does not attend for the entire four years?
The STO should as quickly as possible reallocate the unused portion of the scholarship to another student so as to maintain the same allocation percentage in the year the scholarship was first granted.
- Can an STO send a block grant of money to a school for later distribution to students as decided by the school and include that block grant in their annual revenue allocation formula?
No. A student must apply directly to the tuition organization, and the tuition organization must decide whether or not to award the scholarship to the student.
- Can an STO send a check directly to a qualifying school to pay for the tuition of a student?
Yes, as long as the student has applied for and been approved for a scholarship. The check should be forwarded with the stipulation that funds are to be used only for a specific student.
- An STO cannot limit availability to only students of one school. Does that mean that the organization must actually make grants to more than one school?
No. A school tuition organization should have a list of qualifying schools for which they would grant scholarships. They do not have to actually allocate funds to more than one school in any given year, but they must be willing to make grants to more than one school.
- Can scholarships or grants made to an all boys or all girls school be included in an STO’s 90 percent annual allocation test?
- Must an STO make a report to the Department of Revenue detailing amounts and uses of contributions?
Yes. The STO must make a report at the end of each calendar year that shows the total number and dollar amount of contributions received and the total number and dollar amount of contributions awarded by the school. The report should be mailed to the department no later than February 28 of the next year
- Where can I get Additional Information from the State of Arizona?
Phoenix ……………………………………… (602) 255-3381
Toll free from area codes 520 & 928 (800) 352-4090
For Hearing Impaired – TDD only:
Phoenix ……………………………………… (602) 542-4021
Toll free from area codes 520 & 928 (800) 397-0256
Or Write to:
Arizona Department of Revenue
Taxpayer Information & Assistance
1600 W Monroe
Phoenix AZ 85007
For Related Tax Information:
Recorded Tax Information……………… (602) 542-1991
Toll-free from area codes 520 & 928 … (800) 845-8192
Forms by Mail …………………………….. (602) 542-4260