Arizona Tax Credits

The Arizona Extracurricular Activity (ECA) tax credit program is a great way to give and get back. You decide how to spend your donation while getting a dollar-for-dollar tax credit. It’s a win-win for everyone! If you have any questions, please feel free to contact our office at (623)247-6456.

Tax Credit Q & A

What is a tax credit?
A tax credit is part of a state law that, among other benefits, allows individuals to donate up to $200 or married couples filing jointly to donate up to $400 per tax year. If married taxpayers file separately, each spouse may claim one-half of the credit allowed on a joint return. The funds benefit the public school of your choice, and the donation can be a tax credit on your Arizona income tax return (A.R.S. 43-1089.01). For more information, please visit the Arizona Department Of Revenue’s website.

What is the difference between a tax credit and a tax deduction?
A tax credit lowers your tax bill dollar for dollar. A deduction shaves money off your taxable income, so the value depends on your tax bracket.

Can a taxpayer receive a refund of these credits?
No. You can only use the credits to the extent they reduce your state tax liability to zero. However, you may carry forward unused amounts for up to the next five taxable years.

Who is eligible to receive the donation?
Eligible schools include public and charter schools. Pre-schools, non-governmental schools, community colleges, and universities do not qualify.

Am I required to have a child in school in order to claim this credit?
No. The taxpayer is not required to have a child enrolled in a public school in order to take advantage of the tax credit.

Can I give to more than one school?
Yes. The total amount claimed cannot exceed $200 for individuals and $400 for married couples in the calendar year.

Can I use this as a deduction on your federal return?
Possibly; however, it is subject to the IRS’s policy on donations. For example, if you are in the 28% tax bracket, you might be able to take $56 of your donations as a charitable donation on your federal return. (Please consult your tax adviser.)

How do the schools use the money?
We use your donations to fund programs and extracurricular activities or Character Education Programs that benefit the students. Extracurricular activities include any optional, non-credit educational or competitive activity that supplements the educational program of the school whether before, during, or after regular school hours. Examples include classroom field trips, after-school enrichment programs, musical instruments, library books, and athletics equipment (which belong to the schools).

How can I make a donation?
We accept by check. Brighton School will provide you with a receipt for your tax records.

Must the credit for contributions made or fees paid to a public school be claimed in the year of donation?
No, beginning in 2016, credit eligible fees paid and contributions made to a public school from January 1 through April 15 of a calendar year may be used as a tax credit on the prior year’s tax return. For example, qualifying contributions made to a public school January 1, 2016, to April 15, 2016, may be used as a tax credit on either your 2015 or 2016 Arizona income tax return.