GIVING THE GIFT OF CHILDHOOD DOESN’T COST YOU A DIME!
The Arizona Tax Credit allows individuals and couples to make a contribution to a “Qualifying Foster Care Charitable Organization,” including the Arizona Friends of Foster Children Foundation, and direct where your tax dollars are spent and support local children in foster care. You’ve got questions…we’ve got answers! Read on for answers to some more commonly asked questions.
Q: WHAT IS THE ARIZONA TAX CREDIT FOR QUALIFYING FOSTER CARE CHARITABLE ORGANIZATIONS?
A: Arizona law allows you to claim a tax credit of up to $1,000 for taxpayers filing jointly and $500 for individuals for voluntary contributions you make during any taxable year to a Qualifying Foster Care Charitable Organization. To become a Qualifying Foster Care Charitable Organization you must provide assistance to low income residents of AZ, or chronically ill or disabled children. In addition, you must serve at least 200 children in foster care in Arizona and spend at least 50% of your budget on ongoing services to children in foster care. AFFCF served more than 4,000 children in 2015. Approved charities’ names are listed on the Department of Revenue’s website (www.azdor.gov).
Q: HOW DOES IT WORK?
A: When you receive your W-2 and complete your tax return, one of three things will happen.
- You end up having no tax liability.
- You overpaid during the year and are receiving a refund or
- You owe additional state taxes because not enough withholdings occurred during the year throughout your paychecks.
If you fall into #2 or #3, you’ll pay Arizona state income taxes. Taking advantage of the tax credit allows you either to increase the amount of refund you receive from the state or decrease what you owe to the state. It also allows a say in what your tax payment actually does.
Q: IS THERE A LIMIT TO HOW MUCH I CAN GIVE?
A: Of course, the Arizona Friends of Foster Children Foundation will accept donations in any amount. Thanks to a law signed in 2016, the most you can give that will quality for the tax credit is:
- $500 – Single Filer
- $1,0000 – Married Filers
Q: CAN I MAKE MONTHLY PAYMENTS AND STILL RECEIVE A TAX CREDIT?
A: Absolutely! Just contact us directly at 602.252.9445 to schedule payments that best suits your budget.
Q: WHO CAN CONTRIBUTE?
A: Anyone can contribute to ‘give the gift of childhood’ to a child in foster care. Anyone who pays Arizona state taxes, whether you itemize or not, single or married, can qualify for the tax credit.
Q: WHAT’S THE DEADLINE TO CONTRIBUTE?
A: Beginning in 2016, you must give before the tax filing deadline for the tax credit to apply to the current tax year.
Q: WHO RECEIVES THE CONTRIBUTIONS?
A: Your donation to AFFCF will provide a social, athletic or educational activity or item to a child in foster care in Arizona that would not be paid for in any other way. AFFCF funds awards for such items and activities as apartment set ups for youth aging out of foster care, summer camp, class photos, gymnastics, karate, music or swimming lessons, prom expenses, school field trips, sports registration, tutoring services and post secondary scholarships.
Q: CAN I DONATE ONLINE?
A: Yes! Once payment is made online, you’ll receive an email confirmation that the transaction has gone through. At the end of January, a tax record receipt will be mailed to you directly.
Q: HOW DOES AFFCF DISTRIBUTE THE DONATIONS COLLECTED?
A: The first step for a child or youth or caregiver in applying for an award is to complete our simple online application. We confirm with the state that the child is in foster care and then send the completed application to our board program committee for its review. Once the application is approved, we cut the check to the vendor and mail to the caregiver. Our process is efficient and accountable.
Q: DO YOU RECEIVE ANY FUNDING FROM THE STATE?
A: No! As a 501(c)3 nonprofit organization, every contribution is valuable and necessary for our continued success. Our success depends entirely on generous individual, foundation and corporation donors.
Q: IS A TAX CREDIT DIFFERENT FROM A TAX DEDUCTION?
A: Yes. Tax deductions are expenses, including charitable donations, that reduce your total taxable income and therefore the amount of tax you pay. A tax credit is different: A tax credit allows you to redirect 100 percent of the amount designated (up to $1,000 for taxpayers filing jointly and $500 for individual taxpayers), dollar-for-dollar, to the areas you choose.
Additionally, if you itemize your taxes on your U.S. federal tax return, you may be able to claim your donation as a federal tax deduction, thus lowering the amount of federal tax you’ll pay to the IRS.*
We encourage you to check with your professional tax advisor for advice on your personal tax situation and to learn how charitable giving to AFFCF may specifically benefit you.
For more detailed information regarding the Tax Credit program, please call the Arizona Department of Revenue at 602.255.3381 or 800.352.4090 or visit www.azdor.gov.