Examples
To help illustrate how the Arizona tax credit can benefit you, we created a few scenarios to help understand the benefits for donors. However, be sure you contact a tax expert/advisor for information on your individual situation.
| Mr. Bell*1 | Ms. Goodman*2 | Mr. & Ms. Sanders*3 | Mr. & Ms. Trego*4 | |
| Tax Filing Status | Single | Single | Married | Married |
| State Income Tax Withheld ** |
$600 | $300 | $1,600 | $3800 |
| State Tax Liability |
+ ($705) |
+ ($250) |
+ ($1,350) |
+ ($4000) |
| Tax (Owe)/Refund without Donation |
($105) | $50 | $250 | ($200) |
| Donation to AZ4Education | + $500 |
+ $400 |
+ $1,000 |
+ $3,000 |
| Tax (Owe)/Refund with Donation | $395 | $300 | $1,250 | $2,156 |
| Carry Over for up to Next 5 Years |
$0 | $150 | $0 | $644 |
*Note: examples are for tax credit amounts in 2020 **Note: Shown on your W2
1) Mr. Bell
Mr. Bell is a single Arizona taxpayer, who owes $705 but the amount his employer held was only $600. Mr. Bell will need to pay another $105 to the State to make up the difference when he files his taxes. However, since he donated $500 to AZ4Education to help students at a private school in his community, he will actually get a $395 refund from the State. Important part is that $500 of his income tax dollars are going toward education!
2) Ms. Goodman
Ms. Goodman is a single Arizona taxpayer, who owes $250 to the State of Arizona. Since her employer withheld $300, she will receive a $50 refund (if she didn’t have a tax credit). Ms. Goodman knows the future is dependent on our children and their education, so she gave $400 to AZ4Education. In this case, the Arizona law stipulates that she can not receive a tax credit more than her tax liability (ie. not to exceed $250), so she will actually get a refund from the State of $300 (=250+50) with a carry over credit to next year of $150 (=400-250). Money well spent for our future.
3) Mr. and Mrs. Sanders
The Sanders are a married couple filing jointly and have a tax liability of $1350. They have withheld $1600, so they are expecting a refund of $250 from the State. Considering they have children who are enrolled in a private school, they know the benefit of the STO program, so they have donated the maximum of $1000 to AZ4Education. This means they will be helping another student with a scholarship and they will also be receiving a refund total of $1250. Again, income tax dollars supporting education.
4) Mr. and Mrs. Trego
The Trego’s are married and filing jointly this year. They have a combined tax liability of $3,800 and their employers have withheld $4,000, meaning they would still owe $200. However, they were interested in helping a family, whom they have known for many years. The were able to donate $3,000 to Az4Education and recommend their friends child in private school. Their contribution is more than the max filing status limit of $2,356 for 2020, so they will get a refund for $2,156 from the State for tax year 2020, and have a carry over credit of $644 for up to 5 years.
BE SURE TO CHECK WITH YOUR TAX ADVISOR.