Arizona State Tax Credit

On July 10, 2009, Governor Brewer signed into law HB 2286, which amends ARS Section 43-1088 with regards to credits to qualifying charitable organizations providing assistance to Arizona Working Poor. The bill became effective September 30, 2009 and is retroactive to January 1, 2009.

Basically the amendment provides for an individual income tax credit for cash contributions made by the taxpayer during the taxable year to a qualifying charitable organization of up to $200 in any taxable year for a single individual or head of household and up to $400 in any taxable year for a married couple filing a joint return. The credit is available to the extent of the taxpayer's Arizona income tax liability. Excess contributions can be carried over for five years.

The credit can only be taken if the taxpayer itemizes deductions in the taxable year. Effective for contributions made during 2009 and after, there is no longer a "baseline year". If the taxpayer donates money to the qualified charity and the itemize their deductions, they are eligible to take the credit.

A credit reduces the taxpayer's Arizona income tax liability dollar for dollar. The credit is mroe valuable than a deduction, which reduces the taxpayer's taxable income. In other words, taxpayers contributing to qualified charitable organizations will have their Arizona tax liability reduced, dollar for dollar, by the amount of their contribution, up to the limits specified.

River Cities United Way is a qualified charitable organization, which provides assistance to the working poor through its partner organizations. Contributions to River Cities United Way designated to a partner organization providing assistance to the working poor will qualify for the Arizona credit. The advantages of making designated contributions to River Cities United Way are:

Your contribution qualifies for the Arizona credit, in addition to the federal charitable contribution deduction.
Your contribution goes to the partner organization providing assistance to the working poor as you specify.
Your contribution stays in Mohave County as opposed to being distributed state or nationwide.
You can spread your contribution over weekly, bi-weekly, semi-monthly, monthly, quarterly, semi-annual or annual payments via payroll deduction or pledges.
The state of Arizona is, effectively, reimbursing you for your contribution by virtue of the income tax credit when you file your Arizona individual income tax return. (There is no out of pocket expenses when making qualifying contributions!)

IMPORTANT NOTE TO DONORS: United Way is not a tax advisor. For additional information regarding your contributions for the Working Poor Credit contact your tax professional or Michael E. Bonney at Gail Deal Kolesar, CPA, Phone (928) 680-1994, email mike@gdkcpa.com

http://www.azdor.gov/TaxCredits/CharitableTaxCredit.aspx