Can I claim this AZ QFCO Tax Credit and still donate to other tax credit programs? YES! When you give to Hope Community Services for the Qualifying Foster Care Tax Credit, you can still give to the other tax credit programs (Qualifying Charitable Organization, Public School, and School Tuition). These are all separate, but there is a maximum amount allowable for each. The 2023 limit for the Qualifying Foster Care Tax Credit is $526(single) or $1,051(married). The 2024 limit will increase to $587 (single) and $1,051(married).
Do I have to donate exactly $526 for singles or $1,051 for married couples? No. Amounts lower also qualify. There is no minimum only a maximum for each tax credit. So if you give a gift of $50, you will lower your state taxes by $50.
How do I document my contribution? You will receive a receipt from Hope Community Services documenting your donation (a minimum donation amount may apply). Keep this as proof with your tax return.
Do I need to itemize my taxes to take the credit? No, you do not need to itemize your taxes.
Can I break up my donation into monthly amounts? Yes, you can select the monthly, bi-weekly or even weekly recurring payment option on our online donation page.
Can I make my charitable donation using payroll deductions? Yes, you can make cash contributions through payroll deductions as long as your employer allows it. Some employers even match employee contributions. Your pay stub will act as proof of your donation.
Can I claim a charitable contribution as both an Arizona tax credit and an Arizona deduction? No. Any charitable contribution that is included in itemized deductions on your federal return must be removed from your Arizona itemized deductions if the contributions were claimed as an Arizona credit.
Arizona Charitable Tax Credit(s) can only be applied up to a taxpayer’s current Arizona state tax liability. The total amount of available credit (current year plus any valid carryover) that a taxpayer may use for the taxable year cannot be greater than your tax liability. Make sure to check with your tax consultant for your specific tax situation.
Tax Credit Carryover: The Arizona Charitable Tax Credit permits any credits for contributions to Qualifying Foster Care Charitable Organizations (QFCOs) that are not applied against tax obligations for the most recent taxable year to be carried forward for a period of five consecutive years. The maximum amount of allowable credit established for the current taxable year does not include any unused valid carryover amount(s) from prior taxable years. Because these are non-refundable credits, the total amount available of each credit [current year plus any valid carryover amount(s)] that a taxpayer may use for the taxable year cannot be greater than the tax liability shown on the tax return.
For more information on AZ Tax Credits refer to AZ Department of Revenue.