CORPORATE/INSURANCE TAX CREDIT SUMMARY

The following is a summary of the corporate tax credit.  Please consult with your company’s tax advisor to determine if it will benefit from this tax credit opportunity.

CORPORATIONS

• “C” corporations, “S” corporations (only if files income tax on a 120 Corporate Income Tax Return) and insurance companies (that pay a premium tax) may receive a dollar for dollar tax credit for cash contributions to the Brophy Community Foundation (BCF) up to the amount of its Arizona state income tax liability. 

• There is no limit to the amount of money a single corporation or insurance company may donate.  There is a statewide cap of $20.736 million for FY 2011.  Each subsequent year the cap will increase by 20%.

• The corporation or insurance company must notify BCF of its intent to contribute and the total amount before making the contribution.  Contributions may not be made directly to the school.

• BCF shall request pre-approval from the Arizona Department of Revenue (ADOR) of the intended corporate/insurance company contribution amount via ADOR’s prescribed form and express mail.

• The ADOR has 20 days to pre-approve or deny the request. The request will be approved if there is credit available under the maximum cap allowed for the fiscal year.  If approved, BCF must immediately notify the corporation.

• If ADOR approves the request, BCF has 10 days to receive the donation from the corporation or insurance company. 

• BCF must notify ADOR of the exact date of receipt of the donation or if it does not receive a timely donation from the corporation/insurance company.

• If the corporate contribution is not received by the BCF within 10 days, the contribution is no longer eligible for the state tax credit. 

• Unused credit can be carried forward for five years.

• The corporation may not designate its contribution for the benefit of any specific student.

• Each corporate contributor is encouraged to consult with its own tax advisor regarding the tax benefits arising from any contribution.

 

BROPHY COMMUNITY FOUNDATION

A School Tuition Organization*

• Brophy Community Foundation (BCF) is a stand-alone 501(c)(3) organization and certified by the Arizona Department of Revenue (ADOR) for participation in the corporate donation program.

• BCF allocates at least 90% of its corporate contributions for tuition aid awards, does not limit the availability of awards to students of one school and allows the ADOR to verify that the tuition aid is awarded to students attending qualified schools.

• The tuition aid limitations for academic year 2010/2011 are $4600 for grades K through 8 and $5900 for grades 9 through 12. These limits are increased by $100 every year. 

• A student’s family may receive tuition aid under this program from multiple school tuition organizations.

• BCF reports to the ADOR, by September 30 of each year, specific information set forth in the law.

• BCF conducts annual financial audits by a certified public accountant and provides a copy to ADOR.

*A school tuition organization is a charitable organization exempt from federal taxation under section 501(c)(3) of the internal revenue code that allocates at least 90% of its annual revenue for tuition aid awards to students attending qualified schools without limiting availability to students of only one school.

 

QUALIFIED SCHOOLS

• A “qualified school” is an Arizona non-governmental primary or secondary school that does not discriminate on the basis of race, color, handicap, familial status or national origin.

• The qualified school must annually administer and make available to the public the aggregate test scores on a nationally standardized norm-referenced achievement test. 

• The teaching staff and any personnel that have unsupervised contact with students must be fingerprinted.

• Qualified schools does not include charter schools or any program operated by a charter school.

• The qualified school must refund to the appropriate school tuition organization a prorated amount of a student’s tuition aid award if the student leaves the school before the end of the school year.

STUDENTS

• The student’s family income may not exceed 185% of the income limit required to qualify a child for reduced price lunches under the national school lunch program AND who either:

• attended a public school as a full-time student for at least the first 100 days of the prior fiscal year and then transferred from a public school to a qualified school; or
• is enrolling in a private kindergarten program at a qualified school; or
• received tuition aid according to #1 or #2 above and the child continues to attend a private school in a subsequent year.

• The student does not have to claim reduced price lunch to receive a tuition aid award. 

• A student’s family may receive tuition aid under this program from multiple school tuition organizations.