What is the private school tuition tax credit?
Arizona Revised Statute section 43-1089 created the private school tuition tax credit that allows for a credit (maximum $1000 per year for married filing joint taxpayers and $500 per year for single or head of household taxpayers) against state income tax obligations for donations given to the Brophy Community Foundation, a qualified school organization. The credit is dollar-for-dollar. Therefore giving to the Brophy Community Foundation will cost you nothing since it is money you would otherwise have to pay the state as and for income tax.

How is a tax credit different from a deduction?
A tax credit is significantly more beneficial than a deduction. A tax credit reduces your Arizona taxes dollar-for-dollar while a deduction reduces the taxable income upon which taxes are calculated. If you claim the tax credit on your Arizona return you may not also claim this as a deduction. However, you may be able to claim the payment as an itemized deduction on your Federal income tax return.

What is a school tuition organization?
A school tuition organization is a charitable 501(c)(3) organization that allocates at least ninety per cent of its annual revenue for tuition grants to children to allow them to attend any qualified school of their parents’ choice. Additionally, the organization must provide tuition grants to students without limiting availability to only students of one school. The Brophy Community Foundation is a school tuition organization.

What constitutes a qualified school?
A “qualified school” is any K-12 private school in the state of Arizona that does not discriminate on the basis of race, color, handicap, familial status or national origin.

What do I have to do to qualify for this credit?
You must make a cash contribution to the Brophy Community Foundation by December 31st. Checks, Visa, MasterCard, American Express and payment plans accepted.

I have my state taxes withheld from my paycheck. Can I still participate?
Yes, if you have paid your taxes and contribute to the Brophy Community Foundation, you will receive a refund check from the Department of Revenue in and for the amount you have overpaid.

May I designate my donation for a particular student?
No, all donations are placed in a general fund and distributed to students based on financial need.

Can my employer match my donation?
Yes, the Brophy Community Foundation qualifies for employer matching funds programs. Double your contribution by checking with your employer.

How do I claim my tax credit?
The Brophy Community Foundation will send you a letter of acknowledgment for your donation. The credit may be claimed on the designated lines of your Arizona individual income tax return and by completing forms 301 and 323, available on our website.

Do I need to itemize my taxes in order to participate?
No, you do not need to itemize. Every Arizona income taxpayer can claim the tax credit by filing forms 301 and 323, available on our website.

How do I determine what my tax liability is?
Review your state tax return from last year. If your income has not changed much, you can get an idea of what your state tax liability will be for the current year. You should also check with your tax advisor.

Can I also claim my donation as a deduction?
The amount claimed as a tax credit on your Arizona State tax return cannot be claimed as a deduction. However, you may be able to claim the donation as a charitable contribution on your Federal income tax return in addition to the tax credit on your Arizona return.

Is there a public school tax credit too?
Yes, the public school tax credit allows taxpayers to donate up to $400 per year for married couples filing joint and up to $200 per year for single or head of household taxpayers, and receive a dollar for dollar state income tax credit. These donations are used for extra curricular activities at the public school.

Can I take advantage of both the public and private school tax credits?
Yes. A married couple filing joint can donate a maximum of $1000 to a private school and a maximum of $400 to a public school per year. Single and head of household taxpayers can donate a maximum of $500 to a private school and a maximum of $200 to a public school.

How does the Brophy Community Foundation distribute its funds?
Any Brophy student in need of tuition assistance may apply for aid. Students from several of Brophy’s private feeder schools, Saint Michaels Indian School, Saint Peters Indian Mission and Boys Hope/Girls Hope residential students also may apply. All awards are need based and distributed until all available funds are expended.

How can I apply for tuition assistance?
Simply print out and complete the application form available at this website. Be sure to provide all requested documentation and return by due date.

How does the corporate tax credit work?
A corporate tax credit became law in 2006 that allows “C” corporations and “S” corporations that have a tax liability at the corporate level to donate to the Brophy Community Foundation and receive a dollar-for-dollar tax credit. There is no limit to the amount a corporation may donate, but there is a state wide annual cap. Any interested corporation should contact Dawn Kennedy @ 602-264-5291 x6500 or dkennedy@brophyprep.org in order to follow the procedures established and outlined by the Arizona Department of Revenue.

The above is not intended to offer taxpayers legal or tax advice.
For more information contact the Arizona Department of Revenue at www.revenue.state.az.us or 800-352-4090 or 602-255-3381.