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, an Arizona Department of Revenue certified school tuition 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 individual 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?
Qualified school means a nongovernmental primary or secondary school, or a preschool for handicapped students, that is located in Arizona and that does not discriminate based on race, color, handicap, familial status or national origin. Qualified school does not include a charter school or any program operated by a charter school.

What do I have to do to qualify for this credit?
You must make a cash contribution to the Brophy Community Foundation by April 15th of the year immediately following tax year you are filing. 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. Brophy Community Foundation has never accepted donor designated contributions. A school tuition organization cannot award, restrict or reserve scholarships solely on the basis of donor recommendation. A taxpayer may not claim a tax credit if the taxpayer agrees to swap donations with another taxpayer to benefit either taxpayer’s own dependent.

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 the Arizona Tax Forms & Laws page link located on the left sidebar of this 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.

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.