It Won’t Cost You A Single Penny To Save/Change A Life
- Individuals Suffering From A Chronic Illness (Ex: Cancer)
- Individuals That Need Mental Health Treatment Who Can’t Afford It
- Foster Children In Need
- Homeless Indivuduals In Need
You do have a choice to redirect what you owe on your state taxes to help change a life. When you make a donation to Urban Arizona, you will receive your donation refunded back to you in a form of a tax credit – up to $1,057 for individual tax filers and $2,111 for married filers.
A tax credit boosts your tax return, either by increasing your refund or reducing your owed taxes based on your situation. For example: If you have a state tax liability of $400 and make a $100 donation to Urban Arizona, your new state tax liability will now only be $300, therefore redirecting $100 of your tax dollars to a more meaningful cause.
Urban Arizona is both a Qualified Charitable Organization and A Qualified Foster Care Organization.
Tax Deduction Vs Tax Credit
A tax deduction reduces how much of your income is subject to taxes while a tax credit directly reduces the amount of taxes you owe. Check out the chart below. Which would you rather have?
| Scenarios: | A: $10,000 Tax Deduction | B: $10,000 Tax Credit |
| Income: | $100,000 | $100,000 |
| Tax Deduction: | ($10,000) | n/a |
| Taxable Income: | $90,000 | $100,000 |
| Tax Rate: | 25% | 25% |
| Taxed Owed: | $22,500 | $25,000 |
| Tax Credit: | n/a | ($10,000) |
| Final Tax Bill: | $22,500 | $15,000 |
We’re assuming you would pick scenario B.
Real Time Examples
For our examples, we will be using the Arizona income tax rate of 2.5% which the 2024 single standard deduction of $14,600
| Example 1 | Example 2 | Example 3 | |
| Adjusted Gross Income Claimed (Year): | $18,600 | $22,600 | $26,600 |
| State Tax Owed: | $100 | $200 | $300 |
| Donating $100 would reduce to your state tax liability to $0 | Donating $200 would reduce to your state tax liability to $0 | Donating $300 would reduce to your state tax liability to $0 |
How To Claim The Tax Credit
Step 1a: Estimate your state tax liability HERE or prepare your state tax return without filing it to find out what you owe. Once you know your liability, you will know how much you can redirect.
Step 1b: If you already made a donation, skip to step 4. You can view your past donations and annual reciept HERE
Step 2: Donate the maximum contribution for your filing status or your total liability, whichever is less HERE
Step 3: You will recieve a donation reciept via email.
Step 4a – If you are filing your tax return yourself (Turbo Tax, HR Block, Etc.): When you get to the state return section, you should be asked if you donated to a Qualfied Charitable Organization. Enter the amount and use AZ QCO code: 22476 AND/OR 11079 (Depending on your donation designation)
Step 4b – If you are filing your tax return with a tax preparer: Give your tax preparer your donation reciept with the AZ QCO Code: 22476 AND/OR 11079 (Depending on your donation designation)
Please consult your tax advisor for specific questions related to your taxes. You will have until the day you file, no later than April 18th to redirect your state tax liability.
FAQS
How does the tax credit work?
Here are some general guidelines for using the Arizona Charitable Tax Credit. Please consult your tax advisor for advice on your specific tax situation.
- The gift must be made by an individual (corporations, foundations, partnerships, etc. do not qualify).
- The gift must be made in cash (in-kind donations such as toys, books and services do not qualify).
- The maximum QCO credit allowed for single taxpayers or heads of households is $421. For joint taxpayers, the maximum credit is $841.
- The maximum QFCO credit allowed for single taxpayers or heads of households is $526. For joint taxpayers, the maximum credit is $1051.
How Does Urban Arizona Prevent Tax Credit Fraud?
Urban Arizona recieves a list of all individuals who used are QCO tax credit with the amount claimed the week ending on April 21st. Individuals who committed fraud will owe the tax credit back plus a penalty fee with the state.
Im a W-2 Employee, Have My Taxes Withheld and I Get A Refund. Can I Still Use The Tax Credit?
The purpose of withholding tax is to ensure that you comfortably pay whatever income tax you owe. If you receive a refund, that is because the amount you withheld was greater than the amount you owed. Donating for our tax credit will still decrease what you owe on your state taxes and increase your refund.
For example: If you owe $400 in state taxes, make a $400 donation and withheld $800 for state taxes, you will recieve a $800 refund since your tax liability is now $0 with the $400 donation.
How do I verify Urban Arizona qualifies for the tax credit?
Visit the Arizona Department of Revenue website to see if an organization qualifies as a charity.
Is there a minimum dollar donation requirement for the tax credit?
Short answer: No there is not a minimum. Therefore, if you donate $1, you will receive a $1 tax credit.
Does the Charitable Tax Credit also apply to my federal income tax returns?
The Charitable Tax Credit only applies on your Arizona State income tax. However, you may be able to claim a federal tax deduction for the amount donated.
I currently use the Public Education Tax Credit. Can I use the Charitable Tax Credit as well?
Yes, these two tax credits are independent. You can therefore take advantage of both the Public Education Tax Credit and the Charitable Tax Credit on the same tax return. You