As the hot summer weather begins to taper off and gives way to the beautiful Arizona fall, we wanted to give some useful information on a tax credit opportunity you do not want to let slip away this year. The Arizona Working Poor Tax Credit is a dollar for dollar tax credit that allows you to essentially divert your Arizona state tax dollars to working poor organizations like From Gangs to Jobs.

1. What is a tax credit? A tax credit is different from a tax deduction. A tax deduction reduces your taxable income whereas a tax credit is a dollar for dollar reduction of your tax liability. To put it simply, a tax credit means that for every dollar you are entitled to in tax credits, you pay one less dollar to the Arizona government. For those of you expecting a refund when you file your taxes, this translates into a dollar for dollar boost to your refund at the end of the year. Below is an example of what it looks like on the front page of your Arizona return when you give to a qualified organization (example is for a married filing jointly return).

Front page(s) of AZ tax return:

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2. Can I take the credit in conjunction with other tax credits? In most cases, you are allowed to take the Arizona Working Poor Tax credit in addition to the public school & private school donation tax credits.

3. What is the Working Poor Tax Credit? In 1998, Arizona authorized a tax credit for eligible taxpayers who donate to qualified charitable organizations that seek to help meet the basic needs of the poor within Arizona communities. A maximum credit is available of $400 for married filing jointly families and up to a $200 credit is available for single individuals. From Gangs to Jobs is a qualified working poor 501(c)3 in Arizona.

4. Why give? In summary, by giving to a Working Poor charity like From Gangs to Jobs, you take hard-earned money you would have otherwise handed over as taxes to the Arizona government and give it to an organization that is directly impacting the lives of those in urban poor communities in the greater Phoenix area.

5. Next steps?

  1. Contact your tax professional or visit http://www.azdor.gov/TaxCredits/QualifyingCharitableOrganizations.aspx to make sure you qualify for the credit (more than likely you do!).
  2. Give by December 31st to take advantage of this amazing opportunity for the current year.
  3. Share this article with others so they have the ability to take part in making a difference.
  4. If you have any questions, don’t hesitate to use the contact form under “Contact Us” to get in touch with us! We will be more than happy to answer any questions to the best of our ability and get you the information you need.