Tax Credit FAQ
Whispering Hope Ranch Foundation is a qualifying charitable organization for the Arizona Charitable Tax Credit. This means you can provide hope and healing to children with special needs and receive a credit on your Arizona tax filing.
Frequently Asked Questions
This is not a formal tax guide. Please consult your tax advisor.
The Arizona Charitable Tax Credit is an individual income tax credit for donations to Qualifying Charitable Organizations (QCOs). The maximum allowable credit for contributions is $800 for married filing jointly or $400 for all other filing statuses.
Credits and deductions differ in how they impact an individual’s tax obligations. A tax credit reduces an individual’s tax liability or the total amount of tax owed on a dollar-for-dollar basis. For every dollar an individual claims as a tax credit, his/her tax liability is also reduced by a dollar. A tax deduction reduces an individual’s taxable income. Based on the calculation from his/her income bracket, the individual pays a tax on the amount left over after deductions are subtracted.
Donations must be made by individuals. Corporations, foundations, partnerships, etc. do not qualify for this tax credit. You do not have to itemize to claim this credit.
Donations must be monetary. Property donations, in-kind donations such as toys, books and/or services do not qualify.
This tax credit provides dollar-for-dollar tax benefits, allowing taxpayers to reduce their Arizona tax liability for each dollar donated, up to the maximum allowable limits. For example, if a single filer owes $1,000 in taxes but donates $400 to a qualifying charitable organization, his/her tax liability is reduced to $600.
No. These tax credits are independent of one another so taxpayers can take advantage of multiple tax credits on the same tax return.
No. The state of Arizona allows taxpayers to make eligible tax credit donations through the filing deadline of the current year for the prior tax year. For example, donations made between January 1-April 15, 2022, can be applied to your 2021 tax return or carried forward to future tax years.
The CARES Act, extended through 2021, allows individuals to claim a deduction on their 2021 federal income tax returns for cash contributions made to charitable organizations during 2021 up to $600 for married filing joint and $300 for other filing statuses. You do not need to itemize to claim this deduction.