Arizona Private School Tax Credit

Arizona tax law (A.R.S. AZ 43-1089) gives Arizona taxpayers a dollar-for-dollar tax credit on their state income tax obligations, for donations made on behalf of a school, through a qualified School Tuition Organization (STO). Magical Journey Learning Center receives donations through two state-approved STO’s- Arizona Tuition Connection (ATC) and The Institute for Better Education (IBE). These STO’s provide Magical Journey scholarships through three state tax credit programs.

Arizona Tuition Connection

Institute for Better Education

How much can I donate?

There are two separate Individual school tax credits, The ORIGINAL Individual Tuition Tax Credit, and the SWITCHER/PLUS Tax Credit. The maximum donation amounts increase every year. The amounts shown below are for the 2017 tax year.

Tax Credit #1: The Original Tax Credit allows a $555 credit for a single taxpayer and a $1,110 for a married couple filing jointly. Donors receive a dollar-for-dollar tax credit against their annual Arizona state income tax liability.

Tax Credit #2: The PLUS tax credit (became law in 2012 as A.R.S. 43-1089.03), allows donors to receive a dollar-for-dollar credit for a contribution over and above the Original tax credit donation. The Arizona taxpayer must first (or simultaneously) contribute the full Original amount ($1,085/married or $543/single) to be eligible to donate any additional amount to the PLUS tax credit program.

IMPORTANT: If the taxpayer has actual Arizona state income tax less than the maximum allowable, the available credit in a given year is limited to the taxpayer’s actual tax (otherwise known as your liability). The tax law allows a carry forward for up to five years if a donation is made in excess of the actual state income tax due.