The Working Poor Tax Credit allows you to direct your tax dollars to Goodwill of Central Arizona, where we Put People to Work.
Q: What is the Working Poor Tax Credit?
A: The Working Poor Tax Credit is a dollar-for-dollar charitable contribution you can give to 501(c)(3) corporations (nonprofits). With Arizona's Working Poor Tax Credit you can receive a dollar-for-dollar tax credit, up to $400*, on your state income taxes while helping homeless youth and adults - at no additional cost to you. You can either pay the State or you can pay Goodwill.
Q: How do I qualify for Charitable Tax Credits?
A: If you make a cash contribution to Goodwill of Central Arizona and you itemize deductions on your Arizona state tax return, you may qualify for the tax credit.
Q: What is the difference between a tax credit and a tax deduction?
A: A tax credit is significantly more beneficial than a tax deduction. A tax credit reduces your taxes, dollar-for-dollar. A tax deduction reduces the taxable income upon which your tax liability is calculated.
Q: What is a "qualifying charitable organization?"
A: A qualifying charitable organization is a tax exempt (501)(c)(3) organization or community action agency that allocates at least 50 percent of its budget to services that help welfare recipients or the working poor with their immediate basic needs. Services, which must be provided and used in Arizona, may include food, clothing, shelter, cash, health care, child care, job placement and/or job training.
Q: How do I know the organization I support qualifies for the credit under this program?
A: Qualifying organizations are required to send the Department of Revenue a self-certification letter stating that they meet all qualifying criteria. The Department in turn publishes a list of self-certified organizations. To request a list or to see if an organization appears on the list, call the Department of Revenue in Phoenix at (602) 255-3381 or outside Phoenix, toll free, at (800) 342-4090. Or check the Web at http://www.azdor.gov/TaxCredits.aspx.
Q: Does the tax credit also apply to my federal income tax returns?
A: No. The Charitable Tax Credit applies only on your Arizona State income tax. However, you may be able to claim a federal tax deduction for the amount donated.
Q: Can a business make a contribution and claim the tax credit?
A: No. Only individual taxpayers may claim this tax credit.
Q: Can Charitable Tax Credit dollars be refunded or can unused amounts be carried forward?
A: Charitable Tax Credit dollars cannot be refunded. They can only be used to reduce your state tax liability to zero. Any unused dollars may be carried forward for up to the next five taxable years.
Q: Can I make contributions to more than one qualifying charitable organization?
A: Yes, but the total Arizona Assistance to the Working Poor Tax Credit allowed is still $200 per individual or $400 for married couples filing jointly, regardless of the number of organizations you support.
Q: Can I donate food, clothing or services to a qualifying charitable organization and claim the credit for those donations?
A: No. Only cash contributions qualify for the Charitable Tax Credit.
Q: Can my charitable donation be made through payroll deductions?
A: Yes. You can make cash contributions through payroll deductions towards one or more qualifying charitable organizations. Please consult with your employer to set up your payroll deduction.
Q:*What is the maximum tax credit I can receive?
A: The limits are $200 for individuals and up to $400 for married couples filing jointly. You should always consult with your tax advisor as well.
A: The Working Poor Tax Credit is a dollar-for-dollar charitable contribution you can give to 501(c)(3) corporations (nonprofits). With Arizona's Working Poor Tax Credit you can receive a dollar-for-dollar tax credit, up to $400*, on your state income taxes while helping homeless youth and adults - at no additional cost to you. You can either pay the State or you can pay Goodwill.
Q: How do I qualify for Charitable Tax Credits?
A: If you make a cash contribution to Goodwill of Central Arizona and you itemize deductions on your Arizona state tax return, you may qualify for the tax credit.
Q: What is the difference between a tax credit and a tax deduction?
A: A tax credit is significantly more beneficial than a tax deduction. A tax credit reduces your taxes, dollar-for-dollar. A tax deduction reduces the taxable income upon which your tax liability is calculated.
Q: What is a "qualifying charitable organization?"
A: A qualifying charitable organization is a tax exempt (501)(c)(3) organization or community action agency that allocates at least 50 percent of its budget to services that help welfare recipients or the working poor with their immediate basic needs. Services, which must be provided and used in Arizona, may include food, clothing, shelter, cash, health care, child care, job placement and/or job training.
Q: How do I know the organization I support qualifies for the credit under this program?
A: Qualifying organizations are required to send the Department of Revenue a self-certification letter stating that they meet all qualifying criteria. The Department in turn publishes a list of self-certified organizations. To request a list or to see if an organization appears on the list, call the Department of Revenue in Phoenix at (602) 255-3381 or outside Phoenix, toll free, at (800) 342-4090. Or check the Web at http://www.azdor.gov/TaxCredits.aspx.
Q: Does the tax credit also apply to my federal income tax returns?
A: No. The Charitable Tax Credit applies only on your Arizona State income tax. However, you may be able to claim a federal tax deduction for the amount donated.
Q: Can a business make a contribution and claim the tax credit?
A: No. Only individual taxpayers may claim this tax credit.
Q: Can Charitable Tax Credit dollars be refunded or can unused amounts be carried forward?
A: Charitable Tax Credit dollars cannot be refunded. They can only be used to reduce your state tax liability to zero. Any unused dollars may be carried forward for up to the next five taxable years.
Q: Can I make contributions to more than one qualifying charitable organization?
A: Yes, but the total Arizona Assistance to the Working Poor Tax Credit allowed is still $200 per individual or $400 for married couples filing jointly, regardless of the number of organizations you support.
Q: Can I donate food, clothing or services to a qualifying charitable organization and claim the credit for those donations?
A: No. Only cash contributions qualify for the Charitable Tax Credit.
Q: Can my charitable donation be made through payroll deductions?
A: Yes. You can make cash contributions through payroll deductions towards one or more qualifying charitable organizations. Please consult with your employer to set up your payroll deduction.
Q:*What is the maximum tax credit I can receive?
A: The limits are $200 for individuals and up to $400 for married couples filing jointly. You should always consult with your tax advisor as well.
