A tax credit is applied as a reduction to your tax bill. In this case, the credit comes off the top of your state tax bill, lowering the amount of money that you must pay.

This a state tax credit just like the School Tax Credit. Taxpayers are able to take advantage of both Private School Tuition Tax Credit and Public School Tax Credit, as well as the Charitable Tax Credit and the Foster Care Tax Credit, up to your state tax liability.

Beginning in 2013, taxpayers no longer have to itemize deductions in order to receive these tax credits.

The credit reduces your Arizona tax liability even if your employer withheld during the year.  You would receive a refund equal to what your employer withheld less your tax liability after it is reduced by the allowable credit

The working poor tax credit reduces your overall state tax liability and is not impacted by your tax withholdings during the course of the year. If you withheld more than what you owed, the credit will result in an increase in your state tax refund. If you have no Arizona tax liability for the current year, you may carry the tax credit forward for up to five (5) years.

There are two simple forms (AZ Form 301 & 321) that is included with your state tax filing that you or your accountant will complete. The forms are included with materials provided by the State of Arizona to all state tax filers.

It is a charity that is exempt from federal income tax under Internal Revenue Code 501(c)(3). The charity is a designated community action agency that receives Community Services Block Grant Program Money under United States Code, Title 42, Section 9901. The charity must spend at least 50% of its budget on services to Arizona residents who receive Temporary Assistance for Needy Families benefits, who are low income Arizona residents, or who are chronically ill or physically disabled children. Foster Care agencies must meet these requirements PLUS serve a minimum of 200 foster children annually, and 50% or more of their budget must go to serve foster children.

Services mean cash assistance, medical care, child care, food, clothing, shelter, job placement and job training services or any other assistance that is reasonably necessary to meet immediate basic needs and that is provided and used in Arizona.

Yes, a qualifying charitable organization must send a written certification letter to the Arizona Department of Revenue. The Department shall review each written certification and determine whether the organization meets all the criteria to be considered a qualifying charitable organization and notify the organization of its determination. The Department may also periodically request re-certification from the organization.