How It Works

Tell the state where you want your taxes to go!

Arizona law provides a credit for cash contributions made to certain charities that provide help to the working poor and foster children. These two available tax credits are the CHARITABLE TAX CREDIT and the FOSTER CARE TAX CREDIT.

For the Charitable Tax Credit 2023, the maximum allowed is $421 for single taxpayers or heads of household. For married taxpayers, the maximum credit is $841.

This individual income tax credit is available for contributions to Qualifying Charitable Organizations that provide immediate basic needs to residents of Arizona who receive temporary assistance for needy families (TANF) benefits, are low income residents of Arizona, or are individuals who have a chronic illness or physical disability. The tax credit is claimed on Form 321.

For the Foster Care Tax Credit, the maximum allowed is $526 for single taxpayers or heads of household. For married taxpayers, the maximum credit is $1051.  

This individual income tax credit is available for contributions to Qualifying Foster Care Charitable Organizations that provide immediate basic needs to residents of Arizona who receive temporary assistance for needy families (TANF) benefits, are low income residents of Arizona, or are individuals who have a chronic illness or physical disability, and provide immediate basic needs to at least 200 qualifying individuals in the foster care system. The tax credit is claimed on Form 352.

Taxpayers may take advantage of BOTH of these tax credits up to their state tax liability.

In order to take advantage of this opportunity to direct your tax dollars you must: 
•  Give to qualifying 501(c)(3) organizations of your choice.
•  Ensure the organization(s) has your name, address & telephone number for a written receipt of your gift for tax records
•  Complete your charitable contribution on your Arizona return and claim the credit

What qualifies a charity for the Tax Credit?
A qualifying charity is one that is exempt from federal income tax under IRS Code Section 501(c)(3). An individual income tax credit is available for contributions to Qualifying Charitable Organizations that provide assistance to residents of Arizona who receive Temporary Assistance of Needy Families (TANF) benefits, are low income residents of Arizona, or are children who have a chronic illness or physical disability.  In addition, a Qualifying Charitable Organization may be considered a Qualifying Foster Care Charitable Organization if it meets additional criteria in serving qualified individuals.

Beginning with the 2016 tax year, donations to Qualifying Charitable Organizations and Qualifying Foster Care Charitable Organizations are claimed as separate credits with separate limitations for each. Also beginning in 2016, credit eligible contributions made to either type of organization that are made on or before the 15th day of the fourth month following the close of the taxable year, may be applied to either the current or the preceding taxable year and are considered to have been made on the last day of that taxable year.

 Note: A credit is possible only if you have a Arizona tax obligation and if the credit claimed is less than your Arizona tax obligation.  If the credit claimed is more than your current year Arizona tax obligation, the unused credit may be carried forward up to 5 years.

Qualifying donations may also be made through “umbrella” organizations (e.g. United Way) provided you designate that your donation be given to a qualifying 501(c)(3) charity.