For a printer friendly version, click: 2008 FAQ's.pdf What is a school tuition organization? A school tuition organization is one that is tax exempt under Section 501(c)(3) of the Internal Revenue Code and allocates at least 90 percent of its annual revenue to scholarships or grants, and makes its scholarships/grants available to students of more than one qualified school. AZTO allocates 93 percent of its annual revenue. What is the maximum dollar amount of the credit? The credit is equal to the amount contributed. However, for single taxpayers or heads of households, the credit cannot exceed $500. For married taxpayers that file a joint return, the credit cannot exceed $1,000 in 2008. For married taxpayers who file separate returns, each spouse may claim only ˝ of the credit that would have been allowed on the joint return. What is the deadline to make the donation in order to receive the tax credit? To receive the credit, donations must be mailed to AZTO and postmarked by December 31st. Will donors receive receipts, verifying that they have made a donation?
Yes, you will receive a receipt. Receipts for contributions
postmarked from January 1st through June 30th will be mailed by July 31st of
that year. Receipts for contributions postmarked from July 1st through
December 31st will be sent by January 31st of the next calendar year. Grants will be paid by the end of the next month following receipt of both Donation Form (with donation) and Grant/Scholarship Application. Therefore, payments will be paid between 30 and 60 days after submission of both forms and donation. When will Scholarships from Donations with no specific students recommended be paid to the school for the benefit of a student? Scholarships are to be paid annually and payment will occur by March 15th. Scholarship awards are primarily based on financial need. Scholarship applications must be received by January 31st. If my child has been recommended by a donor, do I still need to send in a completed application? Yes. Applications are valid for the entire school year: applications need to be resubmitted annually, beginning in July. When applying for a Grant &/or Scholarship are tax returns required? NO, if applying for “GRANTS FROM DONATIONS WITH RECOMMENDATIONS FOR A SPECIFIC STUDENT”. Do not submit tax returns. YES, if applying for “SCHOLARSHIPS FROM DONATIONS WITH NO SPECIFIC STUDENTS RECOMMENDED”. Scholarships are based upon financial need. Submit the first two pages of your most recent year’s tax return. How will the desire of the donor be taken into account with the grant allocation? The desire of the donor will be reviewed in determining the grant allocation. However, the desire of the donor is subject to the complete and sole discretion of AZTO. What schools are eligible for scholarships and grants from AZTO? May we recommend a school? Northwest Christian School, Bethany Christian School, Christian Academy of Prescott, Desert Springs Christian Kindergarten, Joy Community School, Legacy Classical Christian Academy. You may indicate on the donation form that you recommend a school without having to choose a specific student. May a student receive funds from two or more school tuition organizations? Yes. Can a taxpayer claim both the Private School Tuition Credit and the Public School Tax Credit? Yes. You may also donate $200 if you are a single individual or head of household or $400 for a married couple filing a joint return. Where do I get the tax forms needed to claim the credit?Arizona Forms 301 and 323 are available by calling the Department of Revenue (602) 542-4260 or visiting their web site at www.azdor.gov/Forms/credits.asp. Typically, the forms are available in early December of each tax year. Does AZTO accept matching gifts from employers?No.May we recommend a grandchild to receive a tuition grant? Yes, as long as they are not a legal dependent. Who may claim these tax credits? These credits are available only to individuals who file Arizona state income taxes. Is my donation also eligible for a federal income tax deduction? AZTO is a federally tax exempt 501(c)3 charitable organization. Your donation may be eligible for a federal deduction if the donation is given without any recommendation for a specific recipient student. You should consult with your tax adviser for specific tax advice concerning the deductibility for you. More information can be found at www.irs.gov. Can a taxpayer receive a refund of these credits? No. The credits may only be used to the extent they reduce a tax liability to zero. Any unused amounts may be carried forward for not more than five consecutive taxable years. What do I have to do to qualify for this credit? To qualify for this credit, you must make cash contributions to a school tuition organization that provides scholarships or grants to qualified schools. Will the Department of Revenue certify school tuition organizations? No. There is no requirement that the department certify a school tuition organization. However, the taxpayer should ask questions of the organization to determine if the organization (1) is tax exempt under Section 501(c)(3) of the Internal Revenue Code; (2) allocates at least 90 percent of its annual revenues to scholarships; and (3) makes scholarships available to students of more than one school. Are there situations where a contribution to a school tuition organization would not qualify for the tax credit? The law lists only one situation that does not qualify for the tax credit. The credit will not be allowed if the taxpayer designated a donation to the school tuition organization for the direct benefit of a dependent of the taxpayer. Who manages Arizona Tuition Organization (“AZTO”)? Members of the Board of Directors of Arizona Tuition Organization are involved with Northwest Christian School (NCS). Members of the Board of Directors in their positions as directors receive no compensation for their services. The present Board of AZTO is as follows: · Brett Roehr, MBA, President and Treasurer. · Matt Davidson, School Superintendent. · Michael Trueblood, CPA. · Thomas Hartzler, CPA. THE TWO MAJOR BENEFITS FROM USING ARIZONA TUITION ORGANIZATION ARE AS FOLLOWS: 1) 93% OF FUNDS WILL BE DISTRIBUTED. 2) MONTHLY GRANT DISBURSEMENTS WILL BE MADE BETWEEN 30 TO 60 DAYS AFTER SUBMISSION OF BOTH FORMS AND DONATION. These questions and answers are not intended to provide individuals with tax or legal advice. Interested persons should consult the Arizona Department of Revenue, the Internal Revenue Service, or their tax advisor for specific guidance relative to their particular tax situation. Additional information may be obtained from the Department of Revenue’s website at www.azdor.gov/brochure/707.pdf or by calling (602) 255-3381 in Phoenix or (800) 352-4090, toll-free for other areas. |