Arizona’s Corporate Low-Income Tuition Tax Credit Program
10-31-2019 Update: The ADOR’s Corporate Credit Annual Aggregate Cap has not yet been met. AZTO is still accepting Corporate Donation Application Requests until the state’s cap has been met for 2019.
Since 2006, Arizona’s business community has been directly involved in providing school choice options to students in Arizona. See how your business can support children in obtaining a great private school education!
How it Works
- C-Corporations, S-Corporations, and Insurance Companies that pay Premium Taxes may participate in the Corporate Tuition Tax Credit Program.
- Participating corporations receive a dollar-for-dollar credit against their Arizona Corporate Tax Liability.
- Corporation contacts AZTO to donate and completes the Corporate Donation Form. Interested businesses should contact AZTO prior to June 15th.
- For fiscal year 2019-2020, the Corporate Credit Aggregate Cap is $106M. The Arizona Department of Revenue (ADOR) must pre-approve each corporate donation request to monitor the annual aggregate cap for this credit.
- ADOR opens the approval process for fiscal year 2019-2020 donations on July 1st, 2019. AZTO submits donation applications for approval as directed by the state. (For fiscal year 2018-2019, the aggregate cap was met within minutes on the first day of application submissions.)
- ADOR has 20 days to approve or deny the corporate donation request based on the annual cap limit. If the aggregate cap is met, a Waitlist based on the order of submitted applications is created by the ADOR.
- ADOR communicates to AZTO the approval status of the donation application request.
- AZTO notifies the business of their approval status. If approved, the business then has 20 days to make the donation to AZTO. If the donation is not made within the 20 period, the ADOR approval is voided.
- Eligible students then receive corporate tuition tax awards from AZTO.
- AZTO issues a receipt to corporate donor. This receipt is then used to claim the corporate credit.
- In 2006, Arizona implemented the Low-Income Corporate Tax Credit. (ARS 43-1183 & 43-1089.04)
- Student Eligibility: Students with low to modest household income are only eligible for participation. Families must meet a state defined financial need metric and one other qualifier (kindergarten student, transfer student from a public school, prior recipient of an individual tax credit award or corporate award, or a military dependent.)
- Tuition awards are only made as funding is available.
- Corporate donor may recommend a specific participating school but not individual students.
- Corporate donation must be at least $5,000. There is no limit to the donation maximum other than it must be approved by the ADOR’s annual fiscal year aggregate cap.
- Any unused corporate donation credit may be carried over up to five addition years.
- ADOR Form 335 is used in claiming the credit.
- For more information see ADOR website.