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Arizona’s Corporate Low-Income Tuition Tax Credit Program

11-3-2020 Update:  The Arizona Department of Revenue states $20,397,014 remains available under the $123,042,188 annual aggregate cap. Corporate Credit Applications are being approved as received until the cap is met. 

Since 2006, Arizona’s business community has been directly involved in providing school choice options for students in Arizona.  See how your business can support children in obtaining a great private school education!

How it Works for Businesses

  • C-Corporations, S-Corporations, and Insurance Companies that pay Premium Taxes may participate in the Corporate Tuition Tax Credit Program.  LLC entities that are taxed as S-Corporations are also eligible.
  • Participating businesses receive a dollar-for-dollar tax credit against their Arizona Corporate Tax Liability.
  • Business contacts AZTO to donate and completes the Corporate Donation Form Request.
  • Corporate donor may recommend a specific participating school but not individual students.  Eligible students must meet a state defined low income threshold.
  • For fiscal year 2020-2021, the Corporate Credit Aggregate Cap is $123M. The Arizona Department of Revenue (ADOR) must pre-approve each corporate donation request to monitor the annual aggregate cap.
  • ADOR opens the approval process for fiscal year 2020-2021 donations on July 6th, 2020.  Interested businesses should contact AZTO prior to June 30th for this opening approval cycle. (For fiscal year 2018-2019, the aggregate cap was met within minutes on the opening day of application submissions.  For fiscal year 2019-2020, the cap was not met.)
  • Corporate donations must be at least $5,000. There is no limit to the donation maximum other than it must be approved by the ADOR and under the annual fiscal year aggregate cap.
  • AZTO submits donation applications to the ADOR for approval as directed by the state.
  • 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 discloses the approval status of the donation application request to AZTO.
  • AZTO notifies the business of their approval status. If approved, the business then has 20 days to make the credit donation to AZTO.  If the donation is not made within the 20-day period, the ADOR approval is voided.
  • If the ADOR annual aggregate cap is not met in July, additional approval cycles will open based on the credit available under the cap.  AZTO will continue to accept Corporate Donation Form Requests until the annual cap is met.
  • AZTO issues a receipt to the corporate donor. The receipt is then used by the business to claim the corporate credit.
  • Credit is to be claimed in the tax year in which the contribution is given.
  • Any unused corporate donation credit may be carried over up to five additional years.
  • ADOR Form 335 is used in claiming the credit.
  • In 2006, Arizona implemented the Low-Income Corporate Tax Credit. (ARS 43-1183 & 43-1089.04)  For more information, see ADOR website.

How it Works for Students

  • Apply to AZTO for your student.  Only one annual AZTO application per student is required for participation in all AZTO credit programs.  See Apply Now for AZTO’s current application.
  • Student Eligibility: Students with low to modest household income are only eligible for participation.  (Example: Below ~ $85,000 for a household of 4)
  • Eligible students must meet a state defined financial need metric and one other qualifier:
    • Kindergarten student
    • Transfer student from an Arizona public school
    • Military dependent
    • Prior recipient of an Individual or Corporate Tax Credit Award
  • Tuition awards are only made as funding is available.
  • AZTO’s Corporate Award Cycle is in September.  See Timeline for more award details.
  • Application deadline is August 31st.

 

AZTO Corporate Tax Credit Donation Form Request

AZTO Corporate Tax Credit Brochure