Arizona Corporate Tax Credits for Low Income or Displaced/ Disabled Private School Tuition Scholarships
Arizona provides an opportunity for Corporations that are domiciled in AZ to redirect up to 100% of their AZ tax liability toward a School Tuition Organization like ASK to be distributed as scholarships for students in private K-12 education. This Tax Liability can be Income Tax or Insurance Premium Tax.
The Arizona Cap on the funds available for for Fiscal Year 2025 opens up July 1st, 2024, so time is of the essence because the cap typically closes very quickly. The Cap that Arizona has designated for low income families is $166.6 million +an additional $6 million designated for displaced/ disabled students, but we still expect the same or higher volume of participation as this is a very popular program for Corporations to utilize.
To summarize, Corporations may redirect up to 100% of their Corporate Income or Insurance Premium tax liability from the State of Arizona to a state licensed School Tuition Organization (STO) like America’s Scholarship Konnection (ASK) and receive a dollar for dollar tax credit.
The Corporation must begin with an application to the AZDoR to receive a pre approval for the credit. Once this pre-approval is issued, The corporation sends to funds to America's Scholarship Konnection, the AZDoR is notified, and the tax credit is issued to the corporation.
The funds are distributed by ASK to families, in the form of scholarships for private K-12 education.
In order to qualify for these scholarships, the criteria is either:
A. Student’s family income cannot exceed 185% of the income required to qualify a child for reduced price lunches.
B.Disabled/ Displaced Student must meet ONE of the following prerequisites:
- Student has a MET or IEP from an Arizona public school (for preschool and grades K-12);
- Has a 504 plan from an Arizona public school (for grades K-12 only);
- Was placed at one time in the Arizona foster care system (for grades K-12 only and will be verified with the Arizona Department of Economic Security)
ARIZONA DEPARTMENT OF REVENUE Application for Approval of the Corporate Income Tax Credit for Donations to School Tuition Organizations (A.R.S. § 43-1183 or A.R.S. § 20-224.06) or Corporate Income Tax Credit for Disabled I Displaced Students (A.R.S. § 43-1184 or A.R.S. § 20-224.07)
- Program Guidelines available at www.azdor.gov: Click on the "Tax Credits" link on left side of home page.
- Send the completed form via email to: [email protected] or Fax to: 866-622-7745
- Questions regarding the program can be directed to: Amy Luksza (623) 217-5005
Attention:
Failure to complete the form will result in a delay in the processing of the request, resulting in an extension of the twenty-day approval period and possibly being moved down in the line for credit requests.