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:
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)
Link to A.R.S. §20-224-06
Link to A.R.S. § 43-1183
Link to A.R.S. § 20-224-07
Link to A.R.S. § 43-1184
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