WHAT IS THE ARIZONA FOSTER CARE TAX CREDIT?

This is a charitable contribution you can give to qualifying 501(c)(3) organizations. Through Destiny House Foundation., you can replace what you owe in state taxes all at no additional cost to you. In other words, your gift redirects your tax to help the children Destiny House serves.

HOW DOES IT WORK?

When you receive your W-2 and complete your tax return, one of three things will happen:

1. You end up having no tax liability.

2. You overpaid during the year and are receiving a refund

3. You owe additional state taxes because not enough withholdings occurred during the year throughout your paychecks.

If you fall into #2 or #3, you’ll pay Arizona state income taxes. Taking advantage of the tax credit allows you either to increase the amount of refund you receive from the state or decrease what you owe to the state. It also allows a say in what your tax payment actually does. 

 WHAT IF I DON'T OWE STATE TAXES?

The Arizona Foster Care Tax Credit dollars may be carried forward for up to five years, reducing future tax liability.

HOW DO I FILE FOR THE CREDIT?

There is a simple line that will be included with the state tax form that you or your accountant will complete.

DOES THIS TAX CREDIT ALSO APPLY TO FEDERAL TAX RETURNS?

The Arizona Charitable Tax Credit is a dollar-for-dollar reduction only on your state taxes. You may also be able to claim a federal tax deduction for the amount donated. Check with your tax professional.

IS A TAX CREDIT DIFFERENT FROM A TAX DEDUCTION?

Yes. Tax deductions are expenses, including charitable donations, that reduce your total taxable income and therefore the amount of tax you pay. A tax credit is different: A tax credit allows you to redirect 100 percent of the amount designated (up to $1000 for taxpayers filing jointly and $500 for individual taxpayers), dollar-for-dollar, to the areas you choose.

Additionally, if you itemize your taxes on your U.S. federal tax return, you may be able to claim your donation as a federal tax deduction, thus lowering the amount of federal tax you’ll pay to the IRS.

CAN I ALSO TAKE ADVANTAGE OF OTHER STATE TAX CREDITS?

Yes! Donating to Destiny House Foundation is a 501c3, does not limit your ability to give under other Arizona Tax Credits, such as private and public school tax credits. You can give and benefit under all three tax credits! For additional information, check with your tax professional.

PLEASE NOTE

This is not professional tax or legal advice. Consult a tax adviser about your specific situation. For more information on the tax credit call 1-800-352-4090.