What is the Working Poor Tax Credit?
The Working Poor Tax Credit is a dollar-for-dollar charitable contribution you can give to 501(c)(3) corporations (nonprofits). With Arizona’s Working Poor Tax Credit you can receive a dollar-for-dollar tax credit, up to $200 filing single or $400 if filing a joint return, on your state income taxes while helping the homeless – at no additional cost to you.
How do I qualify for Charitable Tax Credits?
You must itemize your charitable contributions to a qualifying charitable organization. Family Promise of Greater Phoenix qualifies as a charitable organization.
2010 Arizona State Tax Credit Forms
What is the difference between a tax credit and a tax deduction?
A tax credit is significantly more beneficial than a tax deduction. A tax credit reduces your taxes, dollar-for-dollar. A tax deduction reduces the taxable income upon which your tax liability is calculated.
Can I take the Working Poor Tax Credit if I take the School Tax Credit?
Yes, they are separate credits and you are allowed to take advantage of both.
Does the tax credit also apply to my federal income tax returns?
If you itemize, you will be able to claim a federal tax deduction in addition to your Arizona Working Poor Tax Credit.
How do I get my tax credit?
As soon as it is made available by the state, Family Promise will send you an Arizona Personal Tax Form 321 showing the amount of your Tax Credit – equal to the amount of your gift up to the limits allowed ($200 for an individual; $400 for a couple filing jointly).Take this form with you to your tax preparer when you are ready to file your taxes. If you complete your own 2011 Arizona Personal Tax return, include the amount of your credit on the appropriate line. That amount will be subtracted from the amount of your tax liability to either increase your refund or reduce the amount due. Attach form 321 to your return.
What are the Downsides of contributing to the tax credit program?
There are none. The State of Arizona is the only state to adopt a tax CREDIT program so that taxpayers can direct charitable contributions to the charities they hold near and dear. It is a wonderful opportunity for citizens to support qualified non-profits while getting a tax credit on their state taxes as well as a deduction on their federal tax return.
