Utilizing The Arizona Charitable Tax Credit Through Payroll Withholding
Are you interested in an easier way to give to your favorite qualifying charity? On both Arizona Form 321 and Arizona Form 352, you are permitted to record charitable contributions made through payroll withholding, provided that your employer is able to withhold contributions to eligible Arizona Charitable Tax Credit organizations from your pay. Be sure to contact your employer prior to setting up donations through payroll withholding.
St Marys Food Bank Is A 2021 Qualifying Charitable Organization For The Arizona Charitable Tax Credit
St. Marys Food Bank is a Qualifying Charitable Organization and equally important is certified on the Department of Revenues website for Donations made to Qualifying Charitable Organizations. Your Arizona Charitable Tax Credit Donation to St. Marys Food Bank can be included in your Federal Tax Deductions in addition to the Arizona Charitable Tax Credit. St. Marys Food Bank Qualifying Organization Code is 20208. Please consult a qualified tax advisory for personal tax advice.
What Is A Qualifying Charitable Organization
The Arizona Department of Revenue defines Qualifying Charitable Organizations as those that provide immediate basic needs to residents of Arizona who receive temporary assistance for needy families benefits, are low income residents of Arizona, or are children who have a chronic illness or physical disability. QCO organizations are also required to spend at least half of their annual budgets on qualified services for qualified Arizona residents, according to ADOR.
Lets clarify a couple of these QCO requirements.
Temporary Assistance for Needy Families
First, TANF is a federal program that provides grant money to states. The program has a variety of goals, and income eligibility for TANF is determined at the state level. States utilize the federal governments grant funding, often in the form in direct cash assistance, in order to help needy families meet basic needs.
Don’t Miss: St Mary’s Food Bank Phoenix Arizona
Five Year Carry Forward Period
The Arizona Charitable Tax Credit permits any credits for contributions to QCOs and QFCOs that are not applied against tax obligations for the most recent taxable year to be carried forward for a period of five consecutive years. However, the instructions for Arizona Form 321 and Arizona Form 352 both contain an important, identical caveat: You may carry over only that portion of the credit that you do not apply to tax. You cannot carry over any amount that you gave that was more than the maximum amount allowed as a credit.
Lets clarify this limitation with an example. Consider the case of a single taxpayer with an Arizona state liability of $700, who had contributed $500 to a QFCO and $1000 to a QCO in the most recent taxable year. In order to offset their $700 tax liability, this individual may claim the $500 maximum allowable tax credit for a gift to a QFCO and a $200 tax credit for the QCO gift . Since these two credits completely offset the $700 tax owed, the taxpayer now owes the state of Arizona nothing .
Irs Rule Change For Adjusted Gross Income Limit
For years, the IRS had limited tax deductions for charitable contributions to up to 50% of a taxpayers Adjusted Gross Income . However, starting in 2019, for the 2018 tax year, the IRS raised the limit on charitable contributions of cash from 50% to 60% of a taxpayers Adjusted Gross Income, according to page 8 of IRS Publication 5307. The IRS has since maintained a limit on charitable gifts of cash of up to 60% of a taxpayers Adjusted Gross Income. Check out the video below, where Giancarlo Estrada of Kamper Estrada, LLP outlines the IRS rule change for Adjusted Gross Income:
The latest version of IRS Publication 526 should provide additional details on AGI limits. Be sure to consult with your tax advisor before claiming deductions up to the 60% AGI limit.
You May Like: Feeding America Food Bank Locator
St Marys Food Bank Alliance
St. Marys Food Bank Alliance is a nonprofit, nonsectarian organization located in Phoenix, Arizona. Founded in 1967 by John van Hengel, St. Marys was the first modern organization to operate using the food bank model, which spread throughout U.S. and the rest of the world. Today, St. Marys is recognized as the worlds first food bank.
Since its creation, St. Marys has expanded its operations to nine of Arizonas fifteen counties, distributing millions of pounds of food to the hungry each year. St. Marys also operates its own food pantry, allowing people to get food directly from the warehouse. The organization additionally offers specialized programs apart from food banking, including after-school programs for children and career training for adults.
St. Marys is a member of Feeding America, a network of hunger-relief organizations also founded by van Hengel with the purpose of providing food to people across the country.
Guidelines For The Arizona Charitable Tax Credit
- Donations must be made by individuals .
- Donations must be made in cash .
- Donations must be made to Qualified Charitable Organizations or Qualifying Foster CareCharitable Organizations that have been certified by the state of Arizona gifts to non-certified charities are not eligible for the AZ Charitable Tax.
Read Also: Contra Costa And Solano Food Bank
Recent Federal Regulations On Charitable Contributions And State And Local Tax Credits
In August 2018, the IRS and US Department of the Treasury proposed new regulations aimed toward limiting federal tax deductions for charitable gifts for which taxpayers also plan to claim state and local tax credits. Although complicated, the regulations were proposed in order to introduce two high-level changes to federal tax law. First, the regulations would require tax-deductible charitable contributions to be reduced by the amount of the state or local tax credit received or expected to be received on federal tax returns. Second, the regulations would place a $10,000 cap on state and local tax deductions on federal tax returns.
These regulations sparked concern that local charities might see fewer charitable contributions, as state tax credits could become less appealing to donors.
What Is A Qualified Foster Care Charitable Organization
Qualifying Foster Care Charitable Organizations meet all the requirements listed above for QCOs, but with one additional condition. A QFCO charity must spend at least 50% of its budget on services for children who have been placed in foster homes or child welfare agencies, according to the instructions for Arizona Form 352.
Also Check: Good Shepherd Food Bank Hampden Maine
Arizona State Tax Credits Cannot Exceed A Taxpayers Current Tax Liability
You may have noticed from the example above that the taxpayer did not use the $200 tax credit carryover to generate a tax refund for the most recent tax year. This is due to another limitation that is spelled out in the instructions for both Arizona Form 321 and Arizona Form 352, which state, Because this is a nonrefundable credit, the total amount of available credit that a taxpayer may use for the taxable year cannot be greater than the tax liability shown.
Put simply, this means that tax credits from the Arizona Charitable Tax Credit can only be applied up to a taxpayers current Arizona state tax liability. The tax credits cannot be used to receive money back from the State of Arizona. Of course, based on your specific tax situation, you may still be eligible for a State tax refund, so be sure to consult with your tax advisor for advice on your specific tax circumstances.
By comparison, a refundable tax credit can reduce a taxpayers tax liability to below zero, which means if the amount of a refundable tax credit is more than the amount of taxes due, the difference will be paid to the taxpayer as a tax refund, according to the Arizona Department of Revenues Ed Greenberg.
Point In Time Count Results
Results of the 2019 statewide Point In Time count of the homeless are now available. Volunteers from shelter providers, churches, and social service agencies were trained and guided in completing surveys with those living in shelters, on the streets, in parks, late night coffee houses, or wherever they may call home. Results of the count help determine the population of homeless and precariously housed individuals and families in each region of the state. State funding for helping the homeless is partially based on the numbers recorded on that day. Danielle Elkins and Brendan Kearns are co-chairs of the Homeless Council of the Wabash Valley. For information about how you can help reduce homelessness in the Wabash Valley, please contact Danielle Elkins at 232-4798, Opt. 1.
Recommended Reading: Utah Food Bank Donation Guidelines
Food Bank Clients Increase As Store Prices Soar
As the line of cars awaiting groceries wrapped around the building, parking lot attendants used orange cones to close the entrance to the food bank and keep the line from snarling traffic on busy Thomas Road. That sent recent arrivals circling the block until the lot reopened.
This is the new normal for St. Marys Food Bank in central Phoenix as the number of people in need has risen sharply along with inflation.
Right now, were seeing over 900 families a day come to this one location, and we have hundreds across the Valley, said Jerry Brown, director of media relations for St. Marys Food Bank. The number of people who are coming to the food bank is overwhelming, and its a number that we have not seen in our history.
At the two main food banks in Phoenix and Surprise, St. Marys saw a daily average of 1,239 families in the first 12 days of September, the latest data available.
Brown said the influx is a direct effect of inflation, which has hit Phoenix particularly hard. In the Phoenix metro, food prices have increased 14.1% over the past year, with food-at-home prices rising by 15.7%, according to the U.S. Bureau of Labor Statistics.
Once the pandemic subsided last year, so did the number of people who came, Brown said. Weve been around for 55 years, and we have never served 150,000 families a month until last month .
In the first two weeks of September, St. Marys already was trending 6% higher than in August.
Key Points For The Arizona Charitable Tax Credit
So that is what you need to know in 2022 in order to take advantage of the Arizona Charitable Tax Credit for the 2021 tax year. Its a lot of information to take in, and many readers will have skimmed this article, so a handful of key points about the tax credit are summarized below. Hopefully, the tips and information above will prove useful as you calculate your taxable income, plan your charitable contributions, and complete your state and federal tax forms for the 2021 tax year.
Don’t Miss: Food Bank Of North Alabama
What Is Low Income In Arizona
Next, low income sounds like a subjective term, and to some extent it is the income threshold for receiving cash assistance from TANF in Arizona differs from the income limit for Arizona Health Care Cost Containment System eligibility, for example but the states underlying purpose is clear. The Arizona Charitable Tax Credit is intended to spur donations to charitable organizations that provide a significant number of services for Arizona residents experiencing financial insecurity.
About St Marys Food Bank Alliance
St. Marys Food Bank serves to alleviate hunger through the gathering and distribution of food while encouraging self-sufficiency, collaboration, advocacy and education.
St. Marys Food Bank is truly a community-based organization. Individual donors, corporate donors, and private grants help feed hungry individuals and families in our area. Serving 9 of Arizonas 15 counties, we are committed to volunteerism, building community relationships and improving the quality of life for Arizonans in need.
Dont Miss: Food Banks In Orlando Florida
Read Also: World Food Bank Elon Musk
Us Food Insufficiency Surged By 25 Percent After End Of Child Tax Credits: Analysis
The percentage of U.S. families who could not afford sufficient food increased substantially in the months after the federal governments advance child tax credit cash payments expired late last year, a new analysis has found.
These findings, published on Friday in JAMA Network Open, confirmed earlier fears from public health experts, according to the authors: that the end of this monthly federal pandemic benefit could push millions of American families back into poverty and hunger.
The monthly cash benefits were a key component of the Biden administrations American Rescue Plan providing about 92 percent of U.S. households up to $3,000 per child ages 6 to 17 and up to $3,600 per child under 6 from July through December 2021, the authors noted. Half of the credit amount was distributed ahead of time as advance monthly payments.
From January to July of this year, food insufficiency increased by about 25 percent among families with children, after they stopped receiving payments on Jan. 15, the study found.
This significant increase in food insufficiency among families with children is particularly concerning for child health equity, lead author Allison Bovell-Ammon, director of policy and communications at Childrens HealthWatch at Boston University School of Public Health, said in a statement.
Single-adult, non-Hispanic Black and Hispanic households also encountered greater food insufficiency after losing their payments, the researchers found.
List Of Qualifying Charitable Organizations And Qualified Foster Care Charitable Organizations
Each year, the Arizona Department of Revenue updates its list of the qualifying charities that meet the Departments certification requirements. Greenberg notes that its important for Arizona taxpayers to review this list, stating, The Department of Revenue recommends taxpayers considering a tax credit donation confirm the organization has been certified by the agency as a qualifying charitable organization before making the donation if it is for tax purposes.
Phoenix Childrens Hospital is a 501 organization that meets the state of Arizonas QCO certification requirements, qualifying the Hospital to receive charitable contributions under the Arizona Charitable Tax Credit.
You May Like: Food Bank In New Jersey
Public School Tax Credit
The Public School Tax Credit is a nonrefundable credit for cash contributions to Arizona public schools, including the direct payment of certain types of public school fees, which are outlined in the instructions for Arizona Form 322. This credit was created for individual taxpayers , who can donate to a public school so they can utilize that towards their extracurricular activities sports, art, music, according to Stefan Swiat of the Arizona Department of Education.
However, the scope of this tax credit has expanded, starting with 2019 tax year, according to Ed Greenberg of the Arizona Department of Revenue. He notes, For public schools, one change for this tax filing season is that an individuals contribution to a public school can now go to more than just extracurricular activities, such as acquiring certain capital items such as books and equipment, community school meal programs, student consumable health care supplies and playground equipment. This change is in effect until June 30, 2022.
Eligible Charity Organizations For The Arizona Charitable Tax Credit
The Arizona Charitable Tax Credit is meant to provide taxpayers with a mechanism for supporting charities that offer services to low-income residents with chronic illnesses or disabilities. For that reason, Phoenix Childrens Hospital is certified as a Qualifying Charitable Organization. Phoenix Childrens specializes in providing life-saving and life-changing medical services to critically ill and injured children, and is ranked in all 10 specialties in U.S. News and World Reports list of Best Childrens Hospitals in 2021-2022. Furthermore, 56 percent of patient families at Phoenix Childrens receive health care coverage via the Arizona Health Care Cost Containment System . Phoenix Childrens also takes health care services directly to the most vulnerable in our community through the Homeless Youth Outreach program.
You May Like: Saint Mary’s Food Bank Phoenix
Minimum Dollar Requirements For The Arizona Charitable Tax Credit
Donors often wonder whether they can receive tax credits under the Arizona Charitable Tax Credit for smaller gifts, especially when they want to support a charity but are not able to donate hundreds of dollars. To clarify, there is no minimum dollar requirement for the Arizona Charitable Tax Credit. Charitable contributions to QCOs and QFCOs do not have to exceed a minimum dollar threshold. A single taxpayer who wants to contribute $400 to a QCO and claim the maximum allowable credit may do so likewise, a taxpayer can make a $5 donation, record this gift on Arizona Form 321, and receive a tax credit in the amount of $5 from the state of Arizona.
Arizona State Tax Credits Vs Federal Tax Credits And Deductions
While the state of Arizona permits both tax credits and tax deductions for charitable gifts, IRS rules stipulate that charitable gifts both cash and property must be claimed as tax deductions, rather than credits. In fact, page 3 of IRS Publication 526 spells this out plainly, Generally, you can deduct contributions of money or property you make to, or for the use of, a qualified organization. The IRS only allows deductions for gifts made to qualified tax-exempt organizations, such as 501 entities and other eligible organizations IRS Publication 526 covers this in detail.
You May Like: Food Bank Of Contra Costa
Arizona Standard Deduction Adjustments
In 2019, the passage of Arizona HB 2757 introduced adjustments to Arizonas standard deduction amounts, aligning them with the federal standard deduction. For single and married taxpayers, Arizonas standard deduction was increased to $12,200, from $5,312 a 130% increase. For head of household filers, Arizonas standard deduction was raised to $18,350, from $10,336 . And for married taxpayers, Arizonas standard deduction was boosted to $24,400, from $10,336, a whopping 136% hike.
To allay fears that increasing Arizonas standard deductions could curb charitable giving, Arizona HB 2757 also stipulates that the Arizona standard deduction can be increased by 25 percent of the charitable deductions the taxpayer would have claimed if they had itemized their deductions, according to Ed Greenberg of the Arizona Department of Revenue. This increase ensures that taxpayers who would have otherwise donated and claimed those gifts while itemizing their tax deductions will still be incentivized to make charitable contributions.