Changes to AZ State Tax Credits 2018

Changes to Arizona State Tax Credits for 2018 Tax Reporting

There have been several changes to the Arizona state tax credit programs that affect the 2018 tax year. Among the major changes are the following:

• Contributions made after August 27, 2018 that provide for a dollar-for-dollar state tax credit are no longer deductible for federal tax purposes. Due to the change, you now have more flexibility in timing your contributions through the due date of April 15^th following the tax year since there is no federal deduction to consider.
• To claim a tax credit for contributions made to qualifying charitable organizations or qualifying foster care charitable organizations for 2018, the organization’s charity code must be included on the tax return to ensure that the organization was an eligible organization. The lists can be found on ADOR’s website. There are different lists for 2018 and 2019 and you must consult the list that covers the year that you make the contribution in cash, not the tax year. For example, if you make a March 2019 contribution to be applied to your 2018 tax return, you must make the contribution to an organization that is listed on the 2019 list (please note that there have been major changes to the qualified foster care organization list for 2019).
• Starting in 2018, contributions to public schools that qualify for the $200/$400 credit are also required to report the District Code & Site Number (CTDS) on Form 322 when filing for the credit. This is a nine digit number that the Arizona Department of Education uses to identify Arizona public and charter schools and can be found on ADOR’s website.

For contribution limits and an overview of several popular Arizona tax credit programs, please review our summary on our website.