The State of Arizona recently announced the corporate donation cap for the private school tax credit programs. The 2023-2024 Fiscal Year Cap is approximately $158 Million for the low-income corporate tax credit and $6 Million for the Disabled/Displaced corporate tax credit.
This program allows C or S corporations to designate funds to assist Low Income, Disabled/Displaced students or students with other factors to attend the right private school for their needs.
- The Corporate application for this credit opens on July 3, 2023, and is allocated based on a first-come-first-serve basis.Once the fiscal year cap is met, donation applications are no longer available until the next fiscal year.
- The minimum contribution must be $5,000 and can be up to the amount of their state income tax liability as long as it does not exceed the statewide cap for the year.An S Corporation does not need a tax liability to pass the credit on to shareholders.
- These donations become a 100% dollar-for-dollar reduction of the Corporation’s Arizona Income Tax.For S Corporations, this credit is passed through to the shareholders proportionately to reduce their AZ individual income tax.
The link below provides additional details regarding the Corporate Tax Credits. Click here for information about the student/family requirements for applying for the various scholarship programs.
If you have any questions, please get in touch with your tax advisor to discuss how this may benefit your C or S Corporation.
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