Corporate Donation FAQ
Q. Does using the corporate tax credit impact my companies bottom line?
A. No, giving toward the corporate tax credit will not affect your company’s bottom dollar. You can take dollars that you would otherwise pay to the state in taxes and donate that amount to education through Private School Tuition Fund 123. This will settle your tax liability with the state and create scholarships for kids.
Q. How does using corporate tax credits benefit my business?
A. There are multiple benefits for businesses who participate:
- This program is an excellent way to stay compliant with tax debt your business owes the state of Arizona.
- This program is a dollar-for-dollar tax credit.
- Customers like companies who support education.
- Consider sharing with your community how you are helping Arizona students receive a competitive education.
- Private School Tuition Fund 123 is certified by the IRS as a 501(c)(3), non-profit organization, so your participation in the program is also a donation to a charitable organization.
- 90% of what you re-allocate goes to create scholarships at the private school or schools you would like to support.
Q. What is the process, what can I expect?
A. Here is the process:
- Determine amount of tax dollars to re-direct, based on your corporation’s tax liability, your CPA maybe able to help.
- Fill out our PSTF123 pledge form and scan and email it by June 30, 2018 to firstname.lastname@example.org
- We will let you know we have received your pledge form.
- PSTF 123 will submit your request to re-direct your business tax dollars to ADOR on July 2, 2018.
- Once ADOR approves your company to re-direct your business tax dollars, PSTF 123 will notify you the same day.
- To use the tax credit your business was approved for, you must send pledge funds within 20 days of being approved.
Q. What types of companies have used Private School Tuition Fund 123 to settle their Arizona tax liability?
A. Examples of the different types of companies that used the corporate tax credit program to settle their Arizona tax liability through Private School Tuition Fund 123 include:
- Owners of restaurant chains
- Steel and metal companies
- Security companies
- Medical companies
- Financial companies
- Construction companies
- Road and Traffic companies
Q. Is this opportunity through the corporate tax credit program to settle my Arizona tax liability available to me?
A. The corporate tax credits are available to:
- corporate taxpayers
- exempt organizations with unrelated business income
- corporate partners of a partnership (if passed through by a partnership)
- individual shareholders of an S corporation (if passed through to their individual shareholders)
- Insurance companies can donate from their premium tax liabilities
Q. How much of my business tax liability can I re-direct?
A. You can donate:
- C Corps may donate up to their state income tax liability for the given tax year, providing it does not exceed the entire statewide cap for the year. If a corporation donates more than their tax liability, it can be carried forward for up to 5 years. (A.R.S. 43-1183)
- S Corps may donate up to their state income tax liability for the given tax year, with a minimum donation of $5,000, and then pass the tax credit on to it’s shareholders proportionately. If a corporation donates more than their tax liability, it can be carried forward for up to 5 years. (A.R.S. 43-1089.04)