Frequently
Asked Questions
Are
you interested in making a donation to this dynamic organization?
There are 3 ways to make a tax deductible donation:
1.) DONATE

2.) Arizona Charitable
Tax Credit for the Working Poor. Download
Form
3.) Send a check or Money
Order to:
Circles of Peace
404 W. Crawford St.
Nogales, AZ 85621
or call 520-281-0579
CIRCLES
OF PEACE THANKS YOU FOR YOUR GENEROUS FINANCIAL SUPPORT!
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 $400*, on your state income
taxes while helping homeless youth and adults — at no
additional cost to you. You can either pay the State or you
can donate to the Good Neighbor Alliance and inturn help those
in your own community.
How do I qualify for Charitable
Tax Credits?
You must itemize and deduct your charitable contributions to
establish a baseline year of giving. You must then increase
your giving over your baseline year by making a subsequent $200
cash contribution to a qualifying charitable organization.
What is a baseline year?
Your baseline year, by law, is 1996 if you itemized and deducted
charitable contributions. If you did not itemize in 1996, then
your baseline year is the first year after 1996 that you itemize
and deduct. Your baseline amount is the total amount of charitable
contributions deducted in your baseline year, including cash,
non-cash and carryover contributions.
How
do I benefit from increasing my contributions?
Any contributions to a qualifying charitable organization over
and above your baseline amount qualify for a dollar-for-dollar
state income tax credit up to $200 (or $400 per couple) each
year.
Must I continually increase
my contributions each year from the previous year to be eligible
to claim the credit?
No. Once your baseline year and amount is established, it does
not change.
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.
What is a “qualifying
charitable organization?
” A qualifying charitable organization is a tax exempt
(501)(c)(3) organization or community action agency that allocates
at least 50 percent of its budget to services that help welfare
recipients or the working poor with their immediate basic needs.
Services, which must be provided and used in Arizona, may include
food, clothing, shelter, cash, health care, child care, job
placement and/or job training.
How do I know the organization
I support qualifies for the credit under this program?
Qualifying organizations are required to send the Department
of Revenue a self-certification letter stating that they meet
all qualifying criteria. The Department in turn publishes a
list of self-certified organizations. To request a list or to
see if an organization appears on the list, call the Department
of Revenue in Phoenix at (602) 255-3381 or outside Phoenix,
toll free, at (800) 342-4090. Or check the Web at www.revenue.state.az.us/brochure/welfare.htm.
Does the tax credit also apply
to my federal income tax returns?
No. The Charitable Tax Credit applies only on your Arizona State
income tax. However, you may be able to claim a federal tax
deduction for the amount donated.
Can a business make a contribution
and claim the tax credit?
No. Only individual taxpayers may claim this tax credit.
Can Charitable Tax Credit
dollars be refunded or can unused amounts be carried forward?
Charitable Tax Credit dollars cannot be refunded. They can only
be used to reduce your state tax liability to zero. Any unused
dollars may be carried forward for up to the next five taxable
years.
Can I make contributions to
more than one qualifying charitable organization?
Yes, but the total tax credit allowed is still $200/Single or
$400 for those filing jointly, regardless of the number of organizations
you support.
Can I donate food, clothing
or services to a qualifying charitable organization and claim
the credit for those donations?
No. Only cash contributions qualify for the Charitable Tax Credit.
Can my charitable donation
be made through payroll deductions?
Yes. You can make cash contributions through payroll deductions
towards one or more qualifying charitable organizations.
How much can I donate to this
tax credit?
The limits are $200 per individual or $400 per couple. You should
always consult with your tax advisor as well.
|