ABC Taxes, Tips & Tools

On 7/10/09 Gov­er­nor Brewer signed HB 2286 which amends ARS 43–1088 regard­ing tax cred­its for con­tri­bu­tions to qual­i­fy­ing char­i­ties.  The law went into effect 9/30/09.

The poten­tial indi­vid­ual income tax credit for vol­un­tary cash con­tri­bu­tions made by the tax­payer dur­ing the tax­able year to a qual­i­fy­ing char­i­ta­ble orga­ni­za­tion is up to $200 in any tax­able year for a sin­gle indi­vid­ual or a head of house­hold & up to $400 in any tax­able year for a mar­ried cou­ple fil­ing a joint return.  The tax-credit has a 5 year carry for­ward. This infor­ma­tion has not changed from the pre­vi­ous years.

The change has to do with the the base­line amount, namely there is no longer a base­line amount from 1996 or any other year.  If the tax­payer donates money to the qual­i­fied char­ity and item­izes their deduc­tions, they are eli­gi­ble to take the credit.

The credit can only be taken if the tax payer item­ized deduc­tions in the tax­able year.

Fur­ther­more, the def­i­n­i­tion of a qual­i­fy­ing orga­ni­za­tion has been expanded.  This still has to be a 501© (3) orga­ni­za­tion or a des­ig­nated com­mu­nity action agency that received com­mu­nity ser­vices block grant monies pur­suant to 42 United States Code sec­tion 9901.  How­ever, a 501© (3) orga­ni­za­tion that spends at least 50% of its bud­get on ser­vices to Ari­zona res­i­dents and their house­holds OR TO CHRONICALLY ILL OR PHYSICALLY DISABLED CHILDREN WHO ARE ARIZONA RESIDENTS are now eli­gi­ble too.  Chron­i­cally ill or phys­i­cally dis­abled as defined in sec­tion 36–262 as chil­dren who are under 21 years of age and whose pri­mary diag­no­sis is a severe phys­i­cal con­di­tion which may require ongo­ing med­ical or sur­gi­cal inter­ven­tion.  Ser­vices to res­i­dents mean cash assis­tance, med­ical care, child care, food, cloth­ing, shel­ter, job place­ment and job train­ing ser­vices or any assis­tance that is rea­son­ably nec­es­sary to meet imme­di­ate basic needs and that is pro­vided and used in Arizona.

The qual­i­fy­ing char­ity MUST be on the Ari­zona Depart­ment of Rev­enue (AZ DOR) qual­i­fied char­i­ties list, posted on www.azdor.gov web­site.  Just because a char­ity has been eli­gi­ble for the char­i­ta­ble con­tri­bu­tions tax credit in the past, do not assume they are qual­i­fied now.  Each char­ity has to re-certify with the state, and most prob­a­bly will, but you should go to the AZ DOR web­site and con­firm that they are still eli­gi­ble in 2009.

Small busi­ness ser­vices and tax­a­tion are our busi­ness. If you need help Please give Art & Busi­ness Con­sult­ing a call. We would love to engage you as a client.

The usual dis­claimers: Although ABC has made every effort to insure the accu­racy of Taxes, Tips and Tools, mis­in­for­ma­tion, dis­in­for­ma­tion, changes, mis­takes, typos and hack­ers hap­pen, there­fore Art & Busi­ness Con­sult­ing LLC takes no respon­si­bil­ity for any action taken or results based on the infor­ma­tion sup­plied here in.   Inter­nal Rev­enue Ser­vice Cir­cu­lar 230 Dis­clo­sure:  As pro­vided for in Trea­sury reg­u­la­tions, advice (if any) relat­ing to fed­eral taxes that is con­tained in this com­mu­ni­ca­tion (includ­ing attach­ments) is not intended or writ­ten to be used, and can­not be used for the pur­pose of (1) avoid­ing penal­ties under the Inter­nal Rev­enue Code or (2) pro­mot­ing, mar­ket­ing or rec­om­mend­ing to another party any plan or arrange­ment address herein.  Art & Busi­ness Con­sult­ing LLC cur­rently does not have a cer­ti­fied pub­lic accoun­tant or an attor­ney on staff; this infor­ma­tion is purely for edu­ca­tional pur­poses and not to be con­strued as legal or finan­cial advice. Art & Busi­ness Con­sult­ing LLC and its employ­ees, mem­bers and asso­ciates are not engage to prac­tice law; you always should dis­cuss legal mat­ters with your attor­ney before talk­ing to any­one else.