Donations to foster care can light up the future of a child.
Availing the Tax Credits for Donations Made
Many companies in Arizona allow for AZ charitable tax credit for Arizona residents, provided you make the donations through licensed foster cares such as Arizona Friends of Foster Children Foundation located in Phoenix, Arizona.
The donations made by you will be used for educational programs for the kids in foster care. They even offer scholarships and awards to outstanding students for achieving their dreams and turning them into responsible adults. If you are donating individually, the maximum amount you can avail the tax credit on is $500 and for couples, it is $1000. You can even contribute to qualifying charitable organizations such as hospitals (QCO)
If you have made donations to hospitals, then you can download the Arizona form 321 to claim the tax credit. In case of donations made to foster care, then you can download and fill form 352 or 301 that falls under qualifying foster care charitable organizations (QFCO).
If you are making cash donations, you can discuss it with your employer on how this can be adjusted and deducted from your payroll. When you make a cash donation to Arizona Friends of Foster Children Foundation, they will share the receipt for the same. This can be used to file for state income tax returns along with the foster care’s tax ID and organization ID.
If you are not familiar with how income tax works, it is natural to get confused between tax deductions and tax credits. The benefit is that both of these help in reducing your taxes in their way. A tax credit gives you a dollar for dollar reduction on your tax liability. Tax deductions lower your taxable income depending on the income tax bracket percentage.
Filing the Tax Forms on Time
Arizona taxpayers need to claim tax credits before the end of the financial year. So if you are donating for 2019, then you need to make it before mid-April 2020. If you are contributing through IRS, the contribution deadline might differ from Arizona state deadlines.
In addition to making donations to foster care, you can even opt to made donations to multiple charitable organizations and avail multiple tax credits:
- Contributing to private school tuitions organizations
- Contributing to public school tax credits
- Tax credits for electric vehicles
The charitable tax credits can be carried forward for up to five years if they are not used recently. Make a difference it a child’s life by contributing generously.