Tax season is upon us and if you own a corporation, you have the opportunity to direct your tax liability to the people in your community who need it most, our underserved youth.

Catholic Education Arizona (CEA) is a non-profit School Tuition Organization (STO), that is certified by the ADOR eligible to receive redirected tax credit contributions from individuals and corporations to be used in the form of tuition scholarships. Taxpayers receive a dollar-for-dollar tax credit and help underserved students receive a quality education at one of the Catholic schools in the Diocese of Phoenix.

Not all Catholic school students are practicing Catholics yet choose to attend a Catholic school for the quality education provided. Tax Credit scholarships provide the opportunity to help all children, regardless of any background receive a quality education that is focused on moral, academic, and whole-child development.

To direct your corporation’s tax liability to CEA this year, there are a few key things you need to know.

Which Corporations Qualify?

Under the Low Income and Disabled/Displaced Corporate Tax Credit, certain corporations are able to direct up to 100% of their state tax liability to qualified School Tuition Organizations, such as CEA:

  • C-Corporations
  • S-Corporations
  • LLCs who file state taxes as C-Corporations or S-Corporations
  • Insurance companies that collect premiums

To determine if your corporation is eligible to participate, consult with your CPA or contact CEA at 602-218-6542.

How Does It Work?

Once you find out if your corporation qualifies, you’ll need to determine what your state tax liability or insurance premium tax to the State of Arizona is. Your company’s CPA will have access to this information.

While you determine how much you can redirect under the Corporation Tuition Tax Credit, it is important to keep in mind that the State of Arizona limits the total amount of corporate state tax funding that can be used for distribution to private schools. However, if you qualify to contribute and the state maximum has not yet been met, you can redirect 100% of your corporation’s tax liability to Catholic Education Arizona.

Once you find out how much you can direct, all you need to do is complete the Corporate Tax Credit Commitment Form and submit it to Catholic Education Arizona. CEA will then submit your application to the Arizona Department of Revenue when tax credit dollars are available. After your form gets to the Arizona Department of Revenue, your corporation will have 20 days to make the payment to CEA for its tax credit contribution. Your corporation will then list the credit on the standard 120 tax form and file a 335 form attached to its return.

Direct Your State Tax Liability to Catholic Schools Today

When you redirect your state tax liability, you can designate a specific Catholic school that you’d like to receive the funds. Alternatively, your state tax liability can be split between up to 5 schools. You can also choose to redirect it to the general fund. The general fund supports all of the schools associated with CEA, prioritizing those with the greatest need.

To learn more, contact Catholic Education Arizona today by visiting www.ceaz.org or calling 602-218-6542.