One of the best ways to give back to the community is through Arizona Low Income and Disabled/Displaced corporate tax credits. Funds come from your corporation’s Arizona state tax liability, meaning that you don’t have to spend a single extra penny in order to make a difference.
By directing your tax dollars to Catholic Education Arizona, you’ll help children receive a high-quality Catholic education at a school that is best suited to meet their individual needs. Let’s take a look at some of the most common questions and answers about how this process works.
How do you use a corporation’s state tax credit?
All of the funds CEA receives from the Corporate Low Income Tax Credit are awarded as tuition scholarships for underserved children in the community. Federal Poverty Level income guidelines determine eligibility to receive these scholarships. Disabled/Displaced scholarships are awarded to students with IEPs, 504 plans, METs, if they have been in foster care in Arizona, and if their parents are active-duty military. CEA funds these scholarships for 37 Catholic schools within the Diocese of Phoenix, Boys Hope Girls Hope of Arizona and St. Michael’s Indian School, and you may choose which school receives your tax credit contribution. Although your tax credit contribution is made to CEA, the children who receive the scholarships do not need to be Catholic, just enrolled in a Catholic school that CEA serves.
How much of my tax liability can I direct to CEA?
By state law, you can direct the entirety of your corporate state tax liability to CEA, which is then distributed to the schools. School Tuition Organizations (STOs), such as CEA, can receive contributions from corporations that range between $5,000 to $2 million or more.However, the state of Arizona sets a statewide cap each year that limits the amount of corporate state tax funding that may be distributed to private schools through STOs. If the statewide cap has been met, you ae unable to direct your tax liability to CEA that year. For FY21 (2020 Corporate Taxes), the annual statewide cap is $128,391,848.
How do I know if my company qualifies?
C-Corps, S-Corps, LLCs filing as an S-Corp or C-Corp, and insurance companies that collect premiums qualify to take the Arizona Low-Income or Disabled/Displaced Tax Credits If you have any doubts as to whether you qualify, check with your CPA.
How do I apply and is there a deadline for applying
CEA accepts commitments for directing corporate tax credits year-round as long as there are funds remaining in “cap” set by the state. The opening day for application submission is July 1st, so commitments should be made no later than June 30th. Simply complete the Corporate Tax Credit Commitment Form, which you can find at www.ceaz.org/corporate, and submit it to CEA. Applications are submitted by CEA to the Arizona Department of Revenue. Upon approval from the ADOR, corporations have 20 days to make their payment to CEA. A tax receipt is provided immediately following the process of payment.
By directing your state corporate income tax liability to an STO, you can help local children get the high-quality Catholic education they deserve. To learn more about becoming a corporate partner with CEA and creating future leaders through tax credits, visit www.ceaz.org or call us at 602 218-6542.