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The Arizona Private School Tuition Tax Credit

The Arizona tax credit and scholarship program is a wonderful and important way for parents, family and friends to support Montessori International School. Tax credit funds will go directly to a child in financial need to cover tuition costs for them to attend M.I.S. The best part is that it does not cost you any more money than you are already paying on state taxes. That’s right, you can help M.I.S. and it costs you nothing. It allows you to direct your tax money to education.

The tax credit may prove to be the most significant educational reform in Arizona’s history. Research and experience show that the most important education a child receives is in elementary and secondary school. In directing your tax credit dollars towards a child’s education, you’re helping to alleviate our overcrowded public schools, create greater educational opportunities for all children, create healthy competition among schools and save the State’s precious resources. This is a private voluntary method of funding for our schools, and by design, prevents government meddling, commonly associated with publicly funded vouchers. Ideally, we would like all families of toddler, primary and elementary students along with family members, grandparents and friends to participate. Remember it costs you nothing.

What is it?

In 1997, the Arizona legislature passed the “Private School Tuition Tax Credit” (A.R.S. 43-1089). The law allows any taxpayer in Arizona to claim a dollar-for-dollar tax credit of up to $1000 (see limits below) for making a voluntary contribution to any scholarship funding organization in Arizona that allocates at least 90% of its annual revenues for K-12 scholarships, allowing children to attend the non-governmental school of their parent’s choice. Montessori International School and Tempe Montessori School are a part of TEMPO – Tempe Montessori Parents Organization (which is a 501 C3 organization).

What is a tax credit?

A tax credit reduces your Arizona taxes dollar-for-dollar (up to the limit). A.R.S. 43-1089 provides a credit against your Arizona Income tax obligation of up to $1000 for married couples filing joint returns or $500 for single and head of household filers.

How does a tax credit differ from a tax deduction?

A tax credit reduces your Arizona taxes dollar-for-dollar (up to the limit). A.R.S. 43-1089 provides a credit against your Arizona Income tax obligation of up to $1000 for married couples filing joint returns or $500 for single and head of household filers.

May I claim both a tax deduction and a tax credit?

If you claim the Arizona tax credit, you cannot also claim a deduction on your Arizona form. (But that’s OK because the credit is better than a deduction and the credit gives you your contribution back). However, you may be able to claim an itemized deduction for the tax credit donation on your Federal tax return. Please consult your tax advisor.

Who can give?

Participants must be Arizona taxpayers with an Arizona State tax liability. (That means you owe state tax and probably have withholdings).

How much can I give?

The credit is dollar-for-dollar up to the limit of your state tax liability. If your tax liability is under the limit ($1000/500), you may send a smaller amount. You may give any amount up to $500 if you are filing as Single/Head of Household and up to $1000 for Married filing jointly. Married filing separately - each spouse may claim half of the $1000 credit.

Who receives?

Parents of a child who is at least 5 years old in financial need will fill out a financial aid application. If they are approved, they will receive funds based on the amount of their scholarship and tuition amount.

How to give

Complete Montessori International School’s contribution form. Make your checks payable to TEMPO (Tempe Montessori Parents Organization). Mail your form and check to the address on the form. All contributions must be post-marked by December 31st of this year. Your check will be deposited by the first of the year. You will receive a receipt to file with your Arizona State Income Tax Return Form 323. Remember the deadline is December 31st.

How do I claim my tax credit?

File Arizona Form 323 with your State taxes. Remember, the tax credit will benefit you only to the extent that you incur an income tax liability.

Questions?

Call Montessori International School at (480) 890-1580

*This information is not intended to provide tax or legal advice. Please consult the Arizona Department of Revenue, the IRS or a tax advisor for specific guidance.

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