Want to support a local school or charity instead of paying taxes?
Through Credit for Kids and another charitable tax deduction program, single taxpayers can contribute up to $200 to schools or an eligible charity, and then deduct the money from their state taxes. For married, joint-filers, the maximum credit increases to $400.
Taxpayers essentially pay nothing since they would pay the taxes anyway. The program allows people to choose how their money is spent — instead of writing a check to the state, taxpayers write a check to a school or eligible charity of their choice.
“The good thing about Credit for Kids is even in a recession, people are still going to pay taxes,” said Payson Unified School District Superintendent Casey O’Brien.
Last year, taxpayers contributed $288,500 to Payson schools. This year’s goal is $300,000. Private schools are also eligible.
“People can send it anywhere they want,” said Susan Campbell a receptionist for the district. Options include the fine arts fund, designating a specific school, or the stadium project.
Donations are payable by check or by credit card on the district’s Web site and must be received by Dec. 31. For tax credits to eligible charitable organizations, taxpayers must choose a qualifying charity. Local qualifying charities are Payson Area Habitat for Humanity and the Payson Christian Clinic. A statewide list is available on the Arizona Department of Revenue Web site.
“It’s a way of designating your dollars and getting the tax write-off at the same time,” said Cristine Royer, Payson’s Habitat for Humanity executive director. Habitat’s goal this year is $60,000 from 100 donors. In past years, anywhere from 45 to 60 donors have participated.
The difference between a traditional 501(c)(3) tax-deductible donation — the tax designation for nonprofits — and this program is that only 25 percent of each dollar for traditional donations can be written off, Royer said.
Restrictions apply for qualifying charitable donations. Taxpayers must have deducted an itemized charitable donation, for any nonprofit, in 1996 or later. The first year a charitable deduction was made creates the baseline amount. Total charitable contributions this tax year must exceed the baseline amount. If the baseline amount is exceeded, taxpayers can receive a dollar-for-dollar tax credit with donations to eligible charities. The restriction does not apply to Credit for Kids.