Many families don’t realize that a private school education in Arizona can be very affordable. Tax credit scholarship programs give families with limited financial means the ability to enroll their children in the private school that works for their child and meets their unique needs.
Here’s how it works. First, there are FOUR different tax credit opportunities currently available to Arizona taxpayers that encourage them to donate to a certified School Tuition Organization (STO). Each tax credit has different qualifications and ways of distributing funds, which we discuss below. STOs provide scholarships for students enrolled in Arizona private schools.
Children may qualify for one, or even all four programs . See the complete list of approved Arizona School Tuition Organizations here.
OPTIONS 1 & 2: INDIVIDUAL TAX CREDIT + SWITCHER
The Original Individual Income Tax Credit Scholarship Program allows any Arizona taxpayer to redirect a portion or all of their state tax liability to a School Tuition Organization (STO) and receive a 100% dollar-for-dollar tax credit for their contribution. STOs are non-profit organizations that are certified to receive the tax credit contributions and in turn are able to provide scholarships to Arizona students.
This is a dollar-for-dollar tax credit, costing the taxpayer nothing to contribute. This is simply an opportunity to redirect the money that they would be paying anyway. For Tax Year 2022 a married couple filing jointly can claim a maximum credit of up to $2,483, a single taxpayer up to $1,243, or their total tax liability—whichever is less.
Many STOs even allow donors to these two programs to specify a student name or private school that they would like to assist with their contribution. Donors may not specify their own child or a dependent for assistance nor coordinate with another donor to sponsor each other’s child or dependent.
All Arizona children qualify for this scholarship program!
OPTION 3: CORPORATE TAX CREDIT
The Corporate Tuition Tax Credit Program allows S type Arizona businesses to offset shareholders’ state tax liability with donations to an STO. Corporations may recommend one or more schools to receive its donation, but cannot recommend a student.
The Corporate Tuition Tax Credit Program raised over $106M dollars this year and provides scholarships specifically for students in middle and lower-middle income households.
OPTION 4: LEXIE’S LAW
Similar to the Corporate Tuition Tax Credit above, Lexie’s Law or the Disabled and Displaced Tuition Tax Credit Program allows S type Arizona businesses to pass through a tax credit to shareholders against a portion or all of their state corporate tax liability by donating to an STO.
This option serves special needs students in preschool through 12th grade. Additionally, students (K-12) who have been in the Arizona foster care system are also eligible.
Thousands of Arizona children are benefiting from Arizona’s tuition tax credit programs as they attend the private school that works for them.
You can learn more and find out how to apply for these scholarships by contacting Love Your School via email at [email protected]!