Q: What is a Working Poor Tax Credit?
A: The Working Poor Tax Credit is a credit given to a single donor who contributes up to $200, or a married couple who contributes up to $400 to a 501(c) (3) organization. These amounts are the maximum you can qualify to receive, even if you donate to several organizations. A tax credit is unlike a deduction in that a deduction reduces the taxable income upon which your tax liability is calculated and a credit is a dollar-for-dollar reduction in your taxes.
Q: How does an organization become a “qualifying charitable organization”?
A: A 501(c) (3) (non profit) organization can become a Qualifying Charitable Organization by using at least 50% of their budget to provide services to the working poor. These services meet the basic needs of the working poor like food, clothing, shelter, etc.
Q: Is the Working Poor Tax Credit a state and a federal tax credit?
A: No. The amount you donate (up to $200 for a single individual or $400 for a married couple) only qualifies for the Working Poor Tax Credit on your state return. Consult your accountant for ways in which your donation could also be applied as a deduction on your federal tax return.
Q: How do I qualify and make a claim for the Working Poor Tax Credit?
A: Making a cash donation to Wingspan and providing an itemized list of deductions with your Arizona state tax return will qualify you for this credit. In-kind donation(s) will not qualify you for this credit.
Q: Can I qualify for this credit if I donate through a Workplace Giving program?
A: Yes. If you donate through a payroll deduction system in your workplace, you qualify for this credit.
Q: How do I know which organizations I support qualify for this tax credit?
A: For a complete list of Qualifying Charitable Organizations please follow this link http://www.azdor.gov/LinkClick.aspx?fileticket=bCY0OeFUN1Q%3d&tabid=242