AZ Tax Credit Scholarship Information Arizona Tax Credit Power Point Presentation Prepared for St. Augustine Catholic High School By Stacy DeLong

AZ Tax Credit Scholarships What it is- An Arizona Law which allows tax money to be used for private school tuition. Why it is important to Parents in Private School -Tax Credit Scholarships help fund over 50% of the families that are enrolled in private schools in Arizona Where the Money Comes From- Contributions by Arizona Taxpayers and Contributions by Arizona Corporations

Catholic Education is Affordable! Because of this Tax Credit Law, Catholic Education is more affordable than most people think. Educate yourself how the Tax Credit law works. AZ is one of few states in the country that has this type of program. It has been in effect since 1989.

Two Parts to the Tax Credit Law 1. Who donates the money for Scholarships? 1. Individuals like you and me 2. Corporations 2. Who is eligible to receive scholarships? 1. Students in Private Education in AZ (Yes, there are tax credits for public schools too!)

Four Types of Scholarships: 1. 1) Original, Individual, FNB: Financial Need Based 2. 2) Switcher, Plus, Overflow 3. 3) Corporate 4. 4) Disabled/Displaced or D/D Some STO’s call them different names!

So, How do You Qualify for and Receive Scholarships? Answer: You have to learn how you qualify and which scholarships you are eligible to receive. 1. Individual 2. Plus 3. Corporate 4. D/D

Original/Individual Qualifiers: 1) Your student must be enrolled in a private school (K-12). 2) You will need to apply ANNUALLY to receive a scholarship. 3) Some STO’s have income limits 4) If you don’t apply, you won’t receive anything!

Switcher/Plus/Overflow: 1) Have transferred from a public school to a private school in the current year. –OR- 2) Received a Switcher scholarship last year, or a Corporate scholarship last year. Note: If you ONLY received an Individual scholarship last year and no prior Corporate or Switcher scholarship, this does NOT qualify you for a Switcher scholarship.

Corporate Scholarship: 1) Income MUST be below the income cap, (typically 185% of the Free/Reduced Lunch Federal Guideline) Check each STO for #’s -AND- 2) You must have received either an Individual, Switcher, Corporate, or D/D scholarship in a prior year, -OR- you transferred from an Arizona Public School in the past year.

Disabled/Displaced Scholarship: 1) Your student has an IEP, an MET, or a 504 plan –OR- 2) Your student has gone through the Arizona foster system at any point in their life. (case # required) 3) There is no income cap, but you must report your income to the STO.

Which ones do I qualify for? When you are awarded, the STO will send you official notification and will list what category of scholarship they are awarding you. KEEP THIS!! TIP #1: Keep a File of all your scholarship applications and award notices each year! Every time you apply to a new STO that you’ve not received an award from in the past, you have to provide documentation that you qualify. A notification from the prior award STO will satisfy this requirement, especially a Plus or Corporate award. NOTE: The school does not receive a copy of this notification!

Every STO is not the Same!! Learn what the STO offers before you apply. Some STO’s only offer Corporate and D/D If you don’t qualify for Corporate or D/D then you don’t want to spend time filling out an application, only to be denied! Know if you qualify for Plus: This can potentially change each year!

Where does the money to fund the scholarships come from? The state allows donors to designate (recommend/refer) that their donations go to: 1. The school of your choice 2. A student of your choice NOTE: You can even split your money between schools and/or students!

Important Rules to Note: You, as a parent, cannot donate and recommend the money goes directly to your own student. You, as a parent, cannot swap donations with another parent for their child and they for yours. THESE ARE SPECIFICALLY STATED IN THE LAW!

Also of Note: You can donate to an STO and designate a school which your child attends, and then apply to that STO for a scholarship from them. Family, friends, co-workers can all donate and designate your student. It’s important you know if you get Plus if they donate more than the Individual portion. (read more about this later)

Who do you Donate to? Any one of the many State Scholarship Tax-Credit Organizations (STO’s) that offer Individual and Plus scholarships See List on School Website of STO’s we work with here at the school See Ms. DeLong if you have questions If you know of potential Corporate donors, let us know-they donate differently!

Importance of Understanding Which Type of Scholarship you can Receive each year: You have to provide documentation to any new STO you apply to of prior awards you’ve received or if you came from a public school. This is how you and they will know what type of scholarship you are eligible to receive. So keep your scholarship notification letters or s year to year. Print them out or save them as a document on your computer and keep them throughout your student’s school career.

4 Categories of Scholarships Individuals Can Donate to: Individual and Plus Categories Corporations Can Donate to: Corporate and D/D Categories

4 Categories of Scholarships Individuals Donate Individual and Plus In 2016, Donors can give up to: Single: $1,087 Married: $2,173 (filing jointly) (Numbers go up yearly) Corporations Donate Corporate and D/D Corporations have to apply for approval to be able to donate 2016: $51,597,804 cap 2015: $42, cap 2014: $35,831,808 cap (Cap met in a week this year)

Individuals (AZ Tax Payers) Can Donate in 2016 to STO’s and receive a dollar for dollar tax credit: Individual and Plus Categories: Single: $1,087 maximum is split: first $545 to Individual and then remaining $542 to Plus Married: $2,173 maximum is split: first $1,090 to Individual and then remaining $1,083 to Plus (You don’t have to contribute the full amount)

Example of how donation works to receive Tax Credit: Calculate your AZ State Tax: Income less Deductions: Amount you owe: SingleMarried Tax Liability: $600$2,000 Employer Pd Tax: $1,000$3,000 Net Refund: $400$1,000 (Typical Case if your employer paid enough in for you! Check with your tax accountant for specifics in your situation.)

Example of how donation works to receive Tax Credit: This time you Made a Tax Credit Donation: Tax Liability: SingleMarried (Amount you owe) $600$2,000 Individual Donation$545$1,090 Plus Donation$ 55 (total $600)$ 910 ($2000) Net Tax Liability:$0$0 Employer Pd Tax: $1,000$3,000 Net Refund:$1,000$3,000 (You get back your normal refund and your tax-credit donation!) Single: $600 donation + $400 normal refund = $1,000 Married: $2,000 donation + $1,000 normal refund = $3,000

Common Misconception: Many people incorrectly think their donation comes after or based upon their “refund amount”. The tax credit is a dollar-for-dollar reduction of your “Tax Liability” owed to the state of Arizona. You can also use the deduction as a Federal “charitable contribution”.

Why Donate: When you donate two things happen! 1. Our scholarship pools increase so more money is available for scholarships to all our students! 2. You can tell the state where you want your tax dollars to be spent: On private school education, in this case! Bonus, it doesn’t cost you anything more!

Yes, You have to pay the STO directly to make your donation, not the school: You can pay the STO with check or credit card when making payments. You have until April 15 or when you file your AZ Taxes to make your donation. The STO will give you the tax paperwork you will need to complete your taxes.

If you have Questions: Please ASK! There may be exceptions to the rule, and your circumstances may be unique. When in doubt, call Ms. DeLong in the finance office, or call the STO directly with your questions. Understanding these rules will help you receive the most scholarship awards available to you and your student.

Thank you! Thank you for taking the time to learn more about the tax credit scholarship program. The more you learn what you are eligible for, the more awards you can receive for your student(s).