1. AZ Tax Credit Scholarship Information
Arizona Tax Credit Power Point Presentation
Prepared for St. Augustine Catholic High School
By Stacy DeLong
Thank you for coming.
Tonight, I will be giving you a power point presentation about the tax credit scholarship program.
Lupita has given you handouts. Please jot down any questions you may have as I go through about your specific situation so that we can discuss afterwards.

2. 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
The Tax Credit law has been in effect since 1989?
But, I’ve found that most people haven’t heard of it, and don’t really understand how it works.
So, Lupita and I decided to provide this informational evening to give you a basic understanding.
We also wanted you to meet some of the people that work tirelessly on your behalf to implement the law.

3. Catholic Education is Affordable!
Because of this Tax Credit Law, Catholic Education is more affordable than most people think.
Educate yourself on 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-yet less than 3% of Arizonans contribute each year!

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

5. 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.
Individual
Plus
Corporate
D/D
Some people qualify for all 4.
Some only qualify for the Individual
Sometimes your eligibility changes year to year.

6. Four Types of Scholarships:
Original, Individual, FNB: Financial Need Based
Switcher, Plus, Overflow
Corporate-low income
Disabled/Displaced or D/D
Some STO’s call them different names!

7. 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!
Basically, EVERYONE enrolled in a Private school in Arizona is eligible for this one!!
Handouts of these slides to take home with you and keep in your file!
Many parents have told me they don’t think they qualify, but all families with children in a private school are eligible for at least the Individual award.

8. 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 received 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. Also if you moved here from out-of-state you will not qualify for a Switcher this year.
This is important, that your eligibility may change year to year.
If you are transferring from a public school, make sure you supply the correct paperwork and are awarded this Plus scholarship your first year in a private school.
And then, be sure you apply for it again year after year.

9. 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.
To receive the Corporate scholarship, you have to meet the income requirement first.
If you go over the income allowed for the number of people in your household, even if you’ve received a Corporate award in the prior year, you cannot receive it this year.
If next year, your income is down again below the limit, because you received a corporate in a prior year, you would then again be eligible.
Do you see how important it is to understand how you can qualify?

10. Disabled/Displaced Scholarship (aka: D/D):
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.
(Students can potentially receive nearly half their tuition by this scholarship category alone!)
Individualized Education Plan

11. How do I know what I’ve received in the past?
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!
If you didn’t keep a copy, you will have to send a form to your prior STO to fill out as proof of award.
If you’re not sure, ask!

12. 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.
What you qualify for each year could potentially change each year!

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

14. TWO 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!

15. But the good news is:
You can donate to an STO and designate a school which your child attends, and then apply to that STO and receive 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. (more about this later)

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

17. 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.

18. Who Funds what Scholarships?
Individuals Can Donate to:
Individual and Plus
Categories
Corporations Can Donate to:
Corporate and D/D
Categories

19. Dollar amount Maximums that can be donated each year:
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)

20. 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)

21. Example of how donation works to receive Tax Credit:
Calculate your AZ State Tax:
Income less Deductions: Amount you owe:
Single Married
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.)
If you work in the state of Arizona, you will likely owe them taxes.

22. Example of how donation works to receive Tax Credit:
This time you Made a Tax Credit Donation:
Tax Liability: Single Married
(Amount you owe) $600 $2,000
Individual Donation $545 $1,090
Plus Donation $ 55 (total $600) $ ($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

23. 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”.

24. Why Donate: When you donate two things happen!
Our scholarship pools increase so more money is available for scholarships to all our students!
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 make a donation to an STO, out of pocket, but you will get it back when you file your taxes.
There are tips in how to handle the cash flow aspect in the timing of your donation and using a credit card.
Of even filing your Federal taxes first, if you get a refund, wait to file your AZ taxes until you get your refund,
Then pay the STO, then file your AZ taxes, then get reimbursed with your AZ tax refund!

25. 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.

26. Two Exceptions to the Rule:
The AAA scholarship, is a Corporate type of tax-credit scholarship.
However: They have a policy that if you accept their scholarship ($6,600 for high school next year), you CANNOT accept any other tax credit scholarship.
Which means: You will have to personally cover the balance of tuition remaining due. ($8,775-$6,600=$2,175)
You might want to consider declining the AAA scholarship once you get to St. A’s and applying to the other tax credit organizations to receive more tax-credit scholarship money.

27. The other exception: ESA
ESA: Empowerment Scholarship Award
This is NOT a “tax-credit” scholarship
If you receive this scholarship, you CANNOT accept a tax-credit scholarship.
Unfortunately, most ESA scholarships in high school only give $5,500 on average. (This will leave you $3,275 short to pay the remaining balance of tuition)
It is suggested that you consider transferring out of the ESA when you come to St. A’s, unless you can cover the balance of tuition owed ($ per month for 10 months).

28. 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.

29. We work with 12 different STO’s and ESA here at St. A’s:
You will be provided with a list of the STO’s we work with.
Check to see who is on the list that your student has already received an award from this past year. Plan to apply to them again for next year. You are already in their system!
Look at the description of the others you haven’t applied to before, determine if you will qualify under their guidelines. If so, plan to apply to them for next year. Ask if you aren’t sure.
Know that most students that are eligible receive as much as 80% of the cost of tuition here. Many receive more by applying to 3-5 STO’s. But, you have to know which you qualify for.
The balance can be gotten by finding donors to recommend your student. Being proactive in asking will help you.

30. 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).