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Receiving Credit Where Credit is Due

Now that many of you have had a chance to begin settling into the routine of having your children back in school, it might be time to take a minute or two and look at all of those forms you received at registration. While I am going to address parents whose children are in public or charter schools to begin with, there will be information for those of you who don’t have children in school as well.

Okay, public or charter school parents, let’s take a closer look at all of those forms.

Chances are if your student is in middle or high school, there are some Arizona income tax credits lurking in your paperwork. Arizona requires schools to issue receipts that have the school information as well as what the fee or program for which the fees are collected. The Fees Paid to Public Schools Credit can be taken for the following expenses: extracurricular activities, character education programs, standardized testing fees for college credit or readiness offered by a widely recognized and accepted educational testing organization, preparation courses and materials for standardized testing, the career and technical education industry education industry certification assessment and cardiopulmonary resuscitation training pursuant to A.R.S. § 15-718.01.

Many of these are evident as to what they are, but there are a few wrinkles in here. For instance, fees for the SAT or ACT college entrance exams count, but only if you paid them through the public school. If you pay a fee to the testing agency, it’s no longer available. A.R.S. § 15-718.01 requires schools to begin teaching CPR to high school students by 2019. Any fees charged to the student as a result of this training will count as a fee paid to a public school. Remember, pay it directly to the school and obtain your receipt.

The credit is limited to $200 for individuals and $400 for a married couple filing jointly and can be paid up until the due date of your tax return (generally April 15 to claim for the prior year).

Although this credit is non-refundable, it is used to offset any Arizona tax liability and can be carried forward if you are not able to benefit from the entire amount. Being able to offset your Arizona state tax liability is the best part of these credits. As an example, if you are married and normally have a $500 tax liability – that is total tax before your payments – you could donate the money to a public school, whether or not you have children, and it reduces your tax liability to $100. You could look at it as you get to tell the state exactly how to spend that $400: send it to your school of choice.

If you are trying to find a good program to direct your $200, $400 or any other amount, I happen to know that the Flagstaff High School Band has an upcoming “tour” where the students participate in clinical sessions to improve their musical skills. They have a few other opportunities during these tours to play with a variety of musicians that also prepare them for state competitions in late spring. If you haven’t already used your credit, visit the office at Flagstaff High School, tell them you want to donate to tax credit for Band Tour and don’t forget your receipt. The band kids, and your Arizona tax return, will thank you for it. FBN

By Patrick Fleming, EA

Patrick Fleming, EA is a partner with Northern AZ Financial Services Co. For more information, visit

northernazfinancial.com or call 928-526-3999. 

 

 

 

 

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