Turn Your Corporate Tax Dollars Into Scholarships at No Net Cost

Invest in Arizona education to inspire future generations.

Please join the esteemed community of business leaders who are making a difference in the lives of Arizona's children by enriching educational opportunities with their redirected state tax dollars!

Arizona Department of Revenue (ADOR) starts FY 2023-2024 approvals on July 3rd, with $158M Cap for Low-Income and $6M for Disabled/Displaced Programs.

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Benefits of Redirecting Your Tax Dollars

No net or out-of-pocket cost to you or your corporation

Your company will receive a dollar-for-dollar tax credit

You can pass the tax credit to shareholders

Immediate reduction in your corporate income taxes

Boost your community image as a corporate "good citizen"

You benefit and aid K-12 students and schools in Arizona

How Corporate Tax Credit Works?

Quick Overview

Corporate Tax Credit

Invest in children at NO NET COST to you or your company! 

The state of Arizona allows eligible businesses to allocate their tax liabilities and receive a dollar-for-dollar tax credit for up to 100% of their Arizona state tax liabilities.  Simply redirect money that you would otherwise be paying in state income taxes and provide scholarships for Arizona K-12 students with verified finical needs.  This is not a donation but a dollar-for-dollar tax credit. To participate, the company does not have to be based in Arizona, provided it pays Arizona tax liability. This is truly a Win-Win for you and Arizona students. Here you can  fill out the form to participate.

 

Corporate Tax Credit History & Facts: (A.R.S.§20-224.06 and § 43-1183)

In 2006 and then in 2008, the Arizona State Legislature passed into law “The Corporate Income Tax Credit” and then the Disabled/Displaced Corporate Income Tax Credit, allowing businesses with an Arizona tax liability to allocate up to 100% of their tax liability and make a contribution to a qualified School Tuition Organization such as STO4KIDZ, and receive a dollar-for-dollar Tax Credit, may also qualify to claim that amount on their federal taxes as a donation.

 

Eligible Corporations:

  • C- Corporations
  • S- Corporations and LLC’s filing as an S-Corporation
  • Insurance Companies that pay premium taxes in Arizona
  • The company does not have to be based in Arizona, provided it pays Arizona tax liability.  

 

Two Corporate Tax Credit Programs:

  • Low-Income Corporate Tax Credit Program (A.R.S. § 43-1183)
  • Disabled/Displaced Corporate Tax Credit Program (A.R.S. § 43-1184)

 

Who Will Benefit From The Corporate Tax Credit:

  •  K-12 students with a demonstrated financial need
  • Preschool–12 students with disabilities
  • Kindergarten students with demonstrated financial need
  • Foster students
  • US Armed Forces dependent
  • Students transferring from a public or charter school with demonstrated financial need
  • Students previously received Corporate or Switcher scholarships with demonstrated financial need

 

HOW TO PROCEED:

First:

1) Determine your business tax liability for the current year. You can allocate the total corporate tax liability amount.

2) Complete and submit your application by visiting STO4KIDZ.ORG  or call for assistance at 480.823.8052.

 

Then:

1) STO4KIDZ will submit a Tax Credit Contribution Approval Request to the Arizona Department of Revenue (ADOR) on behalf of your company. (Applications must be submitted by an STO)

2) The request will be approved if the state cap has not yet been met. If the cap has been met, ADOR will create a waitlist based on the order in which the requests are received.

3)  STO4KIDZ will notify you the same day ADOR informs us of the approval. Corporation has 20 calendar days to fund STO4KIDZ in order to keep the tax credit.

4) Once STO4KIDZ receives the contribution funds ADOR will be notified and STO4KIDZ will provide the company with a receipt to claim the tax credit.

5) When filing the company’s taxes, you will take the corporate income tax credit on the Standard 120 Form and file a 335 Form, listing the credit amount.                                           

6)   STO4KIDZ awards tuition scholarships to qualifying students.

  Corporate Tax Credit Fact-Sheet  I  Tax Credit Law

  • We are impacting our communities (Read more here)
  • Immediate reduction in your corporate income taxes
  • No out-of-pocket cost to you or your corporation.
  • Can allocate up to 100% of your corporate state income tax liabilities.
  • Receive a dollar-for-dollar tax credit.
  • You may also qualify to claim your contribution on your federal taxes as a donation to STO4KIDZ, a 501c3 non-profit charitable organization.
  • You benefit and aid K-12 students and schools in Arizona.
  • Boost your community image as a corporate “good citizen”.
  • Provide need-base financial aid to eligible K-12 Arizona private school students, and impact their future, today.
  • STO4KIDZ in turn awards a minimum 90% of every dollar in tuition financial aid to eligible AZ private school students with verified financial needs within the same school calendar year.

(Please consult your tax advisor) http://www.azdor.gov/TaxCredits/CorporateTuitionTaxCredits.

  • C-Corporations
  • S-Corporations & LLCs that file as an S-Corp
  • Insurance Companies that pay premium taxes in Arizona

 

C-Corporations can allocate up to 100% of their state income tax liabilities for the given tax year as long as it does not exceed the statewide cap for the year. Credit can be carried forward for up to 5 years.

 

S-Corporations, (as defined in section 1361 of the Internal Revenue Code) can either claim the credit against income taxes at the corporate level (income tax reported on an Arizona 120S corporate income tax return) or it may make an irrevocable election to pass the credit through to its individual shareholders.  The S-Corp must make a minimum aggregate contribution of $5,000 within their taxable year in order to pass the credit through to its shareholders and may allocate up to 100% of their state income tax liability for the given tax year, receive a dollar-for-dollar tax credit; then pass the credit on to its shareholders proportionately. If a corporation allocates more than their tax liability, it can be carried forward for up to 5 years. The contribution must be made by the S-corp, not a shareholder, in order to be eligible for the corporate tax credit. Each individual shareholder may claim only a pro-rata share of the credit based on the individual’s ownership interest in the S-corp. (A.R.S. § 43-1089.04).

 

LLCs that are taxed as S-corporations for federal and state purposes are eligible to contribute for tax credit.

 

Insurance companies that pay Arizona state tax liability on their premium income can allocate up to 100% of their premium tax liabilities.

  • A credit is allowed against the premium tax liability incurred by an insurer pursuant to section 20-224, 20-837, 20-1010, 20-1060, or 20-1097.07 for the amount of voluntary cash contributions made by the insurer during the tax year to a school tuition organization.
  • The amount of the credit is the total amount of the insurer’s contributions for the tax year under subsection A of this section that is pre-approved by the department of revenue pursuant to section 43-1183, subsection D.

 

(Use tax form 335 to claim your credit)

No. Corporations can only claim their contribution in the tax year in which the contribution is made (plus, five years for carry forward purposes). The law allows your corporation to allocate your tax liability to a School Tuition Organization (STO) such as STO4KIDZ, designating a private school, not a specific student. However, if there are not enough eligible students at your designated school, the money will be awarded among eligible students attending other qualifying private schools in Arizona.

  • K-12 Students with a demonstrated financial need
  • Pre-K–12 Students with Disabilities
  • Kindergarten Students with a demonstrated financial need
  • US Armed Forces Dependents
  • Foster Children
  • Students Transferring from a Public or Charter School with a demonstrated financial need
  • Previous Corporate or Switcher Scholarship Recipients with a demonstrated financial need

When filing your CORPORATE taxes, you can claim your tax credit by using the Arizona tax form 335 or 355i. These forms and more can be found at AZDOR.GOV

FACT-SHEET (an overview of the Corporate Tuition Tax Credit program)

STO4KIDZ awards a minimum of ninety percent of every contribution in scholarships to eligible Arizona K-12 students twice a year, at the beginning of each semester.

We sincerely welcome and appreciate your support and participation in this most worthwhile program.

Information below might be helpful:

** Every July, the state opens the window for corporate tax credit applications  submitted by STOs on a specified date. Typically, the cap is reached within the first few minutes.

** If the state cap is not reached on the opening date in July, STO4KIDZ can continue submitting corporate tax credit applications for approval until the cap is reached by or before June 30th of the following year.

** As each company's tax filing year may differ, we recommend our donors consult with their tax advisors to confirm eligibility for the credit in their current tax year. Note that the tax credit can be carried over for up to 5 years.

 

First:

1) Determine your business tax liability for the current year. You can allocate  the total corporate tax liability amount. To participate, the company does not have to be based in Arizona, provided it pays Arizona tax liability.

2) Complete and submit your non-binding contribution pledge form Online , or call Miriam at 480.823.8052 for assistance.

 

Then:

1) STO4KIDZ will submit a Tax Credit Contribution Pre-approval Request on behalf of your company to the Arizona Department of Revenue (ADOR).

2) The request will be approved if the state cap has not yet been met. If the cap has been met, ADOR will  create a waitlist based on the order the requests are received.

3) STO4KIDZ will notify you the same day ADOR inform us of the approval. Corporation has 20 calendar days to fund STO4KIDZ in order to keep the tax credit.

4) Once STO4KIDZ receives the contribution funds ADOR will be notified and STO4KIDZ will provide the company a receipt to claim the tax credit.

5) When filing the company’s taxes, you will take the corporate income tax credit on the Standard 120 Form and file a 335 Form, listing the credit amount (335-I / Instruction or 335/ Instruction.) For additional information select here.

6) STO4KIDZ awards tuition scholarships to qualifying students.

 

If you have questions, please contact Miriam Antolik at 480.823.8052  -  602.698.8855 OR  Email us.

We sincerely welcome and appreciate your support and participation in this most worthwhile program at no out-of-pocket cost to you.

Empower the future through educational investment

Redirect your corporation’s tax liabilities to the students that will soon enter the workforce. Better education and training fuel innovation, investment, and economic diversification. High-quality education is essential to equipping our children with the tools they need to make a difference in our society and businesses. By investing in the education of Arizona’s youth, we protect the future of our economy.

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The minimum contribution amount is $5,000 for S-corporations or LLC's that file as an S-corp. There is no minimum amount for C-corporations or Insurance companies.

For fiscal year 2023-2024 the Low-Income Statewide Cap is $158M, and the Disabled/Displaced Cap is $6M.

Your company may recommend one or more schools to benefit from its contribution but not a specific student. STO4KIDZ works with all Arizona qualified private schools.

Corporations can designate their contribution to either the Low-Income Corporate Scholarship Program A.R.S. 43-1183 and/or the Disabled/Displaced Corporate Scholarship Program A.R.S. 43-1184.

Your corporation may carry forward any unused tax credits for up to 5 years.

To participate, your company does not have to be based in Arizona, provided it pays Arizona tax liability.

No cap on a corporate contribution amount, up to the annual statewide tax credit cap.

The state accepts applications on a first-come-first-served basis beginning the first week of July until the statewide cap is met. If the cap is not met in July, the state will open additional approval cycles based on the credit limit available. STO4KIDZ will continue to accept corporate tax credit Contribution Requests Forms until the annual cap is met.

The contribution must be made to a School Tuition Organization (STO). STO4KIDZ is licensed and approved by the Arizona Department of Revenue (ADOR) and IRS as a 501c3 non-profit charitable organization.

Applications must be submitted to STO4KIDZ by June 30 for the first text credit round of each year.

BENEFITS TO YOUR EMPLOYEES!

You can offer your employees the opportunity to support tuition scholarships through STO4KIDZ by redirecting their state withholding taxes via Payroll Withholdings, without impacting their take-home paychecks (A.R.S. 43-401)

For more information about this program, please visit our Withholding page or contact us

We greatly appreciate and welcome your support of Arizona children.

APPLY NOW