FREQUENTLY ASKED QUESTIONS
Individual Tax Credit Contribution
STO4KIDZ accepts contributions throughout the year. Contributions must be made prior to filing your taxes but no later than April 15.
Most people pay state income taxes unless they have no earned income or are taking a loss. Even if you get a refund, you've still paid taxes. Your liability is the total you’d owe without any payments made during the year. If you have no tax liability, you can't get the credit. (ARS 43-1089 & ARS 43-1089.03)
The best way to estimate your income tax liability is to ask your tax advisor. If you don’t have one, check last year’s return to see your income tax liability: Line 48 on your Arizona Form 140, Line 58 on Forms 140PY (Part Year Resident) and Arizona 140NR (Non-Resident) forms. If your income is similar, your liability should be too.
Online Tax Estimator
Here is a free online tax estimator to calculate your tax liability. Please be aware that this tool is developed and maintained by an independent third party, and STO4KIDZ does not review or guarantee the accuracy of its content.
When you are filing your taxes, you can claim the tax credit by using the Arizona forms 301 and 323 along with state income tax forms. However, if you contribute to the Switcher program, you also need to file a 348 form. Also, use AZ Schedule A to claim the federal deduction. All these forms and more can be found at azdor.gov.
2020 Arizona Tax Forms: Instruction
Form 301 (Tax Credit Summary) PDF
Form 323 (Original Tax Credit) PDF
Yes! You may recommend anyone who is not your child or dependent. STO4KIDZ selection committee retains discretion regarding all awards. If you have no student preference, you have the option to recommend a private school of your choice. Your tax contribution will then be considered for students attending that school who have completed applications with STO4KIDZ, or you may contribute to STO4KIDZ general funds to be awarded to any qualified student at a private school. The law prohibits parents from swapping tax credit to benefit either taxpayer’s own dependent.
A minimum 90% of your contribution is used for scholarship award on a monthly basis.
Yes. STO4KIDZ is a tax-exempt charitable organization pursuant to federal law, Section 501(c)(3). Federal I.D. Number 82-4886421
An official tax receipt will be emailed to your provided email address. If you need a receipt immediately, please contact us at INFO@STO4KIDZ.ORG. We will gladly accommodate your request.
Thank you.
STO4KIDZ is a 501(c)(3) non-profit, charitable organization. You should consult your tax advisor for your specific tax question.
We sincerely welcome and appreciate your support and participation in this most worthwhile program at no out-of-pocket cost to you.
Corporate Tax Credit
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 (A.R.S. §20-224.06 and § 43-1183), which allows a corporation to contribute to a qualified STO (School Tuition Organization) and receive a dollar-for-dollar Tax Credit up to the total amount of their tax liabilities and may qualify to also claim that amount on their federal taxes as a donation. STO4KIDZ in-turn
The 2020/2021 FY statewide Corporate Tax Credits available:
- Low-Income category corporate tax credit: $123,042,188 AND
- Disabled/Displaced category corporate tax credit: $5,000,000.
On July 7, 2020, STO4KIDZ submit the pre-approval corporate applications to the Arizona Department Of Revenue (ADOR) on behalf of the corporations which have submitted their pledge forms to STO4KIDZ. ADOR will process the applications on a first-come-first-served basis until the state cap amount is reached and at that point, no more application is accepted. Typically the cap is met within the first hour, so it is important to have your Pledge form filled with us well prior to June 30, 2020.
NOTE: The 20/21 Annual Statewide Corporate Tax Credit Cap is still open for the Low-Income Category. Please consider taking the tax credit. SUBMIT YOUR NON-BINDING PLEDGE TODAY!
- 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
- Provide scholarships for eligible K-12 Arizona private school students
- STO4KIDZ in turn awards a minimum 90% of every dollar in scholarships to eligible AZ private school students within the same school calendar year
- May also qualify to claim your contribution on your federal taxes as a donation to STO4KIDZ, a 501c3 non-profit charitable organization
(Please consult your tax advisor) http://www.azdor.gov/TaxCredits/CorporateTuitionTaxCredits.aspx
- 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 preapproved 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
1. Determine your business tax liability and how much to would like to allocate for scholarships vs paying to the state for the current year.
2. Complete and submit your contribution pledge/application form ONLINE by PRINTABLE or call STO4KIDZ for assistance 602.698.8855 on or before June 30, 2021.
3. STO4KIDZ will prepare and submit a Contribution Approval Request to ADOR. (ADOR will only accept applications submitted by an STO such as STO4KIDZ).
4. ADOR will respond to the request form, and it will be approved if the cap has not been met. Otherwise, ADOR will place applications on a waitlist based on the order requests are received.
5. STO4KIDZ will notify your company of their approval the same day ADOR sends its approval, along with instructions. Your company has 20 days from its approval date to fund STO4KIDZ.
6. Once STO4KIDZ receives your contribution funds, ADOR will be notified and STO4KIDZ will provide your company a receipt to claim your tax credit.
7. For your convenience, please see INSTRUCTIONS and forms 335-S or 335 to file and claim your tax credit.
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 at no out-of-pocket cost to you.
Student Application
STO4KIDZ is a School Tuition Organization (STO) which falls under Section 501(c)(3) of the Internal Revenue Code. We provide scholarships to qualifying students attending qualified private schools in Arizona through tax credit contributions made by individuals and corporations. STO4KIDZ is certified by the Arizona Department of Revenue (ADOR) to be in compliance with the Private School Tuition Tax Credit Requirements.
1. Complete a STO4KIDZ online application. The application process will cover the Original, Switcher, and Corporate scholarships award opportunities for your student(s). One application is required for each student per school year.
2. Begin the enrollment process with the private school of choice. Your student must either be attending a private school or the enrollment is in process.
All students can be recommended by donors for the Individual Original Tax Credit. STO4KIDZ awards a minimum 90% of every dollar in scholarship, MONTHLY.
Must apply for each student once per school year. The application is good for each school academic year and it expires at the end of each school year.
Online application opens twice a year. See below for timelines:
- May 1 – July 1.
- November 1 – December 1.
Yes! A current completed application must be on file for STO4KIDZ to consider a scholarship for your student for the current academic school year. Application expires at the end of each school year; therefore, the parent/guardian must apply for the student(s) every year. We highly take into consideration the recommendations of tax contributors, but it does not guarantee a scholarship and is not the only factor that STO4KIDZ considers when granting an award. However, we will do our best to meet the tuition needs of every student.
- Family financial circumstances
- Donor recommendations
- A brief narrative about the student by parents/guardian
- Letters of recommendation for the student (Considering student’s age)
- Students with disabilities: Preschool – 12th grade (must provide supporting documents)
- Displaced student/Foster child (Must provide supporting documents)
Yes. As of July 2021, home school children and students who recently moved to Arizona are also eligible for the tuition tax credit scholarships.
Home-schooled students, must provide an official copy of the Intent to Home-school and termination letter filed with local governing agency.
Student’s from out of state, must provide an official copy of out of state school enrollment/ withdrawal .
Please contact us for more information.
The ESA statute (A.R.S. §15-2402(B)(3) requires that while a parent has a contract with the ESA program, a student cannot receive both ESA and STO money for the same period. The ESA program states that a student may utilize an STO scholarship up to the start of ESA funding. Funding from the ESA program is on a quarterly basis and begins in the quarter following acceptance to the program. Once ESA funding begins, any outstanding STO scholarship money must be refunded by the private school to the STO.
NEW! as of July 2021 Students that participated in the Empowerment Scholarship Account (ESA) program and did not renew the account or accept the scholarship in order to accept an STO scholarship. You must provide a copy of a letter from the ESA stating your ESA account is closed.
The Original and Switcher awards are distributed monthly, and the Corporate scholarships are awarded at the beginning of each semester. You will be notified by an email each time your student receives a scholarship award and a tuition scholarship check will be sent to your student’s school.
*Please contact us if you are not sure your student qualifies to receive the Switcher (aka) Overflow/PLUS Tax Credit or the Corporate scholarships.