Residents can aid agencies, themselves by giving
As residents prepare to do their income taxes for 2016, they have an opportunity to financially help some human service agencies in the Northwest Valley.
The Arizona Charitable Tax Credit is a charitable contribution residents can give to qualifying 501(c)3 corporations that results in dollar-for-dollar tax credit on state income taxes. The credit can only be used to offset a tax liability; it cannot be used to get a refund. If the donor’s tax liability is less than the total donation, the remainder can be held over to the next tax year, according to Jim Graff, Sun City Community Assistance Network AARP Tax-Aide coordinator.
Taxpayers no longer are required to itemize their charitable contributions to a qualifying charitable organization.
While traditionally the deadline to make these donations has been Dec. 31 annually, taxpayers still have time to make contributions past the end of the year to qualify for their 2016 returns. In 2015 the Arizona Legislature approved a bill extanding the deadline to the same deadline to file tax returns for the preceding year. Contributions for 2016 returns can be made as late as April 18, 2017.
Under the Dec. 31 deadline, some agencies, most notably school districts, kept offices open on New Year’s Eve to take donations. With the April deadline that is generally not done anymore. But agencies still do what they can to make it easier to donate.
“We will have staff at the district office who can process the paperwork,” Zachery Fountain, Dysart Unified School District public information director, stated in an email. “Additionally, contributors can submit the tax credit donation via the mail. We appreciate our community’s support.”
Tax credit donations assist a variety of school programs, he added.
“Any tax credit donation can go towards an extra-curricular activity and school to support,” Mr. Fountain stated. “The donation go towards the activity and school of the community member’s choice.”
That is true of all tax credit donations, no matter the agency.
“We will direct the donation to any area or program designated by the donor,” said Laura Horsley, Eve’s Place executive director.
Peoria Unified School District officials will continue their New Year’s Eve donation collection, with the administrative office, 6330 W. Thunderbird Road, open 9 a.m.-1 p.m. Saturday, Dec. 31.
“Tax credit donations have helped thousands of students by funding a wide variety of extra-curricular activities,” Erin Dunsey, PUSD spokeswoman, stated in an email. “Peoria Unified extends our heartfelt thanks to our local community for their ongoing support of our students through tax credit donations.”
Another boost for qualifying organizations is an increase in the donation amount. Legislators approved Senate Bill 1216 earlier this year and the bill was signed into law by Gov. Doug Ducey in May. The bill increased the Charitable Tax Credit from $200 to $400 for individuals and $400 to $800 for couples filing jointly.
Arizona also allows taxpayers a dollar-for-dollar tax credit for contributions to public and charter schools, but those amounts stayed at $200 for an individual and $400 for a married couple filing jointly.
Some organizations saw the benefit not long after it was signed into law.
“Our first $800 donation came in July 1,” said Jesse Ramirez, Valley View Community Food Bank director.
Many qualified organizations rely heavily on the tax credits to enhance their revenues annually.
“We are really excited about the increase,” said Sara Villanueva, Benevilla vice president for development. “It is such an integral part of being able to serve our clients.”
Sun City Community Assistance Network’s budget is about $82,000 per year and is totally funded by contributions from Sun City residents, including tax credits; clubs; and annual donations from APS, Southwest Gas, EPCOR Water and the Sun City Men’s Club, according to Hugh Duncan, Sun City CAN board president. CAN, like some other qualifying agencies, receives no government funding, he added. CAN officials had a half-page ad in the Dec. 14, 2016 Sun City Independent that served as a donation form.
Mr. Graff said about 5 percent of those who had their income taxes done through Sun City CAN’s AARP Tax-Aide program last year took advantage of the tax credit option.
Sun City CAN received just under $68,000 in tax credit donations in 2015, Mr. Graff said. Through the end of June this year, the agency has received $37,000, he added.
Valley View received $6,200 in tax credit donations in 2015, double what the agency received in 2014, according to Mr. Ramirez.
“The increase will be great for us because we are now buying more of our food,” he said. “Our food donations have dropped, and continue to do so. This year we were cheated out of food donations from the mail carrier drive, and that caused us to have to buy even more from Global Foods.”
Like Valley View, Benevilla officials have seen an increase in tax credit donors through the years.
“Our donor base has doubled since we became a qualified charitable organization,” Ms. Villanueva explained.
Benevilla received $135,000 in tax credit contributions in 2015 and had surpassed that by $7,000 through August, Ms. Villanueva added. Benevilla received $56,000 in tax credit donations in 2014.
Valley View, Sun City CAN and Benevilla are not the only qualified charitable organizations in the Northwest Valley. There are 27 in the communities of Surprise, Sun City West, El Mirage, Sun City, Youngtown, Peoria and Glendale (see breakout box for full community list).
Taxpayers can make a contribution to a charitable organization and a school in the same year.
“We are seeing a lot of our donors making contributions to both charities and schools,” Ms. Villanueva said.
These donations are used by charitable agencies to assist residents in need in a variety of ways.
“Our tax credit dollars go directly to food purchases, it does not go into our general fund,” Mr. Ramirez explained.
Similarly, Benevilla officials use their tax credit contributions to boost existing programs, including, but not limited to, home delivery of meals, grocery shopping trips and caregiver support, according to Ms. Villanueva.
A qualifying charity is one that is exempt from federal income tax under IRS Code Section 501(c)(3), according to the Arizona Department of Revenue website. The charity must be designated as a community action agency that receives Community Services Block Grant Program money under the United States Code, Title 42, Section 9901. The charity must spend at least 50 percent of its budget on services for Arizona residents who receive Temporary Assistance for Needy Families benefits or for low-income Arizona residents and their households.