Identifying Other AZ Tax Deductions and Credits

Az Tax Deductions and State Income Tax Credits provided to apply against increased excise taxes imposed by county governments to the qualified taxpayers. These credits depend on the taxpayer’s income available for each year. The primary goal of the tax credit is to provide financial assistance in the form of tax relief to disabled and low-income individuals. 

Individuals who make cash donations to Qualifying Charitable Organizations (QCO) and Qualifying Foster Care Charitable Organizations (QFCO) are provided with tax credits. These tax credits can be claimed on their Arizona Personal Income Tax Returns.

The Contributions made to Qualifying Charitable Organizations provide immediate basic needs to low-income residents or individuals who have a chronic illness or physical disability residents of Arizona who receive temporary assistance for needy families (TANF) benefits. 

Any contributions for the scholarships of students enrolled in the private schools through any Certified School Tuition Organizations are also given with tax credits. These credits are both available for the donations made by individual taxpayers and by corporate taxpayers.

A Health Insurance Premium Tax Credits are provided for participating health insurance companies that enroll qualified businesses who were not covered by health insurance previously. These credit amounts are in the form of reduced premiums passed on to the small business. Certificate of Eligibility is issued to qualified applicants once funds are available. The businesses have 90 days to get coverage to the participating health insurance company, or else, a certificate will expire. The expiration date is also stated in the certificates. The Certificate of Eligibility must be forwarded to your health insurance company from the time of application for coverage. The certificate confirms that your business is qualified to take part in this program. It is now the responsibility of the insurance company to report your enrollment to establish the tax credit.

For individuals who make contributions or pay fees to public schools in the state of Arizona, they may claim non-refundable tax credits in support of eligible activities, programs, and purposes regulated by the state. Individuals may claim this public school tax credit on Form 322.

Payments on basic research to a university under the jurisdiction of the Arizona Board of Regents; income tax credit is available for taxpayers that can be claimed by an individual or corporate. The credit is available for taxpayers who are qualified for the general Arizona Research and Development income tax credit.

However, to become eligible in the availment of the additional income tax credit for making basic research payments to the accredited research agencies or universities a taxpayer must:

  •  Arizona Commerce Authority must provide a letter of certification or certification that you are qualified
  • Also, the Arizona Department of Revenue must provide a letter of approval certifying the credit amount 

For individuals who own a qualified energy generator that first produces electricity from and after Dec. 31, 2010, and before Jan. 1, 2021, using adequate energy resources can avail of a corporate income tax credit. Approval and certification must be secured from the Arizona Department of Revenue before claiming the tax credit based on applications submitted.