The Arizona Charitable Tax Credit presents a rare win-win opportunity for AZ taxpayers: reduce your tax bill while also supporting a charitable organization of your choice. However, while this tax credit can be highly advantageous for Arizona residents, it can also be difficult to claim. This complete guide will thoroughly examine the Arizona Charitable Tax Credit and help you understand how it could reduce your tax bill in 2024 and 2025.
To receive more personalized advice on leveraging the Arizona Charitable Tax Credit, please contact a professional financial advisor on the ARQ Wealth team today. ARQ Wealth is one of the top-rated financial planners in Arizona, specializing in wealth management strategies and providing white glove service to clients.
What is the Arizona Charitable Tax Credit?
The Arizona Charitable Tax Credit allows taxpayers in the state of Arizona to reduce their state tax liability by making charitable donations to qualified organizations. Each charitable donation directly reduces the resident’s tax bill, up to a certain limit. Arizona residents can receive the AZ charitable tax credit by donating to qualifying charities that fall under one of these two categories:
- Qualifying Charitable Organizations (QCOs)
- Qualifying Foster Care Charitable Organizations (QFCOs)
Both QCOs and QFCOs provide immediate basic needs to Arizona residents in need, such as low-income residents or those with chronic illnesses or disabilities. In order to receive contributions eligible for the tax credit, QCOs and QFCOs must meet a wide range of criteria and become certified by the Arizona Department of Revenue.
Be sure to double-check that a charity is certified with the state of Arizona before making a donation in hopes of claiming a tax credit.
You can review a complete list of certified Arizona QCOs and QFCOs here.
Also, please note that Arizona taxpayers can receive a tax credit for donating to both a QCO and a QFCO. If you want to maximize your tax credit, then you’ll likely want to contribute to both types of organizations. We’ll discuss exactly how much of a credit you can receive later in this guide.
Tax Credit Vs. Tax Deduction
It’s important to note that the Arizona Charitable Tax Credit is classified as a tax credit, which is different from a tax deduction.
A tax credit directly reduces your tax liability on a dollar-for-dollar basis. For every dollar that you donate, your tax obligation will be reduced by a dollar (up to a limit). A tax deduction indirectly reduces your tax bill by reducing your taxable income, which results in a lower tax payment.
Tax credits like the AZ charitable tax credit are incredibly popular because they can directly lower your tax bill.
Arizona Charitable Tax Credit Limit
In 2024 and 2025, the Arizona Department of Revenue only allows AZ residents to claim charitable donations up to the following limits:
Tax Credit Limits for QCOs
- The maximum QCO credit donation amount for 2024
- $470 single, married filing separate, or head of household
- $938 married filing joint.
- The maximum QCO credit donation amount for 2025
- $495 single, married filing separate or head of household
- $987 married filing joint.
Tax Credit Limits For QCFOs
- The maximum QFCO credit donation amount for 2024
- $587 single, married filing separate or head of household
- $1,173 married filing joint.
- The maximum QFCO credit donation amount for 2025
- $618 single, married filing separate or head of household
- $1,234 married filing joint.
It’s best to speak with a qualified Arizona-based financial advisor to ensure that you successfully claim the Arizona Charitable Tax Credit on your 2024 or 2025 tax bill. However, here is a quick crash course on how to do so.
How to Claim the Arizona Charitable Tax Credit
Claiming the Arizona Charitable Tax Credit only takes a few simple steps:
Step #1: Identify qualifying organizations and record their code
The first step is to identify a qualifying QCO and/or QFCO with a mission you support. If you already have an organization in mind that you’d like to donate to, be sure to ensure that it is qualified for the AZ tax credit by reviewing the 2024 list of qualifying charities. If you donate to an organization that is not certified by the state, you will not receive a credit on your taxes.
Once you’ve found a qualified QCO or QFCO, you’ll want to record its QCO or QFCO charity code. This five-digit code is found on each list of qualifying organizations, and you will need it when it comes time to file your tax forms.
Remember that you can contribute to both a QCO and QFCO. To maximize your tax credit, you will likely want to donate to both types of charities.
Step #2: Make cash contributions
The second step is to make cash contributions to the qualifying charitable organization that you selected in step 1. You must donate cash, as donating property or goods will not qualify for the tax credit. You’ll also want to maintain a receipt of your gift to the charity so that you can provide a copy with your tax return.
Additionally, keep in mind that you are not required to make the maximum donation. Making the maximum donation is the best way to maximize your tax credit. But you can donate as little as $50 or $100 and still claim your donation amount as a credit on your tax return.
Step #3: Claim your contributions as a tax credit
After making your donation, you’ll want to keep a record of the transaction so that you can claim it when filling out your Arizona tax return. When filing your state taxes, you’ll need to fill out the following forms:
- If you made a cash contribution to a QCO, then you’ll need to fill out Arizona Form 321.
- If you made a cash contribution to a QFCO, then you’ll need to fill out Arizona Form 352.
- If you’ve contributed to both types of organizations, you must fill out both forms.
When filling out your form(s), you’ll need to document the following information:
- The date that you made the contribution
- The organization’s qualifying charity code
- The name of the organization
- The dollar amount that you contributed
Be sure to note all of this information when you donate so that you can reference it when filing your tax return.
If you forget to claim your donation on your tax return, then don’t worry. Credits not applied to tax obligations can be carried forward to future tax years.
AZ Tax Credit Example
Let’s take a quick look at an example of how the Arizona Charitable Tax Credit can help reduce your tax liability in 2025.
In 2025, the maximum tax credit that a single tax filer can claim is $495 for donations made to a QCO and $618 for donations made to a QFCO. If a single filer contributes the maximum tax credit donation to a QCO and QFCO, then they can reduce their tax bill by $1,113. If this person’s tax bill in 2025 was originally $3,500, then they would be able to reduce their bill to $2,387 ($3,500 – $1,113 = $2,387).
Keep in mind that Arizona residents do not need to contribute the maximum amount to charity. They can choose to donate less money if they’d like. They can also choose to donate more money, although they will only be able to claim a certain amount as a tax credit.
FAQs
Some frequently asked questions about the Arizona charitable tax credit include:
How does the Arizona Charitable Tax Credit work?
The Arizona Charitable Tax Credit allows you to reduce your Arizona state income tax bill on a dollar-for-dollar basis by making donations to eligible charities.
How much can I donate for the AZ tax credit?
In 2025, you can claim up to $495 (single filer) or $987 (married, filing jointly) for contributions made to a QCO. You can also claim up to $618 (single filer) or $1,234 (married, filing jointly) for contributions made to a QFCO.
What is the charitable tax credit for 2024 in Arizona?
The charitable tax credit in Arizona is a program that encourages AZ residents to contribute to charity in exchange for a reduced tax bill. In 2024, single filers could claim a maximum tax credit of $1,113 for donations to qualifying QCOs and QFCOs. This program is one of the more popular Arizona tax credits.
Final Thoughts
We hope that you’ve found this article valuable in learning about the Arizona Charitable Tax Credit and how it can save you money on taxes. This program is highly attractive for Arizona residents because it lets them directly reduce their tax bill on a dollar-for-dollar basis while also supporting a charitable cause.
Interested in leveraging this tax credit to your advantage in 2025? Please reach out to the ARQ Wealth team to receive more personalized information regarding Arizona state tax credits.
To read more about financial planning for Arizona residents, be sure to visit the ARQ Wealth University section of our website to learn more about retirement planning and investment strategy.
