The State of Arizona has enacted legislation that allows an Arizona Taxpayer the option of using a portion of her/his state income tax liability to support qualifying charities and schools. For complete information about this legislation, visit http://www.azdor.gov/Refunds and Credits/Charitablecredits.htm.

There are two ways that an Arizona Taxpayer can use these tax credits to benefit PPEP.

First, an Arizona resident can contribute $200 as a single taxpayer ($400 if filing jointly) to PPEP, Inc as a qualifying charity in the State of Arizona.

Second, an Arizona resident, filing singly or jointly, can contribute $200 as a single taxpayer ($400 if filing jointly) to PPEP-TEC for extra-curricular and character education. For more information about this tax credit, go to http://www.azdor.gov/brochure/707.pdf (PPEP-TEC, as a charter school, is considered a public school of the State of Arizona.)

Here are some "frequently asked questions" (FAQ) to review as you consider participating in these tax credit programs.

1. What is a tax credit?
2. Is it a tax deduction?
3. How does it work?
4. How does the state know I have done this?
5. What if I pay out too much?
6. But I usually get a refund anyway.
7. And the tax deduction?
8. What if I support other charities or schools?
9. How will I know if another charity in Arizona qualifies?
10. Is the same true of the public school tax credit?
11. What about the tuition tax credit for students in private school?
12. When do I have to make these contributions?
13. I would like to talk to someone about this. What do you recommend?
14. OK-I want to participate. How do I do it?

• Special FAQ for PPEP Employees

What is a tax credit?

A tax credit is a dollar-for-dollar credit against the taxpayer’s state income tax liability.

 

Is it a tax deduction?

No. It is a credit on one’s Arizona state income tax return. It is a tax deduction on one’s federal return.

 

How does it work?

Let’s say that a taxpayer has a state income tax liability of $1200, filing singly. The taxpayer can contribute up to $200 (up to $400 if filing jointly) to PPEP, Inc as a qualifying charity. The taxpayer can also contribute up to $200 (up to $400 if filing jointly) to PPEP-TEC for extra-curricular and character education. The tax liability remains the same-the legislature allows you to contribute those amounts to PPEP and PPEP-TEC instead of paying the state.

 

How does the state know I have done this?

If a taxpayer contributes to PPEP, Inc and PPEP-TEC in the manner described above, PPEP, Inc and PPEP-TEC will send a special receipt to the taxpayer and the form needed for filing.

 

What if I pay out too much?

Using the example above, the taxpayer has a liability of $1200. He/she contributes to PPEP, Inc and PPEP-TEC as described. At the end of the calendar year, the taxpayer has paid $1200 to the state and has contributed a total of $400 using the tax credits. Thus, the taxpayer has paid out $1600 in state income tax and tax credits. In filing, the liability of $1200 remains the same and the $400 is sent to the taxpayer as a dollar-for-dollar refund.

 

But I usually get a refund anyway.

Will the tax credit mess that up? No. Again, using the example from above: The taxpayer has paid the state $1200 and contributed $400 to PPEP, Inc and PPEP-TEC as tax credits. In filing, the taxpayer finds that his/her liability is only $800. The refund would be $800--$400 for the overpayment of income tax and $400 for the tax credit.

 

And the tax deduction?

The law allows that tax credits on a state level qualify as a charitable tax deduction on a federal level. In essence, you lose nothing and gain a deduction.

 

What if I support other charities or schools?

While we hope that a taxpayer would support PPEP, Inc and PPEP-TEC as fully as possible, we understand that a taxpayer may have other charitable concerns. It is important to remember that a taxpayer can contribute a maximum of $200 (singly) or $400 (jointly) to a qualifying charity like PPEP, Inc. The taxpayer can split this contribution provided that each charity qualifies and that the amount contributed in total does not exceed the limits.

 

How will I know if another charity in Arizona qualifies?

We recommend that you consult the list provided by the State of Arizona http://www.azdor.gov/Refunds and Credits/certifiedcharities.pdf

 

Is the same true of the public school tax credit?

Yes, a taxpayer can split this contribution as well.

 

What about the tuition tax credit for students in private school?

This is a third tax credit available to Arizona taxpayers and does not impact PPEP, Inc or PPEP-TEC. A taxpayer can fully participate in all three tax credits with the same benefits. We suggest you contact your favorite private school to find out how to participate in the tuition tax credit.

 

When do I have to make these contributions?

A taxpayer can make these contributions at any time during the calendar year. To participate, the taxpayer must make these contributions on or before December 31st of the tax year.

 

I would like to talk to someone about this. What do you recommend?

We recommend that a taxpayer speaks to her/his tax preparer. As an additional resource to learn more about PPEP's tax credit programs, a taxpayer can call our Advancement Office at 520-806-4694.

 

OK-I want to participate. How do I do it?

Thank you! The easiest way to participate is to go our donation page and follow the simple directions to make your contribution. The taxpayer can also mail a check directly to PPEP, Inc at 802 East 46th Street, Tucson, AZ 85713. Please note "tax credit" on your check.

I believe in what PPEP and PPEP-TEC do and I want to support that mission. How can I participate?

An employee of PPEP or any of its affiliates can participate either on-line or through payroll deduction.

 

If I participate through payroll deduction, won’t that mean less take-home pay for me and my family?

No. If an employee chooses to participate in the tax credit program, the Finance/Payroll department would simply reduce your state income tax to offset the amount of the tax credits you choose. Your take-home pay would remain the same and would not be affected in any way.

 

Do I still get the money back?

A taxpayer’s state income tax liability is determined by law. If a taxpayer owes $1200, that $1200 must be paid. The legislature is allowing you a choice in how your state tax dollars are spent. A taxpayer can simply send it all to the governor and the state legislature or the taxpayer can exercise choice over how a certain amount is used, within the limits of the law (see above).

 

Do I still get the federal tax deduction?

Yes.

 

I’m not sure. Whom can I speak to?

An employee can speak to Bob Heslinga (520-806-4694).