The Individual Income Tax Credit Program allows Arizona taxpayers to get directly involved in supporting the statewide school choice movement. Since 1997, Arizona taxpayers have been eligible to receive a 100% dollar-for-dollar tax credit against their state income tax owed by making a contribution to a School Tuition Organization like APESF. Simply put, individuals can donate or “re-direct” state income tax dollars they owe to help Arizona students attend the private school of their choice. The maximum annual “Original” tax credit for married taxpayers for the 2013 tax year is $1034 and $517 for individuals.

In 2012, the new Overflow/PLUS tax credit was signed into law allowing donors to claim an additional tax credit OVER AND ABOVE the “Original” tax credit. The “Overflow/PLUS” tax credit allows donors to donate an additional $514 (single) or $1028 (married). Donors must first meet the $1034 (married) or $517 (single) Original Tax Credit Program maximum in order to claim the Overflow/PLUS tax credit. Overflow/PLUS Tax Credit donation revenues may only be allocated to students that meet the below criteria as determined by Arizona state law.

• Students that attended an Arizona public or charter school as a full-time student for at least 90 days in the previous school year and are transferring to an Arizona qualified private school.
• Students enrolled in an Arizona private Kindergarten.
• Students enrolled in a private pre-school program for students with disabilities.
• Students who are dependents of a member of the US Armed Forces, stationed in Arizona pursuant to military orders.
• Students who previously received a scholarship, in any prior year, from the Low-Income Corporate or Overflow/PLUS program AND have continuously attended a qualified Arizona private school since then.

“Taking the credit” for school choice is a winning solution for everyone.

Eligibility

In order to receive a scholarship from APESF, student applicants must be enrolled in a “qualified Arizona K-12 private school.” A qualified school means a nongovernmental primary or secondary school, or a preschool for handicapped students, that does not discriminate based on race, color, handicap, familial status or national origin. A qualified school does not include a charter school or any program operated by a charter school.

Application Process

• All potential recipients of a scholarship must complete a Scholarship Application one time per school year to be eligible for consideration. Applications for the coming school year are released by April 1 and will remain valid through the entire school year.
• Applications are submitted to a uniform grading system developed by APESF that is based on the financial need of the family, individual merits of each student and any hardship circumstances the family is experiencing.
• Once this process is complete, the family will receive a notice by email from APESF detailing the results of their application.
• The scholarship committee considers processed scholarship applications for funding on a monthly basis. Awards are subject to available funding from tax credit revenues. Recommendations from donors and schools for potential recipients of a scholarship award are also considered once the applicant’s scholarship application has been processed.
• If a scholarship is awarded, the family and school will be notified by email. The school must verify enrollment status and outstanding tuition balance due before APESF will send the award.

Scholarship Awards

Scholarship distributions are awarded and funded by APESF on a monthly basis.  Applications must be received or active in our system by the last day of the previous month to be considered. The school must verify enrollments status of the student and that their award does not exceed the published tuition due for the current school year.

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Designation vs. Recommendation

Federal tax regulations state that a contribution made for the direct or designated benefit of an individual is considered a “gift” and NOT a charitable contribution for tax purposes. This type of gift would also be disqualified from receiving tax credit treatment under the Arizona Tuition Tax Credit law. APESF will allow donors to make recommendations, NOT designations, with the understanding that the final decision to award tuition scholarships is up to sole and absolute discretion of the School Tuition Organization (APESF). Recommendations received from donors and schools in support of student applicants who have completed the financial review process and have received an application confirmation by email from APESF will be strongly considered. However, a recommendation does not imply a guaranteed award.

Reciprocity (“Swapping”)

Reciprocity or “swapping” of any type is strictly prohibited. When two or more individuals agree to recommend each others’ child when making their tax credit contributions with the expectation that their own family members benefit through the exchange or “swap”, it violates federal tax law which states that you may not deduct a contribution from which you receive or expect to receive any benefit. If reciprocity is suspected, the donor(s) will first be notified and their recommendation(s) may not be considered. APESF further suggests that any family applying for a scholarship and also making a tax credit contribution should consider recommending either the general fund or students at a particular school and avoid individual recommendations of specific students to protect their donation’s tax treatment.

The Corporate Income Tax Credit Program was established to give parents from low to moderate income households a CHOICE in their child’s education. Our goal is to provide tuition scholarships through re-directed corporate income tax dollars to qualified students.

Eligibility

A student qualifies for the Corporate Tuition Tax Credit Scholarship if the following criteria are met:

• The child is enrolled in a qualified private school in the state of Arizona.
• The child attended a public or charter school as a full-time student for at least 90 days of the prior fiscal year and transferred to a qualified private school OR is a kindergartner at a qualified private school OR is in a preschool program for students with disabilities at a qualified private school OR is a dependent of a member of the armed forces of the United States stationed in Arizona pursuant to military orders OR has received a scholarship previously for one of the previously listed criteria and has continued to be enrolled in a qualified private school.
• The child has a current application on file with APESF.
• The family’s income does not exceed 185% of the income limit required to qualify for reduced-price lunches under the national school lunch and child nutrition acts. See below:

For continuing eligibility, the child must receive a scholarship the first year and each year thereafter. If no scholarship is awarded during a given year, they are no longer eligible to receive assistance from the corporate program. However, they always remain eligible to receive assistance from the Individual Income Tax Credit Program.

Application Process

• All potential recipients of a scholarship must complete a Scholarship Application one time per school year to be eligible for consideration. Applications for the coming school year are released by April 1 and will remain valid through the entire school year.
• Applications are submitted to a uniform grading system developed by APESF that is based on the financial need of the family, individual merits of each student and any hardship circumstances the family is experiencing.
• Once this process is complete, the family will receive a notice by email from APESF detailing the results of their application. If your application qualifies for a corporate scholarship and funding is available, APESF will contact you to send in more documentation to complete your application for corporate funds.
• The scholarship committee will award scholarships from corporate funds based on tax credit revenues available.
• If a scholarship is awarded, the family and school will be notified by email. The school must verify enrollment status and outstanding tuition balance due before APESF will send the award.

Corporate Awards

Award recipients will be notified by email if they receive a corporate scholarship. Once a child has received a corporate award, they will be eligible to receive an award each year thereafter provided there are funds available and they still fall below the income threshold.

For the 2013-2014 school year, the maximum corporate scholarship a child can receive from any one STO is $4900 for grades K-8 and $6200 for grades 9-12. These maximums grow by $100 each year. Again, the limits apply to scholarships received from each STO, not to the total scholarships received from all STOs in aggregate.

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