Arizona allows individuals to redirect a portion or their entire payroll tax-withholding amount to a School Tuition Organization (like APESF), public school or other charitable organization. This means you can “take the credit” to support school choice without having to provide money up front or in one large sum!
If your employer voluntarily elects to participate, you can request that a portion of your state tax-withholding amount be redirected to APESF, and your employer will make quarterly payments to us on your behalf. APESF will help facilitate this process with your employer. At the end of the year, you will receive a statement from APESF and your employer indicating the total amount of your contribution. Your employer will also send a statement to the Arizona Department of Revenue.
Steps to Redirect Your Payroll Tax
- Fill out the Payroll Withholding Donation Form, and send it to APESF.
- APESF will send you a form that you can sign and give to your employer (Arizona Form A-4C).
- If your employer decides to participate, quarterly payments will be made to APESF on your behalf (see Arizona Form A1-QTC).
- At the end of the calendar year, APESF will send you a receipt showing the total amount of your tax credit through paycheck redirects or general contributions. You may use that receipt when you file your tax return the following year.
- Reducing your tax-withholding amount does not change your state tax liability. It simply means that you are paying taxes to APESF directly, rather than making a contribution and receiving it back as a credit the following year.
- You are responsible for requesting this change from your employer. Participation is completely voluntary on the employee’s part. APESF will help facilitate the process by providing the necessary forms for you and your employer and answer as many questions as we can.
- Payments will be made quarterly by your employer and will be accepted by the payroll date, rather than the postmark date. In accordance with the law, employers are allowed to send payments within 15 days after the end of each calendar quarter.
- The portion contributed to APESF during each pay period cannot exceed the total amount of state tax withholding allocated for that pay period. It is important for you to clearly communicate how much and in what order contributions should be held if you are taking multiple state tax credits.
- We recommend that you consult your tax advisor regarding your expected state tax liability, withholding and anticipated contribution amount. The maximum credit for taxpayers can be found on our donation page. If your total contribution exceeds your state tax liability for a given year, the excess amount may be rolled over and claimed on the following year’s taxes for up to five years.
- You may make a separate contribution to APESF if the amount of withholding for APESF does not exactly equal the total amount you want to give.
- This is a benefit to your employees at minimal cost to you.
- Participation is voluntary on the employer’s part. APESF will help facilitate this process the best we can, and we will be happy to answer any questions you may have.
- Employee communication regarding this withholding reduction is confidential information.
- Employers will be required to make quarterly payments to APESF on the employee’s behalf using the Quarterly Payment of Reduced Withholding for Tax Credits Form (Arizona Form A1-QTC). You must also provide an Arizona Charitable Withholding Statement (Arizona Form A1-C) to each participating employee and the Arizona Department of Revenue indicating the total amount contributed through withholding reductions for the tax year, or upon that employee leaving the company. APESF will also send a receipt to each employee by January 31 of the following year showing his/her total contributions.
- Employer Packet