Tax Credit Programs

APESF accepts donations for all four of the following tax credits that provide scholarships to students attending private schools. Please note that all students qualify to receive funding from Original Individual Income Tax Credit sources and that some students may qualify to receiving funding from all sources.

Original Individual Income Tax Credit

Credit Amount Scholarship Guidelines Scholarship Prerequisites
Tax Year 2016
$545 single filers
$1,090 married filing jointly filers

Tax Year 2017
$546 single filers
$1,092 married filing jointly filers

*Taxpayer may donate through April 15th and count donation as tax credit in the preceding tax year.

For K-12 students (Preschool students with properly documented disabilities also eligible)

STO cannot award scholarship solely based on donor recommendations

STO must consider financial need when awarding scholarships

No scholarship cap

None

Switcher Individual Income Tax Credit

Credit Amount Scholarship Guidelines Scholarship Prerequisites
Taxpayer MUST FIRST donate the maximum credit amount for the original individual income tax credit before the switcher credit can be claimed.

Tax Year 2016
$542 single filers
$1,083 married filing jointly filers

Tax Year 2017
$543 single filers
$1,085 married filing jointly filers

*Taxpayer may donate through April 15th and count donation as tax credit in the preceding tax year.

For K-12 students (Preschool students with properly documented disabilities also eligible)

STO cannot award scholarship solely based on donor recommendations

STO must consider financial need when awarding scholarships

No scholarship cap

Student must meet ONE of the following prerequisites:

Student attended an Arizona public school as a full-time student for at least 90 days of the prior fiscal year and then transferred from the public school to a private school; OR

Is enrolling or currently enrolled in a private school kindergarten; OR

Is enrolling or currently enrolled in a private preschool program for students with disabilities; OR

Is a dependent of a member of the armed forces of the United States who is stationed in Arizona pursuant to military orders; OR

Received a switcher individual scholarship under one of the above criteria in a prior year and the child continued to attend a private school in subsequent years; OR

Received a low-income corporate scholarship or a disabled/displaced corporate scholarship in a prior year and the child continued to attend a private school in subsequent years.

Low-Income Corporate Income Tax Credit

Credit Amount Scholarship Guidelines Scholarship Prerequisites
Donation pre-approval required.

No limit on how much a single corporation can donate, except total credit limit.

Fiscal Year 2016/2017
Total credits allowed limited to $61,917,365

Fiscal Year 2017/2018
Total credits allowed limited to $74,300,838

For K-12 students (Preschool students with properly documented disabilities also eligible)

Student’s family income cannot exceed 185% of the income required to qualify a child for reduced-price lunches. Income levels for free or reduced price lunches for academic year 2016/2017 can be found here. Income levels for free or reduced price lunches for academic year 2017/2018 can be found here.

Academic Year 2016/2017
SCHOLARSHIP CAP
> $5,200 for grades K-8 and preschool students with disabilities
> $6,500 for grades 9-12

Academic Year 2017/2018
SCHOLARSHIP CAP
> $5,300 for grades K-8 and preschool students with disabilities
> $6,600 for grades 9-12

Student’s family income cannot exceed 185% of the income required to qualify a child for reduced price lunches AND student must meet one of the following:

Student attended an Arizona public school as a full-time student for at least 90 days of the prior fiscal year or one full semester and then transferred from the public school to a private school; OR

Is enrolling or currently enrolled in a private school kindergarten; OR

Is enrolling or currently enrolled in a private preschool program for students with disabilities; OR

Is a dependent of a member of the armed forces of the United States who is stationed in Arizona pursuant to military orders; OR

Received a low-income corporate scholarship under one of the above criteria in a prior year and the child continued to attend a private school in subsequent years; OR

Received an original individual scholarship or a switcher individual scholarship in a prior year and the child continued to attend a private school in subsequent years.

Disabled/Displaced Corporate Income Tax Credit

Credit Amount Scholarship Guidelines Scholarship Prerequisites
Donation pre-approval required.

No limit on how much a single corporation can donate, except total credit limit.

Fiscal Year Credit Limit
Total credits allowed limited to $5 million

For K-12 students (Preschool students with properly documented disabilities also eligible)

Student must have an IEP, MET or a 504 plan from an Arizona public school OR have been placed at one point in the Arizona foster care system

Sum of a student’s DD scholarships is limited to 90% of state aid or cost of tuition, whichever is less

*Effective July 24, 2014 retroactive to July 1, 2014

Student must meet either the disabled or displaced qualification

Student must submit either the Disabled Verification Form or the Displaced Verification Form.

The original individual income tax credit for donations to private school tuition organizations (STOs) became law in January 1998. The low-income corporate income tax credit for donations to STOs became law in September 2006. The disabled/displaced corporate income tax credit became law in August 2009. All three of these credits were changed by bills passed in the 2010 second regular legislative session and the 2012 second regular legislative session. [Laws 2010, 2nd Regular Session, HB 2663, Ch. 292 and HB 2664, Ch. 293; and Laws 2012, 2nd Regular Session, SB 1047, Ch. 4] The switcher individual income tax credit for donations to STOs became law in January 2012.

*Please note that this information is subject to change. The most recent version can be determined by the date on the information posted to the Arizona Department of Revenue website, www.azdor.gov.

Contact us

APESF
6909 E Greenway Parkway #240
Scottsdale, AZ, 85254

Phone
480 699 8911

Fax
480 646 3196

Email
helpdesk@apesf.org

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ARS 43-1089 NOTICE

A school tuition organization cannot award, restrict or reserve scholarships solely on the basis of donor recommendation. A taxpayer may not claim a tax credit if the taxpayer agrees to swap donations with another taxpayer to benefit either taxpayer’s own dependent.

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