Support Our Lady of Sorrows Academy through the State Tax Credit program.
Redirect Your Arizona State Taxes to Our Lady of Sorrows Academy – At No Net Cost to You!
The Arizona Private School Tuition Tax Credit Law, A.R.S. Section 43-1089, allows you, as a taxpayer to direct your Arizona state tax liability to tax-exempt School Tuition Organizations (STOs) which provide scholarships to students at the private school of your choice.
This is a dollar for dollar reduction in the income taxes you owe the State.
The funds are used exclusively for the cost of tuition at the private school you specify – and we hope you designate our very own Our Lady of Sorrows Academy. The STOs on our list will even consider specific student designations, should you choose this route. Download our brochure (pdf) for the 2022-2023 academic year to share with friends and family.
We are grateful for your consideration to support our Catholic education founded upon traditional principals. We would like to assist you, if you have questions or would like to have someone guide you through the process:
3-Step Guide to Make a Contribution
Step 1: Find Out How Much You Can Contribute
There is no cap to the amount you can contribute and any amount is appreciated, but there is a maximum tax credit you can receive by the State of Arizona each year as you file your taxes. This maximum amount you will be credited is the lesser of your tax liability or tax credit limit (based on your tax filing status). For 2022 taxes, the max credit you may donate and then deduct from your tax liability is: $2,483 for those filing Married/Jointly and $1,243 filing Single.
Find Your Tax Liability:
Look at your last year’s tax return to determine how much you pay in state income taxes. Check line labeled "Subtotal of Tax" on tax form 140 or tax form 140PY. In 2021, this was line #48 on tax form 140 or line # 58 on tax form 140PY. Please note that the line number may change from year to year, but it will always be called "Subtotal of Tax".
Find Your Tax Credit Limit:
Please check this year’s maximum tax credit limits, which are based on your tax filing status.
For your information, the “Original” is the first Arizona tax credit program that was implemented in 1998 and is regulated under ARS 43-1089. The “Switcher” or “Overflow Plus” is simply an additional Arizona tax credit that was implemented in 2012.
Please refer to the total amount of your filing status. This is your tax credit limit.
2022 Maximum Tax Credits
|Filing Single||Married, Filing Jointly|
Take the Lesser of the Two
Now that you have found your personal tax liability and your tax credit limit in the previous 2 steps, please take the smaller of the two numbers. This is the dollar amount you can contribute to our Academy via an STO and have credited back to you in full when you file your taxes.
Step 2: Make Your Contribution
Click one of the two links immediately below and fill out the online form to contribute. Be sure to keep your receipt for when you file your taxes. Done!
Perhaps you would like to help a particular student at our Academy? Making a student recommended contribution means that you are helping to pay for that student’s tuition at our Academy, and you can either be named or remain anonymous. The STOs on our list will consider your student recommendation, just be advised that STOs cannot award, restrict or reserve scholarships solely on the basis of a donor recommendation. There are two restrictions on student recommended donations:
- You may not recommend your own child or dependent.
- You may also not swap donations with another taxpayer to benefit either taxpayer’s own dependent.
Also, if there is another STO you would like to use, please inform our advisors so we may ensure this particular organization will work with our Academy.
Step 3: Claim Your Tax Credit
File your taxes in the manner you would ordinarily: with a tax professional, via a tax software, etc. Just be sure to claim your tax credit with the tax credit receipt(s) you will receive from the STO(s) and tax forms 301, 323 and 348.
- Download Form 301: https://azdor.gov/forms/tax-credits-forms/nonrefundable-individual-tax-credits-and-recapture
- Download Form 323: https://azdor.gov/forms/tax-credits-forms/credit-contributions-school-tuition-organization
- Download Form 348: https://azdor.gov/forms/tax-credits-forms/credit-contributions-certified-school-tuition-organization-%E2%80%93-individuals
All tax forms along with their instructions are of course on the Arizona Department of Revenue’s website, under Tax Credit Forms: https://azdor.gov/forms/tax-credits-forms
ARIZONA BUSINESSES are also eligible to receive a dollar-for-dollar tax credit (A.R.S. 43-1183 & A.R.S. 43-1184):
C-, S- Corp, LLC filing as S-Corp, Insurance Companies paying premium taxes in Arizona. These businesses are in the unique position to help children and families in Arizona that cannot afford to send their children to the private school that best meets their educational needs.
Frequently Asked Questions
Q: How do I know if I pay state income taxes and can contribute?
A: Everyone pays state income taxes, unless you are taking a loss or don’t have earned income. Whether you receive a tax refund or have a balance due come tax time is irrelevant. Take a look at your last year’s tax return to determine how much you pay in state income taxes. Check line #48 on tax form 140 or line # 58 on tax form 140PY. This is your tax liability from last year. This will give you an idea how much you can direct to our school via any of the STOs on our list.
Q: How do I file my taxes after making a contribution?
A: Each contributor files tax forms 301, 323 and 348. Submit these forms together with the tax receipt you receive from the STO to your tax preparer or TurboTax. These forms can be found at azdor.gov or downloaded from our links above.
Q: I am retired. Can I redirect my state taxes and receive a tax credit?
A: Yes, as long as you have a tax liability with the State. See question 1.
Q: Which STOs do I direct my state taxes to?
A: We recommend any of the following STOs, with which our academy has successfully worked. Please don’t forget to specify Our Lady of Sorrows Academy as the recipient school.
If there is another organization you would like to use, please inform our advisors so we may ensure this particular organization will work with our Academy.
Q: Is it easy to contribute?
A: Yes. It takes 3 steps: (Please see 3-Step Guide to Make a Contribution above)
Find out how much you can contribute.
Make your contribution by contacting our advisors or via the steps on our website.
Claim your tax credit with the tax credit receipt you will receive from the STO and using tax forms 301, 323 and 348.
Q: How much can I contribute?
A: Any amount is appreciated, but there is a maximum tax credit you can give each year. This amount is the lesser of your tax liability or tax credit limit. For detailed instructions, please see 3-Step Guide to Make a Contribution above.
Q: Can I recommend a child for a scholarship?
A: Yes! The STOs on our list will consider your student recommendation when you direct your state tax liability to them. You can choose to remain anonymous. Be advised that STOs cannot award, restrict or reserve scholarships solely on the basis of a donor recommendation. There are two restrictions on student recommended donations:
You may not recommend your own child or dependent.
You may also not swap donations with another taxpayer to benefit either taxpayer’s own dependent.
Q: What is employer matching?
A: Many of the companies in Arizona will match your donation. If you have donated to a registered 501c3, such as the STOs we recommend, your company may match that donation. Simply talk with someone in HR to find out more. You will need your donation receipt you received when you donated to the STO.
Q: When can I donate?
A: The STOs on our list accept donations throughout the year. Donations must be made prior to filing your taxes. For donations made between January 1 and April 15, you may choose whether to claim the tax credit for the previous or the current tax year. For tax year 2022, donations can be received before midnight on April 15, 2023. This date coincides with the federal filing deadline.
Consider donating on Giving Tuesday (end of November each year), when az4education.org and topsforkids.com will pass thru 100% of your donation vs the typical 90-95% of nonprofits.
Q: We are expecting a tax refund. So we can’t donate, right?
A: You can still donate, even if you’re expecting a tax refund. As a matter of fact, it’s irrelevant if you’re expecting a refund or having to pay taxes come tax time. All that matters is that you have a tax liability. See question 1.
If you are expecting a state tax refund, then after making a contribution, your refund amount will simply be larger. If you are expecting having a bill due after filing, then after donating, the donated amount will be subtracted from the bill due. To illustrate this, please see the basic tax math in the table below:
Expecting a State Tax REFUND After Filing
|WITHOUT Donation via STO||WITH Donation via STO|
|State Tax Liability||-$3,000||-$3,000|
|State Taxes Already Paid Throughout Year||+$3,500||+$3,500|
|Donation via STO||+$0||+$2,365|
|Result||State Refund =
|State Refund =
Expecting to PAY State Taxes After Filing
|WITHOUT Donation via STO||WITH Donation via STO|
|State Tax Liability||-$1,000||-$1,000|
|State Taxes Already Paid Throughout Year||+$300||+$300|
|Donation via STO||+$0||+$1,000|
|Result||State Bill Due =
|State Refund =
Q: Can businesses redirect their Arizona state taxes to the Academy?
A: Yes. An Arizona-based corporation (“C”- or “S”- Corp, LLC filing as S-Corp, Insurance companies paying premium taxes in Arizona), may also designate up to their state income tax liability for the given tax year, as long as it does not exceed the statewide cap for the year. Please let us know if you have any ties to the decision-makers of such as business.
Q: How do I explain this program to friends who might be interested in contributing towards my children?
A: It’s a great idea to speak to your friends and family in person about this Arizona state scholarship program. You are welcome to download our brochure (pdf) and also refer them to our website at ourladyofsorrows-academy.com/en/az-tax-credit for further details.