Frequently Asked Questions
What is a School Tuition Organization, STO? Does the AZ Department of Revenue certify STOs?
A School Tuition Organization (STO) is one that is tax exempt under Section 501(c)(3) of the Internal Revenue Code and allocates at least 90% of its annual revenue to scholarships or grants, and makes its scholarships/grants available to students of more than one qualified school. AZEF has historically allocated over 90% or revenue received. AZEF is audited annually by an independent accounting firm and annually reports to the Arizona Department of Revenue (AZDOR) with statute required information. AZDOR certifies all school tuition organizations that are in compliance with the Private School Tuition Tax Credit Requirements. AZEF is certified by the Arizona Department of Revenue.
If my child has been recommended by a donor for a tuition grant, do I still need to submit an application?
Yes. Each student must submit an application each academic year in order to participate in the tax credit program. Donor recommendations are not the only factor that AZEF considers when allocating a tuition award.
When applying, is financial information required?
Yes. Financial information is required from families participating in the Private School Tuition Tax Credit Program. The State of Arizona requires specific financial reporting guidelines for school tuition organizations. Please see AZEF’s Application for more information.
What factors are considered when awarding a tuition scholarship? May we recommend someone else’s child? May we swap donations?
Several factors are evaluated. Such factors include but are not limited to: family needs (i.e.: financial, health, employment, etc.), recommendation from the participating school’s administration, parent’s participation in the school, and the students overall experience. The desire of the donor will be reviewed in determining the grant allocation. However, the recommendation of the donor is subject to the complete and sole discretion of AZEF.
Though student recommendations are allowed for both tax credits, the Original and the Switcher programs have different sets of qualifying criteria. Per Arizona Law, a student is only eligible to receive tuition awards under the Switcher Tax Credit if that student falls into one of the following categories:
Attended a 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;
Is enrolling in a private school kindergarten;
Is enrolling in a private preschool program for students with disabilities;
Is a dependent of a member of the armed forces of the United States who is stationed in Arizona pursuant to military orders;
Received for any year a scholarship under one of the above criteria OR from the low income corporate donation program or the disabled/displaced corporate donation program if the child continued to attend a private school in subsequent years
Do you make any special distributions?
Yes. Additional scholarship distributions will be made at the discretion of AZEF and recommendation of the school.
May a student receive funds from two or more school tuition organizations?
Yes. However, a student may only receive tuition tax credit awards up to the annual cost of tuition. Any excess funds must be returned to the last awarding school tuition organization.
What are the maximum credit limits, for tax year 2019 of the Original Credit and the Switcher Credit?
Tax Year 2019 Maximum Donation Amounts
Filing Single: $1,135
Filing Joint/Married: $2,269
What is the deadline to make a contribution in order to receive the tax credit?
Contributions can be accepted through April 15th for credit in the previous calendar year. A contribution must be either postmarked by April 15th or received online by midnight on April 15th to be eligible for credit in the previous calendar year.
Can a taxpayer claim the Private School Tuition Credit and the Public School Tax Credit?
Yes. You may also donate $200 individual/$400 married couple to the Public School of your choice. AZEF does not administer the Public School Tax Credit. Please contact the public school or school district of your choice for more information.
Where do I get the tax forms needed to claim the credit?
Arizona Forms 301, 323, and 348 are available by visiting the Department of Revenue website:
Does AZEF accept matching gifts from employers?
May we recommend a grandchild to receive a tuition grant?
Yes, as long as they are not a legal dependent.
Who may claim these tax credits?
These credits are available only to individuals who file Arizona state income taxes.
Is my donation also eligible for a federal income tax deduction?
Yes, AZEF is a federally tax exempt 501(c )(3) charitable organization. Your donation may be eligible for a federal deduction. You should consult your tax advisor for specific tax advice concerning deductibility for you.
How does the tax credit reduce my state income tax liability?
The credits may only be used to the extent they reduce a tax liability to zero. Any unused amounts may be carried forward for not more than five consecutive taxable years.
Disclaimer: These questions and answers are not intended to provide individuals with tax or legal advice. Interested persons should consult the Arizona Department of Revenue, the IRS, or their tax advisor for specific guidance relative to their particular tax situation.