Qualifying Charitable Organizations are certified by the Arizona Department of Revenue to receive contributions eligible for the tax credit. This certification only pertains to the Arizona tax credit program. To become a QCO, a charitable organization must serve Arizona residents who receive temporary assistance for needy families (TANF) benefits, are low-income residents whose household income is less than 150 percent of the federal poverty level or are chronically ill or physically disabled individuals. QCO’s must also spend at least 50% of its budget on qualified services to qualified Arizona residents.

Arizona provides two separate tax credits for individuals who make contributions to charitable organizations: one for donations to Qualifying Charitable Organizations (QCO) and the second for donations to Qualifying Foster Care Charitable Organizations (QFCO). Individuals making cash donations made to these charities may claim these tax credits on their Arizona Personal Income Tax returns. These tax credits provide dollar-for-dollar tax benefits, allowing taxpayers to reduce their state tax liabilities for each dollar donated to charities, up to the maximum allowable limits.

Some general guidelines for using the Arizona Charitable Tax Credit are as follows:

• An individual must make the gift (corporations, foundations, partnerships, etc., do not qualify).

• The gift must be made in cash (in-kind donations such as toys, books and services do not qualify)

• The maximum credit allowed for single taxpayers or heads of households is $495 and $987 for joint taxpayers.

You can visit the Arizona Department of Revenue website to a list of qualifying charities.

The maximum QCO credit donation amount for 2025 is $495 for individuals filing single, married couples filing separately or head of household. The maximum is $987 for married couples filing jointly. There is no minimum amount.

Yes! You can take advantage of ALL the tax credits (QCO, QCFO, STOs and Public Schools). Click here to learn more about all the tax credits available to you.

There are four steps to document your donation and claim your tax credits.

• Donate to a certified charitable organization (QCO or QFCO), such as a 501(c)(3) organization like New Freedom Project.

• Maintain a receipt of your gift with the QCO code to provide a copy with your tax return. New Freedom Project's code is 22770.

• Use Arizona Form 321, “Credit for Contributions to Qualifying Charitable Organizations” to claim your tax credit. The tax credit is available regardless of whether you itemize your taxes.

To claim your tax credit for the current tax year, Arizona tax credit donations must be made by April 15 of the following year. This gives you the flexibility to plan your contributions and ensure you receive the credit in a timely manner.

The tax credit only applies to your Arizona state income tax. However, you may be able to claim a federal tax deduction for the amount donated.

Yes, if your employer offers a payroll deduction plan for donations, you can make contributions directly from your paycheck to eligible Qualifying Charitable Organizations (QCOs). These payroll deductions simplify the donation process and allow you to make regular contributions throughout the year. While these deductions do not reduce your taxable income like some other pre-tax deductions, they do qualify for the Arizona Charitable Tax Credit, which reduces your state tax liability dollar-for-dollar based on the amount donated.

Reach out! We're happy to help answer any questions you may have!