With April tax deadlines looming for individuals and families, there is still time to attribute your tax credits to any number of very noble local nonprofits. Whether it an organization that focuses on food insecurity, healthcare, child development or for many of us, supporting K-12 education, the ability to give of your tax credits makes a huge impact each year.
But for businesses planning out their next fiscal year, there exists an option to give of their tax credits that many aren’t aware of and makes a lasting difference; all without impacting your bottom line and directly advancing one of the most important causes we have in Arizona – education.
In 2009, a corporate tax tuition credit program was established for C and S corporations who conduct business and have income tax liability or insurance premium tax liability here in Arizona, but don’t have to be headquartered here. The program began with an annual limit of $40 million, but has now grown to more than $140 million.
In short, corporations, and insurance carriers have ability to donate a portion, or all, of their annual AZ income tax or AZ insurance premium tax liability and receive a 100% dollar for dollar tax credit. A win-win for everyone!
However, when I founded Academic Opportunity of Arizona (AOA) in 2013 and started outreach to Arizona businesses, many were unaware of this option and opportunity to donate potentially large sums of money. Given Arizona generally ranks very low in education rankings, this additional funding stream is imperative to improving educational opportunities for students across the state.
Best of all, this process can be completed very easily. Upon commitment to a school tuition organization we (AOA) file all paperwork needed with the Arizona Department of Revenue so no additional resources have to be exhausted by the corporate donor.
Just a few weeks ago, we along with supporters from Cigna and U-Haul, surprised 17 families notifying them of their receipt of full scholarships for their children who live with developmental disabilities. Overall, we were able to award 75 scholarships around the state. The pure joy, and relief, displayed by the parents was heartwarming as they try to create the best educational outcomes for their children. And these were just a few of the more than 600 students and families that we have had the pleasure of working with, providing scholarships for those under financial hardship or have a developmental disability like autism.
With education funding here in Arizona always scarce, these corporate tax donations open doors and opportunities for families to the benefit of their children. All while giving the donor satisfaction of knowing their growth and commitment to our community has yielded the tax liabilities to give without impacting their bottom line or having to launch a foundation or charitable arm.
There are limitations to what each corporation can give, but when more than $140 million is made available for school tuition organizations like Academic Opportunity of Arizona to distribute, large-scale impact is made. Especially when in our case, full scholarships are given allowing peace of mind for parents to not have to seek multiple scholarships to keep their child in the school of their choosing. But more importantly the one that has the resources to help them succeed in their educational journey.
So although corporate fiscal years vary widely, I would implore those who have influence within their companies to challenge their leadership to look into this very viable, very sustainable and bottom line friendly corporate tax tuition credit program. As we set to open our scholarship request portal for the 2022/2023 school year year in April and with a waiting list of more than 1,200 from last year, we along with other school tuition organizations across our state will work tirelessly to make sure those dollars get into the hands of families and students who truly need it most.
Chad Bays is the founder and CEO of Academic Opportunity of Arizona, a 501(c)3 non-profit school tuition organization.