We are very excited that Detour Company Theater has been approved as a Qualified Charitable Organization (QCO)! This designation allows Arizona residents to receive a tax credit for donations up to $400 ($800 for married couples filing jointly). Tax credits directly reduce the amount of tax you owe, giving you a dollar for dollar reduction on your tax liability & allow you to support Detour’s mission!
1. Donate to Detour HERE
2. Maintain a receipt of your donation in order to provide a copy with your tax return.
3. Complete the relevant tax form to claim your credit: Arizona Form 321 for donations to QCOs.
4. Subtract your tax credit from your state tax liability when you file your Arizona state tax return.
Tax credits directly reduce the amount of tax you owe, giving you a dollar-for-dollar reduction of your tax liability. A tax credit valued at $400, for instance, lowers your tax bill by the corresponding $400.
Contributions to nonprofits have always been tax deductible. A tax credit is a full refund of your money!
A donation to a charity may be used as a tax deduction. A deduction, however, can only lower your taxable income and the tax rate that is used to calculate your tax.
A tax credit, on the other hand, reduces the amount of tax you owe, giving you a larger refund of your withholding. Example: If a single individual owes $2000 in taxes but donates $400 to a qualifying charitable organization, his tax liability is reduced to $1600.
Then you won’t get the benefit of a tax credit this year, but you will be able to carry over the unused credit to future years. Talk to your tax specialist. Of course, you can still donate to Detour if you pay no Arizona income tax…you just don’t get the benefit of the credit this year.
Yes! Let’s say you prepare your annual tax forms and your total AZ tax liability was, say, $1,000. And, during the year, your employer withheld $1,200 from your paycheck. You are expecting a refund of $200. If you, as an individual, make your $400 contribution to Detour…your refund is now $600!
Some. Another example: you prepare your taxes and your Arizona tax liability is $300. Your employer withheld…whatever, it doesn’t matter. If you, as an individual, make a $400 contribution to Detour, you will get a tax credit of $300 and the balance ($100) will carry over into next year’s taxes.
When you complete your Arizona tax return, Form 321 will be added. It will ask for the name of the charity (Detour Company Theater) and the Qualifying Charity Code (22244).
Keep those expectations very low! Please talk to your tax professional. The 2017 Tax Cuts and Jobs Act severely restricted the ability to take a federal deduction on charitable contributions that generate a state tax credit.
This is a great opportunity to help Detour Company Theatre advance our mission and reach even more people who might benefit from the great works we do. You can make a donation all the way up to April 15th of 2021 for the 2020 tax year.
Click here for more information from the Arizona Department of Revenue website.
Consult your tax advisor for details and advice on your specific situation.