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 $470 ($938 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!
HOW DOES IT WORK?
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.
2024 AZ QCO Tax Limits: $470 for Single taxpayers and $938 for Married taxpayers.
WHAT IS A TAX CREDIT?
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.
ARE THERE ANY RESTRICTIONS?
Donations must be made by individuals (corporations, foundations, partnerships, etc. do not qualify).
Donations must be made in cash (property donations do not qualify, nor do in-kind donations such as toys, books and services).
Credits that are not applied to tax obligations for the current tax year can be carried forward to future tax years (more on that below).
WHY IS A TAX CREDIT BETTER THAN A TAXABLE DONATION?
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.
OTHER ARIZONA TAX CREDITS
What about the tax credit I use to give to my grandchild’s private school? You can still do that! Actually, there are 2 credits…the Private School Tuition credit and the Certified School Tuition Organizations credit. Both are totally separate tax credits from Detour’s QCO credit. You can make separate gifts to all 3 organizations!
What about the tax credit I use to give to my grandchild’s public school? You can still do that! That’s the $200/$400 Public School Tax credit and is totally separate.
What about the tax credit I use to give to foster care? You can still do that! That’s the $500/$1,000 Qualifying Foster Care Charitable Organization and is totally separate.
What about the tax credit I use to give to the Boys & Girls Club, or Phoenix Rescue Mission, or Big Brother/Big Sisters, or…? Those are also QCOs like Detour and, yes, a gift to Detour would lower the gift amounts available for the credit to those organizations. If you’re currently supporting any of those wonderful charities on the same list as Detour (link above), that is fantastic and we THANK YOU for making a difference in the community.
What about that one credit… Yes, there are many, many Arizona tax credits available (Renewable Energy, University Research, etc). Those are all separate from the QCO credit. Please confer with your tax preparer or specialist for specifics around your tax planning.
WHAT IF I DON'T PAY ANY ARIZONA STATE INCOME TAXES?
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.
WHAT IF I HAD AZ INCOME TAX WITHHELD FROM MY PAYCHECK
& I’M EXPECTING A REFUND--DO I GET THE CREDIT?
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!
WHAT IF I PAY A LITTLE BIT OF ARIZONA STATE INCOME TAXES
…DO I GET THE CREDIT?
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.
HOW DO I CLAIM MY ARIZONA TAX CREDIT?
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).
DO I GET A DEDUCTION ON MY FEDERAL TAX RETURN?
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 2025 for the 2024 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.
