Arizona offers a large number of tax credits for C-Corporations. If a business has an insurance premium of state tax liability, they can assist children to obtain a quality education by making a tax credit donation. Understanding the tax credit program facts and the steps will make it easier to get started.
Tax Credit Program Facts
All C-corps that a corporate income taxes in Arizona are eligible to participate in the tax credit program. It's important to note that corporations do not have to be the in the state. The only requirement is that they have insurance premium for state tax liability.
The donations are dollar-for-dollar against the state or insurance premium taxes due to the state by the Corporation. Corporations are not subject to any maximum amount when they choose to contribute. The state of Arizona does maintain an overall donation cap on an annual basis, however. Corporate tax credits are allowed to be used by corporations on a first-come/first serve basis. Once the cap is reached, corporations can no longer make a donation.
Corporations cannot designate a specific student when making tax credit donations, though they can recommend a specific school.
The Steps Involved with the Tax Credit Program
There are several easy steps that need to be followed when a C-corporation decides to take advantage of the tax credit program that focuses on the Arizona Tuition Connection.
If you are a C-Corp, the first step is to identify your company's insurance premium for income tax liability. From there, you need to determine how much you would rather donate as opposed to pay to the state. Should you wish to donate your entire corporate tax liability amount, you have the ability to do so – as long as the donation cap has not been reached.
You will then contact Tim Kuhn with the Arizona Tuition Connection. Similarly, you can choose to work with a CPA who will handle the details for you. Arizona Tuition Connection will then submit a form to the Department of Revenue in Arizona asking for the donations/credit to be approved. Once the approval has gone through, your donation amount must be provided to the organization within 20 days.
When you get ready to file your company's taxes at the end of the year, the corporate income tax credit will be taken on a few different forms. It will allow you to list the credit amount and ensure that you have shown the state that you have chosen to take a tax credit and help low-income and disabled children with educational scholarships.
A variety of qualified schools in the state looks to the Arizona Tuition Connection to provide funds. When you have a tax liability to deal with, it's important to realize that you have options. You can choose to file with and pay the state or you can choose to make a donation to an organization that truly needs the help.
Whenever you begin looking at tax credits, it's also important to work with an accountant. You need to learn more about the various options that are available to you and how it will impact your business. You can sit down with CPA to determine if the tax credits are going to be what's best for your business. Particularly with this tax credit program, the donations are a dollar-for-dollar tax credit.
Find out more about the C-Corp Tax Credit Program in Arizona by contacting Foster Financial CPA today. You can schedule a time to sit down and talk with a tax professional to learn more about what's best for your C-Corporation and get assistance with the tax credits.