Switcher/PLUS/Overflow Tax Credit Law
Senate Bill 1047 – Effective as A.R.S. 43-1089.03 on August 2, 2012
43-1089.03. Credit for contributions to certified School Tuition Organization (PLUS/Switcher/Overflow tax credit law
A. A credit is allowed against the taxes imposed by this title for the amount of voluntary cash contributions by the taxpayer or on the taxpayer’s behalf pursuant to section 43-401, Subsection I during the taxable year to a School Tuition Organization that is certified pursuant to Chapter 16 of this Title at the time of donation. Except as provided by Subsection C of this section, the amount of the credit shall not exceed:
1. Five hundred dollars in any taxable year for a single individual or a head of household.
2. One thousand dollars in any taxable year for a married couple filing a joint returrn
B. A husband and wife who file separate returns for a taxable year in which they could have filed a joint return my each claim only one-half of the tax credit that would have been allowed for a joint return.
C. For each taxable year beginning on or after January 1, the Department shall adjust the dollar amount prescribed by Subsection A, Paragraphs 1 and 2 of this section according to the average annual change in the Metropolitan Phoenix Consumer Price Index published by the United States Bureau of Labor Statistics, except that the dollar amounts shall not be revised downwards below the amounts allowed in the prior taxable year. The revised dollar amounts shall be raised to the nearest dollar.
D. If the allowable tax credit exceed the taxes otherwise due under this Title on the claimant’s income, or if there are no taxes due under this Title, the taxpayer may carry the amount of the claim not used to offset the taxes under this Title forward not more than five consecutive taxable years’ income tax liability
E. The credit allowed by this Section is in lieu of any deduction pursuant to Section 170 of the Internal Revenue Code and taken for state tax purposes
F. The tax credit is not allowed if the taxpayer designates the taxpayer’s contribution to the School Tuition Organization for the direct benefit of any depended of the taxpayer or if the taxpayer designates a student beneficiary as a condition of the taxpayer’s contribution to the School Tuition Organization. The tax credit is not allowed if the taxpayer, with the intent to benefit the taxpayer’s dependent, agrees with one or more other taxpayers to designate each taxpayer’s contribution to the School Tuition Organization for the direct benefit of the other taxpayer’s dependent.
G. For the purposes of the Section, a contribution, for which a credit is claimed, that is made on or before the fifteenth day of the fourth month following the close of the taxable year may be applied to either the current or preceding taxable year and is considered to have been made on the last day of that taxable year.
H. A taxpayer may not claim a credit under this section and also under Section 43-1089 with respect to the same contribution.
If a taxpayer’s contribution to a School Tuition Organization exceeds the amount of the credit allowed under Section 43-1089, a taxpayer may claim a credit under this section and also under 43-1089. If a taxpayer’s contribution to a School Tuition Organization does not exceed the amount of the credit allowed by Section 43-1089, the contribution is considered to have been made pursuant to Section 43-1089.
43-1603. Section E & F. Operational Requirement
E. A TAXPAYER'S CONTRIBUTION TO A SCHOOL TUITION ORGANIZATION THAT EXCEEDS THE AMOUNT OF THE CREDIT ALLOWED BY SECTION 43-1089 BUT DOES NOT EXCEED THE AMOUNT OF THE CREDIT ALLOWED BY SECTION 43-1089.03 IS CONSIDERED A CONTRIBUTION PURSUANT TO SECTION 43-1089.03. A SCHOOL TUITION ORGANIZATION MUST USE AT LEAST NINETY PER CENT OF CONTRIBUTIONS MADE PURSUANT TO SECTION 43-1089.03 FOR EDUCATIONAL SCHOLARSHIPS OR TUITION GRANTS FOR STUDENTS TO WHOM ANY OF THE FOLLOWING APPLIES:
1. ATTENDED A GOVERNMENTAL PRIMARY OR SECONDARY SCHOOL AS A FULL- TIME STUDENT AS DEFINED IN SECTION 15-901 OR ATTENDED A PRESCHOOL PROGRAM THAT OFFERS SERVICES TO STUDENTS WITH DISABILITIES AT A GOVERNMENTAL SCHOOL FOR AT LEAST NINETY DAYS OF THE PRIOR FISCAL YEAR AND TRANSFERRED FROM A GOVERNMENTAL SCHOOL TO A QUALIFIED SCHOOL.
2. ENROLLS IN A QUALIFIED SCHOOL IN A KINDERGARTEN PROGRAM OR A PRESCHOOL PROGRAM THAT OFFERS SERVICES TO STUDENTS WITH DISABILITIES.
3. IS THE DEPENDENT OF A MEMBER OF THE ARMED FORCES OF THE UNITED STATES WHO IS STATIONED IN THIS STATE PURSUANT TO MILITARY ORDERS.
4. RECEIVED AN EDUCATIONAL SCHOLARSHIP OR TUITION GRANT UNDER PARAGRAPH 1, 2 OR 3 OF THIS SUBSECTION OR UNDER CHAPTER 15 OF THIS TITLE IF THE STUDENT CONTINUES TO ATTEND A QUALIFIED SCHOOL IN A SUBSEQUENT YEAR.
F. IN AWARDING EDUCATIONAL SCHOLARSHIPS OR TUITION GRANTS FROM CONTRIBUTIONS MADE PURSUANT TO SECTION 43-1089.03, A SCHOOL TUITION ORGANIZATION SHALL GIVE PRIORITY TO STUDENTS AND SIBLINGS OF STUDENTS ON A WAITING LIST FOR SCHOLARSHIPS IF THE SCHOOL TUITION ORGANIZATION MAINTAINS A WAIT