Arizona’s “Private School Tax Credit Law” helps make a high quality, Phoenix private elementary and middle school education affordable.
An Arizona State Tax Law provides families a vehicle to afford private school tuition for students in Kindergarten through 12th grade. The Arizona Private School Tax Credit can help pay YOUR tuition.
The state of Arizona authorizes non-profit organizations to administer the Private School Tax Credit. These companies are called “Student Tuition Organizations, (STO’s)”.
Summit School of Ahwatukee predominately partners with two STO’s, The Institute for Better Education (IBE) and Arizona Tuition Connection (ATC) However, we are able to work with many student tuition organizations.
The Private School Tax Credit law allows Arizona tax payers (other than a student’s parents) to allocate a limited amount of state taxes each year into your family’s account at an STO. The STO then sends the donations in your family’s account to a private school like Summit School of Ahwatukee to help pay your child’s tuition.
Arizona taxpayers who donate into your family’s account receive a dollar-for-dollar tax credit on their Arizona State tax return. Their donation can reduce the tax payment to the state, or increase a state refund, dollar-for-dollar. It costs donors nothing to help you afford a high quality private school education!
Donations made by April 15th of 2017 may be applied as a tax credit on the 2016 Arizona tax return, and may be eligible to be claimed as a charitable donation on the 2016 federal tax return.
IMPORTANT: By law parents cannot make tax credit donations into their own family’s account, nor can families trade donations with other families.
Three vehicles are available through a student tuition organization (STO) to help pay tuition, giving all families access to high quality private school education:
- Individual & Plus / Switcher Funds Family Accounts
- Financial Aid Scholarships
- Corporate Scholarships
Setting up an Account through a Student Tuition Organization (STO)
Families who wish to collect tax credit donations to help pay private school tuition, must first establish an account at an STO. Online and paper applications are available on each STO website. Applications must be updated annually.
Soliciting Tax Credit Donations into your Family Account
It is the family’s responsibility to contact Arizona taxpayers: family, friends, co-workers, neighbors, asking them to allocate their Arizona State tax dollars toward your children’s private school education, by donating directly through the STO.
Both The Institute for Better Education (IBE) and Arizona Tuition Connection (ATC) have tools and resources on their websites that can help you educate and solicit potential donors, to fund your child’s education.
Resources at IBE: Sample donor letter from IBE FAQ for donors from IBE
Resources at ATC: A Video_ Sample donor letter_ Personal Landing page for your child
Remember: Donors receive a dollar-for-dollar credit on the Arizona state tax return: increasing their Arizona state tax refund, or decreasing the amount owed on the Arizona return. Donors recommend that your student(s) receive the donation.
Family Accounts may be established and funds solicited beginning one year before a child starts kindergarten.
Eligibility: Original versus Plus Funds
- “Original Funds”: All students enrolled in private school can receive donations in “Original Funds”. This includes students enrolled in private school, or planning to enroll for the following school year, transferring from a public school or families in Arizona on military orders. Families may begin collecting Original Fund donations the year before a child starts kindergarten.
- “Plus Funds” also called “Switcher Funds”: May only be donated to students enrolled in private school in 2012 or after who:
- collect plus / switcher funds in their first year in private school.
- are entering kindergarten
- transferring from public school
- are on active military orders
IMPORTANT for students eligible to use the “Plus / Switcher Fund”
- Families must have at least one donor contribute the entire amount allowed in the “Original Fund” and at least $1 into a student’s “Plus / Switcher Fund” in the first year the student is enrolled in a private school.
- If a student does not receive both an “Original” and “Plus / Switcher Fund” donation in the first year at private school, the student will only be able to receive donations into the “Original Fund” through high school.
The amount Arizona taxpayers can allocate annually into your family’s STO account
Donations made by April 15, 2017 are credits on the 2016 Arizona Tax Return.
- “ORIGINAL fund” donations allowed for 2015
- Married Arizona tax payers: a maximum of $1,090
- Single Arizona tax payers: a maximum of $545
- “PLUS / SWITCHER fund” donations: NOTE: Plus fund donations can only be made after a donor funds the full “Original” donation amount.
- Married Arizona tax payers may donate a maximum of $2,173: ($1,090 in the “Original” fund and another $1,083 in the “Plus / Switcher” fund)
- Single tax payers can donate up to $1,087 annually: ($545 in the “Original” fund and another $542 in the “Plus / Switcher” fund)
- Restrictions: By law, parents may not donate into their own account, nor “swap” donations with others.
There is no limit to the number of Arizona tax payers contributing into your family’s account each year. Nor is there a limit to the total amount of donations into a family’s individual recommended funds account.
Financial Aid Scholarships
Each year Student Tuition Organizations, STO’s such as Arizona Tuition Connection and The Institute for Better Education may have limited funds available that were not designated to or used by specific students. These excess funds are awarded as needs-based scholarships to private school students, at the discretion of the STO.
Each year STO’s may have limited funds available from corporate donations. These funds are award to eligible students. To qualify, family income must fall within specific income guidelines. See the STO websites for details.
To be eligible for a Corporate Scholarship, a child must receive a Corporate Scholarship for the first time in the year that a child begins kindergarten, or transfers from a public school.
1. Once your child becomes eligible and receives a corporate award you MUST re-apply and be given a corporate award every year after (from any School Tuition Organization, or they will become ineligible to receive corporate funds in the future.
2. The deadline for Corporate Scholarship awards varies with each STO.
3. Availability of corporate scholarships is dependent upon the amount of corporate contributions received by each STO.
How Recommended Fund donations are released to pay your family’s tuition:
1. The STO used by your family will advise Summit School of Ahwatukee of funds in your family’s recommended funds account.
2. Monies will only be released to Summit School of Ahwatukee by the STO only if there is outstanding tuition balance for the current school year. Summit School’s Business Office will notify the family via email upon receipt of funds from the STO.
4. IMPORTANT: In compliance with the Private School Tax Fund Law of Arizona, Summit School of Ahwatukee is not able to refund tuition paid by parents, replacing the payment with an STO award. Any unused STO recommended funds awarded to a child/family during a school year will remain with STO, in the family’s account for the next year’s school tuition. This may change dependent upon legislative action.
All personal information that you are required to submit to an STO and all reporting from the STO to Summit School of Ahwatukee will be kept confidential within Summit School of Ahwatukee Business and Admissions Office.
The information provided regarding The Private School Tax Credit program is believed to be current, and is provided as a guideline only. All applicants are encouraged to carefully consult the websites of the STO’s used by the family and to follow the instructions and deadlines provided by each STO.