Spotlight

2023 Arizona Tax Credit Update

January, 2024

As you review your charitable contributions for year-end, we’d like to provide you with an update on a few of the popular Arizona tax credits. Remember that only monetary donations can be applied toward these credits. That means the eligible donations must be made by cash, check, or credit card and do not qualify if made from an IRA. Be sure to request a receipt (including the entity tax credit code) and file it with the tax documents that you gather for us. Tax credit donations are no longer eligible for the federal charitable deduction but may be eligible as a state tax deduction on your federal tax return.

Below you will find links to lists of qualifying organizations and Arizona publications about the tax credits. We hope this is helpful and invite you to call if you have any questions about this or other tax matters. The following will apply to your 2023 individual income tax returns:

Public School Credit (Form 322):
The maximum credit allowed in 2023 is unchanged from last year. For single taxpayers and heads of household, the credit cannot exceed $200. For married taxpayers who file a joint return, the credit cannot exceed $400. Credit donations claimed for 2019 and later years must include the Public School CTDS Code. See the link below for the list of Arizona public schools and codes.
*A credit donation made between January 1 and April 15, 2024 can be claimed as a credit for either tax year 2023 OR tax year 2024.*
Fees paid to an Arizona public school for your child’s participation in extracurricular activities, character education programs, college standardized testing, career and technical industry certification, and CPR training are eligible for the credit.

Private School Tuition Credits (Form 323 and Form 348):
As in 2022, there are two credits available and such donations made between January 1 and April 15, 2024 can be claimed as a credit for either tax year 2023 OR tax year 2024.
For single taxpayers and heads of household, the credits cannot exceed $655 (Private School Tuition Organization aka Original STO Credit) plus $652 (Certified (Private) School Tuition Organizations aka Switcher STO Credit).
For married taxpayers who file a joint return, the credits cannot exceed $1,308 (Private School Tuition Organization aka Original STO Credit) plus $1,301 (Certified (Private) School Tuition Organizations aka Switcher STO Credit).
Remember, a taxpayer’s donation for the credit cannot be directed to benefit the taxpayer’s dependent. Also, credits are prohibited if the taxpayer is engaged in a ‘swapping’ agreement with another taxpayer. See Arizona Publication 707 (link below) for information about claiming a credit for donations made through an S corporation.

Qualifying Charitable Contribution Organization Credit (Form 321):
The maximum credit allowed in 2023 is now indexed for inflation. For single taxpayers and heads of household, the credit cannot exceed $421. For married taxpayers who file a joint return, the credit cannot exceed $841. Credit donations claimed for 2019 and later years must include the QCO code. See the link below for Qualifying Charitable Organizations and codes.
*A credit donation made between January 1 and April 15, 2024 can be claimed as a credit for either tax year 2023 OR tax year 2024.*

Qualifying Foster Care Charitable Contribution Organization Credit (Form 352):
The maximum credit allowed in 2023 is now indexed for inflation. For single taxpayers and heads of household, the credit cannot exceed $526. For married taxpayers who file a joint return, the credit cannot exceed $1,051. Credit donations claimed for 2019 and later years must include the QFCO code. See the link below for Qualifying Foster Care Organizations and codes.
*A credit donation made between January 1 and April 15, 2024 can be claimed as a credit for either tax year 2023 OR tax year 2024.*

Note of CAUTION regarding QCO’s and QFCO’s: Organizations may change from one type in 2023 to the other type in 2024. Make sure that you refer to the appropriate list for the year in which you actually make the contribution.

Arizona publication about the school credits (revised November 2022)

List of Arizona Public Schools and CTDS Codes (as of 12/26/2023)

List of Certified School Tuition Organizations (as of 01/08/2024)

Arizona Publication 710 about QCO & QFCO contribution credits (revised November 2022)

List of 2023 Qualifying Charitable Organizations (Updated 12/27/2023)

List of Qualifying 2023 Foster Care Organizations (Updated 12/27/2023)

Arizona Department of Revenue website for the latest versions and more information

2017 Earned Paid Sick Time

June 21, 2017

Click here for the full document.

This notice is to inform you of an important new law that goes into effect July 1, 2017. If you have any Arizona employees, please be aware that on this date employees begin to accrue paid sick time. The law requires employers to include a paid sick time benefit for all employees working in Arizona.

You can learn valuable information from the Industrial Commission of Arizona (the agency tasked with enforcement) at www.azica.gov. We have distilled the key points into an action plan below. Please note that if we process your payroll, we will need to know your selections so that we can begin the necessary tracking. You may have complicating factors or specific questions, and we are happy to help resolve them.

Count the number of employees on your payroll, including part-timers. If there are at least 15, you will need to provide up to 40 hours paid sick time per year for each employee. If there are fewer than 15 employees, you may qualify to offer a reduced benefit of 24 hours each. If you think you qualify for this, call us, since there is a look-back period to consider.
Determine how you would like to define a “year” for accrual purposes. Your choices are calendar year, fiscal year (ending on the month of your choice), or the employee hire date. This will become one of the elements of your policy. If you choose something other than the July 1 start date of this law, call us to calculate the prorated number of hours you will need to offer for the first year.
Determine if unused accrued sick time will be paid at the end of the year selected, or will be carried over for the next year. Unused, accrued time is not required to be paid at termination, but it does carry over and this does not reduce the amount to be accrued in the next year.
Many employers already offer some form of paid time off for vacations, personal days, or sick leave. You can integrate the new policy into your existing plan. Alternatively, you can add a new policy to cover these new paid sick time rules. The new law is probably more generous to employees, so if you are combining with your current plan, be sure you offer the required number of hours and availability.

Once you have decided these characteristics of your accrued paid sick time policy, you need to do the following to comply.

Adopt a sick pay policy and accrue 1 hour for every 30 hours worked. The maximum accrual for a year is 40 hours (24 hours if you have fewer than 15 employees.)
Notify employees in writing of the policy. You can do this by using a poster provided by the Industrial Commission of Arizona (www.azica.gov).
Begin accruing paid sick time hours starting July 1, 2017. Include information with employee paystubs showing hours accrued, paid, and available.
Keep records for four years.

Everyone will find special situations and circumstances. You may have complicating factors not covered in the legislation. Preliminary guidance is available for things like probationary employees, rehires within nine months of prior separation, legitimate uses of sick time and the employer’s ability to restrict it, loaning time to employees, requiring advance notice before authorizing paid sick time, and calculating pay rates when multiple rates apply for a particular employee.

If you have any questions about this important update, policy details or rules of compliance, please give us a call as we are happy to assist.

AEP® Press Release

September 30, 2016

Click here for the full document.

Anne V. Roediger, CPA and Anne C. Hoff, CPA are newly certified as Accredited Estate Planner® (AEP®) designees by the National Association of Estate Planners & Councils (NAEPC).

The Accredited Estate Planner® (AEP®) designation is a graduate level specialization in estate planning, obtained in addition to already recognized professional credentials within the various disciplines of estate planning. The AEP® designation is available to attorneys (JD), Chartered Life Underwriters® (CLU®), Certified Public Accountants (CPA), Certified Financial Planners™ (CFP®), Chartered Financial Consultants® (ChFC®), and Certified Trust and Financial Advisors (CTFA). It is awarded by the National Association of Estate Planners & Councils to recognize estate planning professionals who meet stringent requirements of experience, knowledge, education, professional reputation, and character. An AEP® designee must embrace the team concept of estate planning and adhere to the NAEPC Code of Ethics, as well as participate in a yearly renewal and recertification process.

The NAEPC is a national organization of professional estate planners and affiliated local estate planning councils focused on establishing and monitoring the highest professional and educational standards. NAEPC fosters public awareness of the quality services rendered by professionals who meet these standards. NAEPC builds a team approach involving cross-professional disciplines to better serve the public’s need for estate planning.

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