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December 24, 2004/Tevet 12 5765, Vol. 57, No. 17
Tax credits help working poor
Donations assist agencies serving the less fortunate
STEPHANIE N. HENSCHEL
Staff Writer
It is a sad but true fact that at least 12 percent of the U.S. population lives at or below the official poverty level. Most of them are children, or adults who are unable to work.
According to the Institute for Research on Poverty, 13.9 percent of the population residing in the state of Arizona fell at or below the poverty line during the 2001-03 cycle.
But despite the seemingly overwhelming statistics, there is something that can be done.
In 1998, the Arizona State Legislature passed a law that established the Arizona Charitable Tax Credit for the Working Poor. This credit allows for contributions to nonprofit, charitable organizations that spend at least 50 percent of their budgets on services to state residents who receive temporary assistance or who earn less than 150 percent of the federal poverty level.
In the Jewish community, three agencies participate in the working poor tax credit program: Jewish Free Loan Association of Greater Phoenix, Jewish Family & Children's Service, and Kivel Campus of Care.
At Kivel, funds from the tax credit go toward those residents living in one of the 250 apartments classified under the HUD Housing category. According to Phyllis Hill, development coordinator of the assisted-living care facility, the funds help to underwrite the food program, as well as assist in housing.
"It's essential to our fund-raising program," she said. "It's a good way, an easy way, for Kivel to receive funds to help."
Assistance is one of the goals of the tax credit.
"We make loans to people who are working but fall into the category where they need extra help," said Selma Fiel, executive director of the Free Loan Association. "We use the funds people donate to us through the tax credit to help the working poor become productive members of society by retaining their independence."
Fiel said the agency provided assistance with such things as rent, utilities and other debts.
Shlomit Sholem, director of special events at JFCS, said funds from the tax credit help her organization provide services for the working poor, such as skill-building seminars, counseling and emergency assistance.
"We can use the money to do a lot of good in the community," she said.
Sholem said the idea is to help those families in need "help to build healthy, stable home environments."
The tax credit uses the charitable contributions made in the 1996 tax year as a baseline if an itemized tax return was used that year. If not, the first year since 1996 where an itemized return was used is considered the baseline. Any additional charitable contributions over that baseline are eligible as a tax credit.
Once that baseline is hit, up to $200 total donated to the tax credit for the working poor can be claimed dollar-for-dollar against state income tax. A portion of the donation can also be deducted from federal tax.
The working poor tax credit can be used in addition to the Jewish Community Day School Scholarship Fund credit, which allows for up to $500 for single taxpayers, and $625 for married taxpayers.
Sholem said the tax credit is good because everyone benefits.
"We can provide many services we otherwise couldn't provide," she said. And, "you actually don't spend any money while doing a lot of good."
Dec. 31 is the deadline for tax credits to be used this year.
Contact the writer here
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