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May 21, 1999/6 Sivan 5759, Vol. 51, No.34
Tax credit for charitable gifts to be well-kept secret no longer
CHRIS GARIFO
Staff Writer
A new tax credit for donations to charity, which became available to Arizona taxpayers in the 1998 tax year, apparently remains one of the state's best kept secrets. That is a disappointment to the legislator who sponsored the bill creating the credit, so he's launching a marketing campaign to get the word out.
The Arizona Legislature approved the credit, proposed by Rep. Mark Anderson (R-Mesa), two years ago. It allows filers to offset up to $200 of tax liability for voluntary cash contributions made during the tax year to a charitable organization that helps the working poor. Few taxpayers seem to be aware of the credit, however, because it has drawn little media attention.
"Not as many people have taken advantage of the credit as I would have hoped because they don't know about it," commented Anderson, who arranged during state budget negotiations for a $400,000 appropriation to pay for the Department of Economic Security to market it.
Tax consultants said they saw few clients taking advantage of the credit in the first year it was available.
"It's the least-used credit of all," said Gordon Deibler of A&D Accounting in Glendale. "We haven't seen one person apply for it."
Deibler suggested that the reasons few taxpayers are taking the credit are that few even know it exists and many don't contribute enough to charity to be able to claim it.
Deibler said the child tax credit and the new credits for donations to private-school scholarship funds and public-school extracurricular activity funds were the most frequently taken credits.
The new charitable-contribution credit is available to people who donate up to $200 to an organization that spends more than 50 percent of its budget on services for Arizona's poor (those making less than 150 percent of the federal poverty level). The taxpayer must owe money to the state at tax time to take advantage of the credit, or wait to take the credit in a future year (up to five years later).
The $200 donated must be in excess of charitable contributions as itemized and deducted in a previous tax year, known as the baseline year. The default baseline year is 1996 if the taxpayer itemized and listed charitable contributions that year. If not, it is the first year after 1996 in which the taxpayer itemized and listed such a deduction.
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