S-Corp Donors

S-Corporation Tuition Tax Credit Program

With this program your corporate tax dollars can be turned into scholarships providing much needed assistance for low income or disabled/displaced kids attending private schools in Arizona.  It is an incredible program because it is a dollar-for-dollar credit against taxes your shareholders would normally pay to the state; it doesn’t take away from your bottom line or other philanthropic programs you are involved with.

Arizona Tax Credit Program Facts

  • The S-Corp makes a donation to Arizona Tuition Connection.
  • Arizona Tuition Connection is a state approved, non-profit, School Tuition Organization (STO) that works with all qualified private schools in Arizona.  EIN #46-1879761
  • Minimum donation of $5,000.00.
  • Tax credit is available to an S-Corp as defined in Section 1361 of the Internal Revenue Code.   LLC’s taxed as S-Corps for federal and state purposes are eligible to make a donation for the tax credit.
  • The donation must be made from the S-Corp to the STO.
  • The S-Corp makes an irrevocable election to pass a pro-rated share of the credit, based on the individual’s ownership interest, through to its individual shareholders to claim as a credit on their individual income tax return.   Unused tax credits can be carried forward for 5 years.
  • Any prorated share of the credit that would be distributed to non-eligible partners or estates or trusts are lost.
  • Donated funds are used to provide much needed tuition scholarships for low income and disabled/displaced families attending K-12 private schools in Arizona. The state has specific guidelines and regulations surrounding the distribution of these funds. Details of which we will gladly provide.
  • The state has a cap of $74.300 million in low income and $5 million dollars in Disabled Displaced corporate donations.
  • The window to take advantage of these tax credits opens July 1st, 2017 and may close down quickly as the cap is met.   We would like to have your paperwork filled out and ready to turn in by June 15th so we are ready to go by the first day donations can be accepted.
  • If they choose, corporations may recommend a school to receive their donations.  However, the Corporation’s shareholders may not directly benefit from the donation.

About Arizona Tuition Connection:

We are not tied into any single school, denomination or organization.  We work with every qualified school in the state.

Our Core Values

·         Honor God in all we do.

·         Serve our community and each other.

·         Always act with honesty and integrity.

·         Give the people we come in contact with more than they expect.

·         Communicate clearly, openly and often.

·         Strive to build long term relationships.

·         Be humble.

Steps to Donating

  1. Identify your company’s corporate income tax liability and determine how much you would like to donate versus pay to the state this fiscal year. (Your company can donate the ENTIRE corporate tax liability amount.)
  2. Contact Tim Kuhn at tim@arizonatuitionconnection at 480-409-4106.
  3. On July 1st, Arizona Tuition Connection will file a one-page form with the Department of Revenue (ADOR), asking for approval for the donation/credit.
  4. Once approval has been received from the ADOR, the donation amount must be provided to Arizona Tuition Connection from the corporation within 20 days.
  5. When you file your company’s taxes, you will take the corporate income tax credit on the Standard 120 Form and file a 335 Form as well, listing the credit amount.

S-Corp Reporting Requirements

  • The S-Corp can pass the credit onto their shareholders based on the ownership interest in the corporation.
  • The S-Corp does not need to have tax liability in order to pass the credit onto shareholders.
  • The S-Corp will pass the credit onto the shareholder at the end of their fiscal year/tax year.  The individual shareholder would claim the credit on their tax return for the year in which the S-Corps fiscal year ends. The individual taxpayer would claim their share of the credit in the year the taxes are passed through.
  • For low-income corporate donations – Form 335 and Form 335-S will be completed by the S-Corp and submitted with their 120S. A copy of Form 335-S is also to be forwarded to the shareholders.
  • For disabled/displaced corporate donations – Form 341 and Form 341-S will be completed by the S-Corp and submitted with their 120S. A copy of Form 341-S is also to be forwarded to the shareholders.

Individual Shareholder Reporting Requirement

  • There is no limit on the low-income or disabled/displaced credit claimed by the individual taxpayer. If the taxpayer’s share of the S-Corp credit is $3,000 then their credit will be $3,000.
  • For low-income corporate donations – Form 335-S will be completed by the S-Corp and forwarded to the shareholders. The individual taxpayer will claim their share of the credit on Form 335-I.
  • For disabled/displaced corporate donations – Form 341-S will be completed by the S-Corp and forwarded to the shareholders. The individual taxpayer will claim their share of the credit on Form 341-I.
  • These new credits will not impact the individual taxpayer’s ability to claim the original or switcher individual credits.
  • An individual taxpayer in tax year 2016 could claim the maximum original and switcher credits of $2,173 plus their share of the S-Corp corporate credits.
  • The individual taxpayer may carry forward any unused credit for 5 years.
  • For disabled/displaced corporate donations – Form 341 and Form 341-S will be completed by the S-Corp and submitted with their 120S. A copy of Form 341-S is also to be forwarded to the shareholders.

Have questions? We are here to help. Please contact us at 480-409-4106.

 

 

 

 

 

 

Get in Touch with Us

Address:
11445 E. Via Linda, Suite #2 – 145, Scottsdale, AZ 85259

E-mail: info@arizonatuitionconnection.com

Phone:
(480) 409-4106

 

A SCHOOL TUITION ORGANIZATION CANNOT AWARD, RESTRICT OR RESERVE SCHOLARSHIPS SOLELY ON THE BASIS OF A DONOR’S RECOMMENDATION. A TAXPAYER MAY NOT CLAIM A TAX CREDIT IF THE TAXPAYER AGREES TO SWAP DONATIONS WITH ANOTHER TAXPAYER TO BENEFIT EITHER TAXPAYER’S OWN DEPENDENT.