So, you’re wondering whether your child should be on ESA or take advantage of the tax credit program?
Here’s what parents should know:
Both programs offer financial support for private school students in Arizona, but they work very differently. With the ESA Program the state guarantees a set amount of tuition funding for each student in K through 12 private schools.
The good news is that ESA funding is guaranteed. Your family cannot be turned down.
But here’s the catch: The ESA scholarship amount is usually less than the cost of your child’s tuition, that means you’ll likely need to cover the balance of your tuition out of your own pocket.
Now, let’s talk about the Tax Credit Program. It works differently. There’s no guaranteed funding. Instead, the scholarship money comes from donations where your family is recommended to receive those funds.
The good news is that If you educate yourself and use the tools, we have available, it is possible to get 100% of your child’s tuition covered, so you can have no out-of-pocket expenses.
What’s the best approach for your family?
Because it is possible to get your tuition paid for using tax credits, more of the families we work with are using tax credits than ESA, but the final decision comes down to a few things.
- If your child is attending a school where your tuition is less than the ESA amount, we would recommend that you use ESA. It is an easy way to get all of your tuition paid for.
- If you are new to this program and don’t have a pool of funds being donated where your family is recommended to receive those funds, you also would want to stay on ESA, but only until you build a pool of funds that is larger than your ESA amount.
The year that you build a pool of tax credit funds that is larger than your ESA amount, pull your child off ESA and take tax credits. With the maximum donation limits as high as they are now, it does not take many donations to accumulate more tax credit scholarship funding than your ESA amount.
If you already have a pool of tax credit donations larger than your ESA amount, stay on tax credits.
Also if your child is eligible for low-income corporate scholarships, don’t take ESA. Your child will get more funding through the tax credit program.
A key thing every parent needs to understand is don’t stop getting tax credit donations where your family is recommended to receive those funds. You can use them now instead of ESA, or we can hold them for a future year, when your child is attending a school where tuition far exceeds the ESA amount. We want to be very clear that the mistake you want to avoid is using ESA without building your pool of tax credit donations.
If you have chosen to use ESA for your child this school year, we encourage you to still get tax credit donations where your child is recommended to receive those funds.
In order for us to allocate and hold funds for your child, you have to do two things:
First, your child has to remain in private school. If you move them to a public, charter or home school, even for a day, we can’t allocate the funds to your family.
Next, you have to keep a current application with Arizona Tuition Connection. You can go complete your application on our website or by calling us at 480-409-4106.
If you do these two things we can allocate funds for your child through 12th grade.
To view video in Spanish, click here.
Although the law allows a student to start the school year on ESA, and then move to tax credit scholarships at the end of any quarter, most schools will not allow it. So, if you are thinking of making this change please discuss it with your school first.
Like most schools, we encourage parents to pick either ESA or tax credits scholarships for an entire school year. Each summer you can evaluate what is best for your family for the upcoming year.
As a reminder, we strongly encourage all parents to continue to get tax credit donations, no matter if their family is on ESA or tax credits.
To view the video in Spanish, click here.
Your strategy for maximizing your child’s scholarship funds will vary depending on the income of your family.
If your family is blessed with a higher income, the best strategy is to utilize the guaranteed ESA funding until your tax credit donations exceed your ESA amount. In the year we are holding more in tax credit donations than your ESA amount, switch from ESA to using your allocated tax credit funds. For example, if the ESA amount is $7,000, continue using ESA until you accumulate more than $7,000 in tax credit donations for your child.
Also, for higher-income families, we recommend picking just one School Tuition Organization to work with, you will find it is much simpler.
If your family is low to middle-income, they may be eligible for low-income corporate scholarships. The best strategy for your family is to apply to multiple School Tuition Organizations receiving low-income corporate scholarships from each.
Additionally, it is important to continue to solicit tax donations where your child is recommended to receive those funds. The combination of corporate low-income scholarships combined with donated funds typically provides more funding than using ESA.
If you have questions on a strategy for your family, please reach out to Arizona Tuition Connection, we are here to help.
To view video in Spanish, click here.
We currently offer 3 convenient ways to apply for scholarships.
- Online. You will start by creating an online profile so that you can save progress and revisit your applications. Apply online here.
- Apply-by-Phone. If you would prefer to have one of our team members assist you this process, you can call us at: (480) 409-4106, or make an appointment by clicking here. Please be prepared to provide the gross income for each member of your household matching the previous year’s tax filing.
- Download a paper application. Once completed, you can mail to:
11445 E Via Linda #2-145
Scottsdale AZ, 85259
Or scan and email to: applications@arizonatuitionconnection.com
To view video in Spanish, click here.
The year before your child enters private school is the ideal time to begin securing tax credit donations. For many families, this means when your child is 4 years old or in 8th grade. If we receive tax credit donations recommending your child as a beneficiary during that year, we can hold the funds and allocate them in future years.
If you missed the opportunity to start early, the next best time is now. So Apply – Educate Yourself – Get your tools ready and start a conversation with your social network about redirecting their taxes to your family’s tuition.
To view video in Spanish, click here.
We can award tax credit scholarships to students attending any private school in Arizona. Please note that these funds are primarily intended for students in Kindergarten through 12th grade.
To view video in Spanish, click here.
There are four scholarships available through this tax credit program. Most students enrolled in private schools in Arizona can qualify for at least two of them, and depending on your family’s circumstances, you may be eligible for more.
However, if your child is receiving ESA funds, they cannot, by law, receive tax credit scholarships at the same time.
Once you complete your application with Arizona Tuition Connection, our team will email you with details on which scholarships your child is eligible to receive.
To view video in Spanish, click here.
Arizona Tuition Connection has no application deadlines, so it’s never too late to apply. However, the sooner you submit your application, the better, as we cannot award scholarships without a completed application.
We typically start taking applications for the upcoming school year after May 15th.
To view the video in Spanish, click here.
There are four types of scholarships available through the Arizona tax credit program. Original and Switcher Scholarships are funded by individual donations and are available to most every child attending private K through12 schools in Arizona.
Parents can significantly influence the size of these scholarships by securing more donations that recommend their family as recipients.
The Low-Income Corporate Scholarships and Disabled and Displaced Scholarships are funded by corporate donations. As their names suggest, these scholarships support families with low to moderate incomes and children with disabilities or those in the Arizona foster care system. To qualify for low-income scholarships, parents must provide a copy of their previous year’s taxes. For children with disabilities, an IEP or MET must be submitted with the application.
Once you complete your application you will receive a email from us, confirming what scholarships your students qualify for.
There is only one application. Simply complete that application and our team will determine which scholarships your child is eligible to receive.
We encourage all parents to educate themselves, use the tools we offer, and ask their social contacts to donate and recommend those funds to go to their family.
It is not a good strategy for parents to exclusively expect scholarships from a pool of general funds, those are given out taking a variety of criteria into account:
including the school, income of your family and how much your family is participating in our programs.
Our goal is to award scholarships on a monthly basis. About a week after the scholarships are awarded to the school, we send parents an email with all the details of the award.
The main factor that can delay the scholarship process is incomplete applications from parents. Ensuring your application is fully completed will help avoid delays and ensure timely scholarship awards.
Arizona Tuition Connection uses the recommendation of the donor as the primary criteria for awarding scholarships. It is important for parents to understand not every child is eligible for every type of scholarship.
The first thing parents must understand is how donations are categorized.
When donations are received from individuals, Arizona Tuition Connection must categorize those donations as available to be used for two different types of scholarships. For donations coming in from married couples for the 2024 tax year, the first $1,459 of each donation must be used for Original Scholarship Awards. Any amount over $1,459 (up to an additional $1,451) must be used for Switcher Scholarships. For singles who donate, the first $731 must be used for Original Scholarship awards, with any amount over (up to an additional $728) going towards Switcher scholarships.
For example: If we receive a donation for $2,000 in the 2024 tax year from a married couple, $1,459 will be available for Original scholarships and $541 will be available for Switcher scholarships.
The next thing for parents to understand is what type of scholarship awards their child is eligible for – Original, or both Original and Switcher. This information is part of a previous FAQ question in this section.
If your child is not switcher eligible, we cannot award your child a switcher scholarship even if your child has been recommended to receive those funds. If your child is switcher eligible, then they would be eligible for scholarships from both original and switcher parts of the donation.
To view the video in Spanish, click here.
First, understand that scholarships come from donations. If there are no donations there are no scholarships. Therefore, the best way to maximize your scholarship awards is by increasing the donations where your family is recommended to receive those funds.
Over the years the maximum donation amounts have grown significantly. With these generous limits, it doesn’t take long to make a significant impact on your tuition expenses.
Additionally, many employers offer matching gift programs for donations made to non-profits. In most cases, we qualify for these matches. Encourage your donors to check with their employers to see if they offer such a program. For more details, visit the matching gifts section of our website.
Finally, be sure to take full advantage of the programs we offer:
Do you have brochures ready to hand out?
Is your donation page set up and shared on Facebook?
Are you participating in our thank-you note program?
By staying proactive and engaged, you can help maximize the financial support for your family’s tuition.
To view video in Spanish, click here.
State law does not allow us to share the names of any of the donors. We must abide by that law.
We are allowed to share the total dollars that have been donated and recommended to your family. The easiest way to do this is to send us an email at info@arizonatuitionconnection.com and ask us to provide you that information. Please be certain to provide us the name of your child in your email.
What are the most common questions I will be asked?
1. How much can an individual donate? For the tax year 2024, the maximum a married couple filing jointly can donate is $2,910, and $1,459 for a single person.
2. What are the donation deadlines? – Your donors have until April 15th, 2025 to donate and take it off 2024 taxes.
3. I don’t pay taxes, do I get a refund? – Participating in this program has nothing to do with if they are getting a refund or if they owe taxes when they file their return. It has to do with if they have a tax liability. Their tax liability is their total state tax bill for the year. This program lowers your tax liability.
4. Is this the same as the Public School Tax Credit of $400.00? No, they are totally separate programs. Actually, the state offers many different tax credits. Residents can participate in them all.
If you’re finding it tough to secure tax credit donations for your family, don’t lose hope. With the right approach, you can succeed.
Here are three key steps we recommend to parents facing challenges.
First, Educate Yourself
Understanding the tax credit donation process is essential. If you’re not familiar with it, join one of our coaching sessions. A solid grasp of the program will help you navigate it with confidence. You can find a list of upcoming events on our website’s homepage.
Next, Get Your Tools Ready
We provide custom brochures, donation pages, and social media templates to help you reach potential donors effectively. These resources have been instrumental in helping families boost donations.
Lastly, Start a Conversation
Engage potential donors with talking points you feel comfortable with. Most parents will focus either empowering people to direct how their taxes are spent instead of letting their money go to the state’s general fund where their tax may go to programs they disagree with. Or Some parents take a more personal approach, asking potential donors to support their family.
Many parents find it easiest to simply hand out brochures and encourage potential donors to give them to their tax professional. When potential donors share one of your custom brochures with the person who prepares their taxes it almost always leads to a donation.
One last thing, remember that most donations are made during tax season with the majority coming in February, March, and April. If you’re not receiving donations before those months, don’t get discouraged, – keep asking! This is a numbers game of asking more people to donate.