Arizona

Personal Tax Credits for School Tuition Organizations

Personal tax credits for school tuition organizations provide a credit on personal income taxes for donations to school tuition organizations (STOs), which are privately run nonprofit organizations that support private-school scholarships. Individual taxpayers contributing to STOs may claim a dollar-for-dollar credit of up to $535, and married couples filing jointly may claim up to $1,070. Any nonprofit that wants to operate as an STO may do so. Launched in 1997.  

Corporate Tax Credits for School Tuition Organizations (Low-Income Tax Credit)

Corporate tax credits for school tuition organizations provide a credit on corporate income taxes for donations to school tuition organizations (STOs), which are privately run nonprofit organizations that support private-school scholarships. This program is modeled after Arizona's existing personal tax credit for donations to STOs, and the two programs work in tandem. All organizations registered as STOs may participate in both programs. Corporate taxpayers contributing to STOs may claim a tax credit equal to the full amount of their contribution. This also allows insurance companies-which do not pay state income tax-to receive credits based on the insurance premium taxes they pay. Launched in 2006.  

"Lexie's Law" Corporate Tax Credits 

Arizona provides tax credit scholarships to special education students in public schools, allowing them to attend the public or private school of their choice. Included in these scholarships are considerations for foster care students, allowing them to attend the private school of their choice. After students are admitted to private schools, they apply to the state for a scholarship to help cover their costs. This program is a combination of Arziona's previous Displaced Pupils Choice Grants and Arizona Scholarships for Pupils with Disabilities Program.  The maximum dollar value of a special needs student's scholarship is equal to the lesser of the private school tuition or 90 percent of the state funding that would otherwise go to the pupil if he or she had remained in public school. This amount varies depending on factors like the severity of the student's disability.  Launched in 2009.  

Empowerment Scholarship Accounts

Arizona's Empowerment Scholarship Accounts (ESA) program allows parents to withdraw their children from public, district, or charter schools and receive a portion of their public funding deposited into an account with defined, but multiple, uses, including private school tuition, online education, private tutoring, or future educational expenses. Launched in 2011.  

"Switcher" Individual Income Tax Credit Scholarship Program

Arizona's "switcher" tax-credit scholarship program supplements its original individual tax-credit scholarship program. The switcher program provides a credit on individual income taxes for donations to School Tuition Organizations (STOs), nonprofits that provide private school scholarships. In tax year 2015, individual taxpayers contributing to STOs under this switcher may claim a dollar-for-dollar credit of up to $532, and married couples filing jointly may claim up to $1,064. However, taxpayers must first donate the maximum credit amount for the Original Individual Income Tax Credit ($535 individual, $1,070 joint) before the switcher credit can be claimed. Launched in 2012.