The State of Arizona has given taxpayers a choice in how their tax dollars are allocated. You can pay your taxes to the State and allow the legislature to decide how to spend the money.  Or, you can allocate (within limits, of course) to various groups that are doing good in your community.

For example, “Joe and Jane Doe” have a tax burden of $1,000 to the State of Arizona.  If they donate $400 to a qualified QCO and make another donation to a QFCO for $600, their $1,000 in contributions will offset their tax liability, dollar-for-dollar.  They will no longer need to pay the Arizona Department of Revenue any taxes due and will be refunded for any state taxes withheld. 

Joe and Jane have, in effect, decided how their tax dollars are spent. They have made the determination themselves as to what organizations are adding the most value to their community. 

Simply put - a tax CREDIT reduces an individual’s bill on a dollar-for-dollar basis. For every dollar you give to a qualified tax credit organization, your tax bill is reduced by a dollar.

A tax DEDUCTION reduces your taxable income. So, for every dollar claimed for a tax deduction, your taxable income is reduced by a dollar.  How much that affects your tax bill depends on your tax bracket.  For example, if your tax percentage is 2.5% (the flat rate for Arizona), every dollar claimed as a tax deduction will return you 2.5 cents. 

So – tax DEDUCTIONS are fine. But tax CREDITS are great!

Contributing to Foster360 through Mesa United Way is NOT a deduction but a credit. Your contribution can reduce your Arizona state tax liability dollar-for-dollar. 

For the 2025 tax year, the Arizona Department of Revenue has set the QCO (Qualified Charitable Organization) limit to:

$495 for an individual taxpayer

OR

$987 for joint-filing taxpayers.

No, there is not a minimum dollar requirement for the QCO tax credit. Any amount helps us complete our mission.

If you contribute to Foster360 through Mesa United Way and the amount you contribute is greater than your state tax burden, you can “carry forward” your credit for future tax years. (Up to five years).

For example, “Joe and Jane Doe” are excited about directing their money to their community instead of the State Legislature so they give $1,500 to Foster360. But after all the dust settles, their tax bill for that year is only $1,000. They will have no tax owed to the State of Arizona for this year and can take the extra $500 they contributed ($1,500 given minus $1,000 in tax liability) and apply it to the following year’s tax bill.

Important note: While the Arizona Department of Revenue will “refund” you any taxes that were withheld and that you are entitled to, if you make an overpayment of tax credits, they will not refund your overpayment. They view it as a non-refundable payment that can be carried forward to future tax liabilities.

Contrary to conventional wisdom, you do not have to make your contributions to the QCO tax credits before January 1.  The State of Arizona allows you to contribute up until midnight on April 15, 2026. 

(Sidenote: on the State of Arizona forms, it requires you to list separately whether you gave in 2025 or 2026. It is important to note that you get the same credit whether you give in 2025 or 2026.)

Check with your tax advisor about federal credits and deductions, however.  Their deadlines are usually December 31. 

We recommed that you talk to a professional tax advisor to talk about your unique tax situation.

If your question is more about the mechanics or logistics of making the contributions or website problems, you can contact us by email at: TaxCredits@AzuraCares.org or by phone at (480) 832-2108.

The Arizona Department of Revenue’s helpline is: (602) 255-3381 or (800) 352-4090